GE appears to be pulling FBI's inventory financing
Clint Engel -- Furniture Today, September 2, 2013
HIGH POINT - GE Capital Solutions appears be pulling the dealer inventory financing plug for Broyhill, Lane and other Furniture Brands International lines, according to a letter that went out to certain dealers last week.
Furniture Brands, however, said it believes the letter is an error and is attempting to fix the problem.
Some dealer members of AVB BrandSource have received a letter from a portfolio manager for GE's Capital Solutions for the Home Product Industry this month stating that effective Sept. 12, the GE unit "will no longer finance the purchase of Furniture Brands International inventory," including, but not limited to, "programs supporting Broyhill and Lane products."
The Sept. 3 letter obtained by Furniture/Today stated that CSHPI will honor financing approvals made before the effective date and invoices within 60 days of the approval.
The letter did not give the reasons for cutting off the financing link to supplier Furniture Brands, which faces mounting losses, shareholder lawsuits, and speculation that a bankruptcy filing is imminent.
GE Capital referred questions to spokesman Ned Reynolds, who had not responded by press time.
Mike Allen, vice president of BrandSource Home Furnishings, told Furniture/Today that more than 80% of its members have a GE credit line and that by late last week the buying group had heard from roughly 10 to 15 retailers about the letter.
BrandSource is advising its members to further discuss it with their Broyhill, Lane and other Furniture Brands reps, he said. Both Lane and Broyhill are BrandSource vendor partners, with Broyhill being the larger source for the buying group.
"It's concerning," Allen said. "These are still some very valuable brands, but first and foremost, our dealers need to protect themselves and their customers."
The extent of the letter distribution and whether other retailers outside the Brand-Source buying group have received it are unclear. However, Furniture Marketing Group Executive Director Mike Herschel confirmed that his buying group also was notified by Capital Solutions that it was dropping inventory financing programs with Furniture Brands after Sept. 12.
Lisa Hanly, a Furniture Brands spokesperson, said in response to the letter, "We think this is an error and we're in discussions right now with GE attempting to correct anything that may have caused this."