Robb and Stucky : Chapter 11 Bankruptcy

[drcollie]

One of the big high-end dealers in the south, Robb and Stucky has filed Chapter 11. Another chain that over-expanded and took on too much debt based on sales projections that failed to materialize. Apparently they continued to take customer deposits right up to filing for Chapter 11 in February. That is totally unethical in my book, and there is no mention of their bankruptcy or financial floundering on their website or in their 'news' on their website. They have a huge debt load to suppliers, employees (back pay) and the IRS.

http://www.news-press.com/article/20...tcy-protection

"Robb & Stucky’s immediate goal is to maintain “business as usual” so it can pursue a sale of its enterprise as a going concern while soliciting bids for the conduct of a going-out-of-business sale if a buyer for the going concern can’t be found."

Advice to anyone shopping with ANY store that is either in bankruptcy or close to it - do not tender a deposit for any special order furniture. Chances are you will not get your order as the maker will not ship it to them, and you'll have to fight to get your deposit returned which can take from several weeks to several months.

[southlady]

Wow, So are you saying I would have no recourse if I special ordered my hancock and moore thru them? Wouldn't the company try to help me out? I didn't live that far from a Robb and Stucky's. Do you not think that the down turn in the housing market may have been what hurt them. Well I have to feel sorry for any business that trys and just can't make it in this economy. What will this mean for the high-end retail market?

[AZJoe]

Wow, So are you saying I would have no recourse if I special ordered my hancock and moore thru them? Wouldn't the company try to help me out? I didn't live that far from a Robb and Stucky's. Do you not think that the down turn in the housing market may have been what hurt them. Well I have to feel sorry for any business that trys and just can't make it in this economy. What will this mean for the high-end retail market?

I went to Baker in Scottsdale the other day, to check out what they had, as I wanted to physically sit in one, before I ordered from Duane. The lady at Baker mentioned to me R&S could no longer custom order H&M pieces due to the bankruptcy.

Not sure how true it is, but it would seem logical.

I stopped by R&S afterwards to see what they had on the floor. They had a nice sundance sectional

[jriley]

Whew, that was a close one for me! Was at R&S in Scottsdale in early Feb and got a quote on the Roy Lounger I was planning to buy. As it happened, it was the last day of their !0%- off January sale. I asked the very nice saleslady how long the order would take, and she said "twelve weeks," which we know is an absurdly long time. I told her we would be back in Michigan long before then, and she suggested I put a deposit on it that very day (to take advantage of the sale price), and have them deliver it when we returned to AZ in Oct.

Of course I didn't do that. Later she emailed me with a lower price yet (not nearly as low as Duane's, especially when you figure in the over 9% sales tax charged in the Phoenix area), but I told her we had decided to wait until the fall before ordering. I did order from Duane and the chair was delivered yesterday. I had been feeling a bit guilty about not buying locally, but now I realize how lucky I was.

BTW, the Roy Lounger is EXTREMELY comfortable and very stylish. We had it done in Kipling Java, and the color is perfect. The leather is rich looking, and soft and supple. We are both very happy with it.

I have houseguests right now, but I'll try to post some pix onto the Hancock&Moore area of the Photo Gallery in a few days.

[jriley]

From the St Petersberg (FL) Tmes:

Liquidation sales begin Friday at Robb & Stucky stores
By Mark Albright, Times Staff Writer
In Print: Friday, March 11, 2011

Liquidation sales begin Friday at all 20 Robb & Stucky home furnishings stores in four states as prelude to the shutdown of the 96-year-old Fort Myers chain.

Shoppers may not notice much difference at the once-elegant Robb & Stucky store in International Plaza in Tampa where a storewide clearance has been running to raise cash since the holidays. Much of the inventory left looked well picked over on Wednesday with some of it already marked at 65 percent off. All sales are final.

U.S. Bankruptcy Court Judge Caryl Delano approved the sale of the chain's assets to liquidators Hudson Capital Partners and Hyperams LLC, who bid $30 million to stage going out of business sales expected to partially pay secured creditors owed more than $43 million.

Left in the lurch among $63 million owed to unsecured creditors is about $13 million to customers with gift cards, gift certificate, loyalty reward points and furniture ordered, but not delivered. Attorneys saw no need to curry customer favor if the company was going out of business. Officials suggested that customers can dispute charges with their credit card.

Founded in 1915, Robb & Stucky grew into the nation's 34th largest furniture retailer after Clive Lubner took over in 1979. He expanded beyond Southwest Florida, putting high end stores that followed migration to the Sunbelt. That included huge stores in the epicenters of the 2007 housing collapse in Florida, Arizona and Las Vegas. Since 2008, Robb & Stucky annual sales dropped in half to $140 million in 2010. Lubner's son, Dan, has been trying to raise money to revive a shrunken version of the company, which employs 760 people, but missed the bankruptcy auction deadline.

[drcollie]

Wow, So are you saying I would have no recourse if I special ordered my hancock and moore thru them? Wouldn't the company try to help me out? I didn't live that far from a Robb and Stucky's. Do you not think that the down turn in the housing market may have been what hurt them. Well I have to feel sorry for any business that trys and just can't make it in this economy. What will this mean for the high-end retail market?

If you choose to order from a company that is in bankruptcy, you stand in a long line as a creditor and run the risk of either losing your deposit entirely, or waiting a long time until the courts settle the distribution of the assets to the various classes of creditors/ You chargeback protections from credit card companies won't work if the store doesn't have any money in the bank for the bankcard issuer to pull from.

This is borderline fraud as far as I am concerned when stores that are going out of business continue to take orders and deposits. They get around the criminal aspect of it because they DO submit your to the manufacturer of the product, but once it arrives on the fax machine, the maker puts it over in the 'no ship' stack because the store hasn't been paying its bills. The manufacturer will not longer write a production ticket for YOUR order from that dealer because they haven't been getting paid. So while the maker has the order, its in a 'dead letter' file until the store gets its bills in arrears paid. That doesn't usually happen so you are strung along month after month wondering if you will ever get your order, and not knowing quite what is going on. If you call the maker directly, they will not tell you if a store is on a 'no ship' status, legally they cannot do that. They also cannot tell you if a store is financially healthy or not if you ask. As a consumer, you are left in the dark and that's unfortunate.

The manufacturer will try to help you as the consumer once the store has officially announced bankruptcy, but remember you are not their customer and they do not have your deposit money. The store is their customer, and you are the store's customer. The store has your money, not the manufacturer. In most cases the maker will direct you to contact a viable dealer who they think is reputable, and supply that new dealer with the exact order specs made, but that's about the extent of it.

Stores are still failing left and right. Robb & Stucky, Boyles, and Thomas (in NC) just went under as well. They all typically want to build newer and fancier stores based on the business they THINK they will get with the new store. Then they borrow money to finance it. When the sales don't come as expected, they fall behind on their debt, supplier payments, taxes, emplyee paychecks until they can not longer pay the debt, then must go bankrupt.

I have a very little store. Only 5,000 s.f. on two floors. I have never taken a loan out for my business and if I can't afford to pay cash then it doesn't happen. My delivery truck is 11 years old now and looks tired, I have no full time employees or warehouse facility, and my retail store front is not in the 'trendy' part of town. Yet running lean and without speculation and having no debt means I can survive when other stores cannot. When times get tight, I can hunker down and last out the dry spells. Like my Hancock and Moore rep is fond of saying: "I'm the biggest small dealer in the country" for their company. I work 6 days a week, every week, and often at night from home. Three nights this week I was at the store until 10 p.m. doing the things that need to be done (I close at 5:30 p.m.) and I'm often there two hours before opening in the morning as well (I will not answer the phone before 9:30 a.m., however). Its not market conditions that determine success or failure, its how you run your business. Be smart, do the work yourself, stay out of debt, don't sell junk, price fairly and try to service your customers better than the other guy. A simple formula others would do well to follow in this industry.

[drcollie]

I did order from Duane and the chair was delivered yesterday.

Excellent! And ahead of schedule....how was the delivery process? Was the trucker agreeable and helpful? Did he help move it from the curb up to your house? I have to ask because i don't use LTL Common Carrier service very often on upholstery furniture, but they did appear to get it to you pretty quickly. Glad you like it and thank you for the opportunity to serve you.

[hglaber]

Our local high-end dealer, in business for over 110 years, did exactly that in absolutely spectacular fashion. They acquired a midrange competitor, bought a huge, empty department store building, borrowed 8 million dollars to converted it into 150,000 sq. ft. of showroom, and hired over 100 employees to staff it. They claimed it was to be a "Regional Furniture Destination!" that would "...draw customers from hundreds of miles away!" It would have to in order to survive, since this is a metro area of well under a million people already pretty well served by other furniture stores.

Of course it didn't draw customers from miles around. It drew loan workout specialists. But there was nothing left to work out besides what liquidator to hire.

[drcollie]

If anyone is reading this who is a Robb and Stucky customer and has given them a deposit, here's a tip:

Call the manufacturer of the product you ordered and ask them for help with your order. Realize that Robb and Stucky has your money - not the manufacturer. But there are manufacturers out there that are sympathetic to your situation (not all are, but some are) and will help you out in some manner. I can't speak for any one company, but the better makers may be willing to allow you to complete your purchase directly through them (basically at dealer wholesale) if you've tendered a deposit through a bankrupt store AND have a production ticket with that maker through the bankrupt store.

It will only cost you a phone call to find out.

[jriley]

Our delivery went very smoothly, Duane. The trucker was a very nice guy who lives in a town nearby (Nogales), and behaved in a completely professional mannner. He helped us with the initial uncrating (he said he was required to do that, and he was also concerned because the crate had some dings in it), and also helped us to move it inside. My husband practically had to force him to accept a gratuity. We checked the lounger out carefully after he left and it was in perfect condition. All-in-all, a good delivery experience.

I am delighted to say that it has been a great pleasure doing business with you, Duane. I would be very happy to buy from you in the future should the need arise.

On further comment on Robb&Stucky -- their show room in Scottsdale was incredible. I've been in many furniture stores, but nothing to compare with it's palatial magnificence. And it's not just that one store. If you drive along Scottsdale Drive, it's lined for block after block with similar enormous, high-end furniture temples. How could there possibly ever been enough affluent customers in the Phoenix area, even at the peak of the housing boom, to support them all? It's as if everyone who had anything to do with the housing industry back then went collectively insane.