by NEW YORK — The high-end ABC Carpet & Home is weighing a bankruptcy filing and/or a sale as it struggles to pay its bills in the wake of declining business and a real estate dispute, according to reports by the New York Post and Bloomberg.
The Top 100 furniture retailer was particularly hard hit by the pandemic, the reports noted, as New Yorkers and tourists fled the city and because the retailer was late to the game with a fully developed e-commerce strategy. Like many furniture retailers, supply chain disruption and product delays likely only added to its troubles.
Citing unidentified sources, Bloomberg reported that a deal to sell to a private equity firm fell through in April of last year after having reached “advanced stages.” It said an investor group experienced in the home category “may take over the company through a bankruptcy filing or an out-of-court restructuring.”
Both reports noted how ABC hired advisers B. Riley Financial and Greenberg Traurig to explore options, including finding a new buyer or financing after the private equity deal fell through.
“If ABC can’t secure more funds and renegotiate its debts with vendors and landlords, it may be forced to file for Chapter 11 — and possibly liquidate its business,” the Post reported, again citing an unidentified source.
A spokesperson for the retailer told Bloomberg, We are actively engaged in advanced process with strategic investors that will allow us to continue our legacy of providing our customers with a unique home furnishings shopping experience,”
The retailer did not respond to Home News Now’s request for comment.
Among the problems adding to its struggles is a real estate dispute that arose following the ABC’s moves to shrink its footprint. A few years ago, the retailer sold four of the six floors at its flagship 888 E. 19th Street location to a real estate firm for $133 million, according to the Post report. At the same time, Paullette Cole, ABC principal and great-granddaughter of the founder, also established an LLC that serves as “sublandlord” to part of the store, the Post reported. Then in July, the LLC filed for bankruptcy protection, and is now locked in a dispute with the building owner, which could impact ABC’s lease as the LLC has been unable to pay what it owes to the landlord, according to the report.
