by WARREN, Mich. — Loves Furniture & Mattresses filed for Chapter 11 bankruptcy protection late Wednesday and is preparing to liquidate its remaining stores.
The move likely ends a short run by the chain born out of former Art Van and related-brand showrooms this past May after Art Van filed its own bankruptcy petition early last year. Loves faced financial, delivery and supply challenges, including a recent lawsuit by Southern Motion and subsidiary Fusion Furniture, claiming the retailer owed them more than $1.8 million.
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Some 10 industry-related suppliers and other vendors are listed among Loves’ 20 largest unsecured creditors. They’re owed nearly $10 million combined, led by Lane Furniture, listed as United Furniture Inds., with a $1.56 million claim, according to a court document. (See the others below.)
The initial petition, filed in U.S. Bankruptcy Court’s Eastern District of Michigan, lists estimated assets and debts both in the $10 million to $50 million range.
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Planned Furniture Promotions in a joint venture with Hilco Merchant Services will be handling the liquidation at Loves’ 24 remaining stores, including 12 where liquidations already were underway, PFP Senior Vice President Tom Liddell told Home News Now.
Loves opened its first seven Loves stores in greater Detroit in late summer, a few months after private equity firm U.S. Assets purchased 27 stores out of Art Van’s bankruptcy in May and as the nation remained in the midst of the Covid-19 pandemic. Former Loves CEO Matt Damiani saw it as just the beginning for the new retailer, suggesting at the time the business was established that more stores would follow and that Loves would generate between $200 million and $300 million in sales on an annualized basis just from the first 27 locations.
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Loves would grow quickly to 32 stores, but the rapid expansion was short-lived. In early December, Damiani was out, and U.S. Assets installed Mack Peters as its new CEO. Hobbled by product shortages and other problems, the startup began selling off and closing locations and looked to improve service and fill holes in its warehouse and showrooms by shrinking its footprint. Five of seven locations sold off were converted to Levin Furniture. Later in December, Loves said another dozen stores would close, leaving the company with 13 locations.
In a press release issued today, Loves said it was “attempting to build a retail brand from the ground up and in record time with stores located in Michigan, Ohio and Pennsylvania. However, the start-up, significant and unforeseen warehouse and delivery issues, unplanned expenses, supply chain issues, and delayed store openings led to cash flow issues.”
Peters, referred to in the release and on the petition as interim CEO, lauded the Loves team for its commitment and hard work, and said, “if passion and dedication were enough for a business to be successful, Loves would be highly profitable.
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“Unfortunately, the significant issues Loves faced in timely delivering products to its customers, unanticipated costs, and cash flow issues cannot be solved absent the intervention of the Bankruptcy Court.”
In addition to Lane, other industry-related unsecured creditors and their claims include: Southern Motion ($1.43 million); JB Hunt ($1.37 million); Flexsteel Inds. ($1.29 million); Steve Silver ($1.03 million); Samuel Lawrence Furniture ($766,044); Johnathan Louis ($768,017); Liberty Furniture ($608,532); Magnussen ($559,926); and Stearns & Foster ($528,195).
Loves said it is “working with critical stakeholders to protect customers who placed deposits.,” though the arrangements must be approved by the court and are subject to modification.
“Loves customers who have purchased floor sample merchandise for customer pick-ups should contact the store at which the goods were purchased to make arrangements for pick-up,” it said. “We are working on procedures with our PFP partner to fulfill all other customer orders and customers should expect to be contacted regarding their orders. Customers with questions may contact (888) 477-3141.
Check back for updates to this story.
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