Robb and Stucky : Chapter 11 Bankruptcy

[drcollie]

Glad to hear that, JR...sounds like the trucker went above and beyond the call. And thank YOU for your business and the recommendation. I know its not easy to trust someone long distance with your hard-earned money.

You know, I walk into these furniture palaces like Robb and Stucky and look around, then my wife has to listen to me complain about how little and dated-looking my store is for the next several days. I still have 4' florescent light tube fixtures in the ceiling! One day last year after visiting a beautiful dealership that carries H&M I called up Jack Glasheen in my frustration (owner of Hancock and Moore and many other companies) for he is the smartest man in the business.

I said to him "Jack, how do they do it? What am I doing wrong because I don't make enough money to have a store that presents like these. What do these guys know that I don't?"

Jack said without hesitation "Duane, you're the guy that's doing everything right. You haven't put yourself into debt, pay your bills and haven't over-extended, and your customers like you. Keep doing what you're doing, because you're on the right track."

Then when these mega stores tumble, left and right, I realize the wisdom in Jack's advice. But I still need to replace my old delivery truck, so keep those orders coming in, folks!

[BURTON JAMES]

We are a manufacturer who will help former robb and stucky customers get their furniture, provided of course they ordered furniture that we manufactured. This can be determined by looking on the robb and stucky invoice/receipt for the vendor number 2819. This is the vendor # r&s used for burton james, we are in california and manufactured custom upholstered furniture for r&s. Our phone number is 626-961-7221. Ask for kathryn or ralph

[Dianne47]

Husband and I visited the R & S store in Scottsdale yesterday. It was truly crowded and for once people could shop in peace without a salesperson following their every move. I didn't notice any particularly great "deals" but there were many "SOLD" tickets tucked in the hangtags. Something that has always totally annoyed me at R & S is the item manufacturer is coded on the tags, so shoppers cannot tell the company that made each item. That hasn't changed.

I was looking for an H & M September sofa or chair to "try" and I couldn't find one. The Sundance sectional was being monopolized by a couple who were sitting on both ends yakking. The salesperson I spoke with just gave a wave of her hand when I enquired about H & M. "They're all over the place." This truly ticked me off, so I gave up. No wonder this chain is going under...

There was an older gentleman at the greeting desk, very elegant appearance and grooming. My husband asked him how long he had worked at the store and the man replied, "Twenty-two years." It's the older employees who are really going to suffer with the closing of the stores.

[drcollie]

Look at how deep in debt they were. (From the industry trade publication "Furniture Today"):

".... Fourteen of the retailer's 20 largest unsecured creditors are home furnishings companies owed about $8 million. The largest is Woodard, a casual and outdoor furniture vendor that is owed $1.13 million. High-end case goods and upholstery resource Marge Carson is owed $1.05 million. Other industry suppliers among the largest unsecured creditors are E.J. Victor, owed $719,391; Lexington Home Brands, $656,667; Schnadig; $590,367; Hancock & Moore, $548,388; John Richard Collection, $538,013; Stanley, $477,401; Henredon, $426,994; E.S. Kluft, $407,229; Brown Jordan, $383,890; Leather Trend, $350,713; Vanguard Furniture, $350,028; and Century, $330,719. All told, Robb & Stucky's unsecured creditor claims total about $63 million, according to one court document."

[organic_smallhome]

OMG. How in the world will they pay off this type of debt? Does it just get written off??? Wow.

[Matthew]

OMG. How in the world will they pay off this type of debt? Does it just get written off??? Wow.

The unsecured creditors probably won't be paid, at least not in full. They may get some money eventually, but in the vast majority of cases it ends up being less then they are owed.

[drcollie]

That's why they are bankrupt. Robb and Stucky's largest creditor is Bank of America. Millions owed to them. The courts will carve up the chain and sell off the assets, then divide up what's left.

Scary.

My store has zero debt. Always has.

[lmunker]

Went to a Robb and Stucky yesterday. I went to check if they had any Hancock and Moore but they didn't. It looks like they were selling a bunch of low grade Leather Italia (I think that was the name) brand sofas. I didn't even see that brand when I was there a few months ago.

I saw there was a 10 percent off coupon on their website. I would check their site for a coupon if you are considering a purchase.

[simplyjeff]

Welcome to the wonderful world of furniture liquidation sales. When a furniture retailer goes out of business usually they "liquidate" their inventory in order to get a quick cash infusion.

What this means is that they will sell all of their remaining inventory at a flat percentage of the cost they paid for it to a "furniture liquidator." These are companies whose business is to make money from retailers who are going out of business.

There is a lot of competition in the liquidation business so when one buys a company's inventory they will often pay a surprisingly high percentage of the wholesale cost of the products. They will then place as high a comparative price as they can justify on the furniture and sell it to unsuspecting consumers who believe that the 50% off tag actually means that it is 50% off the store's previous price. But that is not where the liquidators make their biggest profits.

Once a liquidator has purchased the assets of a company that gives them the right to hold a "Going out of Business" sale. The length of time available for going out of business varies from state to state but is typically at least 6 months. During this period the liquidator not only has the right to sell off the retailer's remaining merchandise but to also bring in new furniture.

This new furniture is where the profits are made. In the case of a store like Robb & Stuckey shoppers assume that all furniture sold there must be excellent quality. Liquidators are under no obligation to maintain that high quality level and will bring in much cheaper goods with inflated suggested retail prices that they will then discount from. These liquidators are expert at knowing how to arrange a store to encourage quick sales. They know exactly how to advertise to get the best possible response. They bring in expert highly paid sales people who travel with the liquidation company from one store closing to another. These salespeople are trained to close a sale quickly and move on to the next one.

There is nothing haphazard about how a liquidation company operates. Every step is carefully choreographed to bring maximum profits to the liquidation company. When the going out of business sale ends, the company just packs up any remaining furniture and sends it off to the next location. Many of these furniture liquidation companies have been in business for decades.

Jeff Frank
Simplicity Sofas

[Monique]

Jeff, thank you for this post. It explains a lot! I recently dropped by a liquidation sale at a jewelry store that I had shopped in the past. I was shocked to see the poorly designed jewelry in the cases. It was nothing the store would have ever carried.

Good to know how this works.

Thanks!

M