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Thread: Thomas Home Furnishings...NC.... GONE

  1. #1
    Join Date
    Jul 2008
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    Alexandria VA
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    11,329

    Default Thomas Home Furnishings...NC.... GONE

    Another one bites the dust.

    Thomas Home Furnishings, a North Carolina Discounter, closed up and simply walked away. No bankruptcy notices, no calls to suppliers, no letters to customers with furniture on order just.... CLOSED. How rude.

    At least if you're going to go under, have some common decency and tell your customers and suppliers. There is no honor in slinking away, lights darkened, and everyone wondering what happened. Another one to give the industry a bad mark.
    Duane Collie
    Straight answers from thirty years in the business.
    My Private Messages are Disabled - Please ask questions here in the forum
    I ask that you do NOT call my store with general furniture questions, that is what the forum is for

  2. #2
    janetmd Guest

    Default Re: Thomas Home Furnishings...NC.... GONE

    I'm from Pennsylvania. This was my first experience in dealing with a NC furniture dealer...and it was Thomas Home Furnishings. They must have known something because they kept pushing back our delivery time. We didn't question it because there was always a good excuse and our sales rep, Heather, was so very kind and helpful. I feel taken and duped! What a rotten thing to do to people! We paid by credit card and have received a credit for our deposit. But what about the people who sent checks??? Apparently this company took our money and didn't prepay the manufacturers, so our furniture was never ordered. What a fraud!!!

  3. #3
    Join Date
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    Default Re: Thomas Home Furnishings...NC.... GONE

    Here's what typically happens, though I can't say this is exactly what happened with Thomas...

    Most stores operate on NET 30 terms with their suppliers, and have a credit limit based on their payment history and order volume with the supplier. In many cases, a factoring company owns the supplier receivables and will limit the amount the store can put on credit with a supplier. When a store starts to fail financially, they no longer have the money to pay their bills and that means either the rent/employees/tax authority/supplier does not get paid. They choose which. Most often the supplier gets the shaft right off the bat, and the IRS and State Tax Authorities (Sales Tax, etc). Takes a long time for government agencies to collect! So what they do is short pay a supplier in most cases. Say their bill for an order is $ 2,000, they might pay $ 700 and still owe $ 1,300 on the order. That shows the supplier they are trying to do a good faith payment and they will continue to ship product up to the point where the supplier has too much at risk or the factoring company puts a credit hold on their account.

    The store will continue to take orders and customer deposits, and continue to fax them in. But, because of the credit hold, the supplier puts the new orders on HOLD and won't produce the goods until some of the debt is cleared up. Should the financially troubled store continue to take deposit earnest money from consumers on special orders? No - they shouldn't because its unethical. But your deposit money and sales off the floor are all the cash they have to work with since their credit is dried up everywhere. So they do, and its not illegal because they are submitting the orders, its the suppliers who won't ship to the store because their account is in arrears. If they never submitted the order it would be out and out criminal fraud, but they do turn the orders in.

    Ever notice that I never take more than a 20 % deposit on an order when most stores ask for 50%? Most customers expect to pay half down as well. But I don't do it because it means I'll be upside-down when it comes to pay the supplier invoice. It gives a store owner an inflated value of his cash flow, and there is not 50% profit in this business. By taking a smaller deposit, it never puts me owing more than the customer's balance due on the order. For a hypothetical example:

    On an order of say $ 10,000 retail the store takes a $ 5,000 deposit from the customer. Profit on the order may be $ 2,200 in this example, leaving the store to pay the supplier $ 7,800. They do not pay a deposit on the order to the supplier, and are on Net 30 terms. The store takes the $ 5K and puts it in their bank, then spends it on rent, salaries, taxes, other invoices, etc. 60 days later the furniture arrives and they collect $ 5,000 from the customer upon delivery, but now owe the supplier $ 7,800. Now they're scrambling to find an extra $ 2,800 they don't have, so they have to short pay the invoice. One order doesn't seem too bad, right? But multiply that by (200) orders in house and the store is behind by $ 560,000. Doesn't take long to get in big trouble that way.

    Now if they took a 20 % deposit on that same order, they get $ 2,000 up front. When they deliver the furniture to the customer they get the remaining $ 8,000 and can easily pay the supplier bill of $ 7,800 and have $ 200 left over. Now they are never behind. But do most stores do that? No, they don't. Somewhere they read to get 50% up front in case the customer bails on the order. But guess what.... customers don't leave $ 2K behind, any more than they would $ 5K, so the large deposit really is a poor idea in my book, but that's what they all do.

    When a store goes under it bleeds out slowly, over a period of a year or more. Its a sinking ship with a slow leak that can't get plugged. They get behind a little, then a little more, then more, than a lot more.....until its hopeless. Then they go bankrupt and sell whats left of the store to a Liquidator. The Liquidator comes in and buys the inventory for pennies on the dollar, then has the big GOING OUT OF BUSINESS SALE, which is as much a fraud as everything else. Why? Because they are not operating as Thomas Furniture any more, the store employees are gone, and the Liquidator is buying lots and lots of new inventory on their own credit to refill the store five or six times with new product while trading on "Last Days! Thomas Furniture is Going Out of Business! Prices slashed 80 to 90% !" Customer roll in to buy - duped by the ads - and the Liquidator is milking it for all its worth and bringing in truckloads of whatever they can find from any supplier as overgoods to sell as 'remaining inventory'. In most cases the product they bring in was never even carried by the store that went bankrupt and is of poor quality. But the consumers are in such a hurry for a 'deal' that they don't check the quality and just buy. Then when the Liquidator's furniture falls apart in 18 months, the customer has no one to turn to - they're all gone. That's the dirty little secret of 'going out of business' sales in this industry.

    Unfortunately, you as the consumer have no way of telling which store is healthy and which are not. The suppliers cannot tell you - by law - unless there is an official bankruptcy filing. By then its too late. Probably the only sign is the failure to deliver the product in a reasonable time frame. If your original quote was for a 6 to 8 week delivery time and it stretches out to 6 months while you keep being put of by the store - that's not a good sign. If there is a legitimate order delay, then you should be allowed to cancel your order at any time up until production has started. If the store balks at letting you cancel and the delivery date has slipped by quite a bit, that should set off the warning bells.
    Last edited by drcollie; 03-15-2011 at 12:30 AM.
    Duane Collie
    Straight answers from thirty years in the business.
    My Private Messages are Disabled - Please ask questions here in the forum
    I ask that you do NOT call my store with general furniture questions, that is what the forum is for

  4. #4
    Join Date
    May 2017
    Location
    Huntsville, AL
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    46

    Default Re: Thomas Home Furnishings...NC.... GONE

    I was just glancing over all the posts and found this one. I witnessed this first hand. We had a local family owned store that sold the building to a developer and was liquidating inventory. The owner was getting older and had no children and made a fortune on the building. They brought in this company to sell off what was left and that company brought in a bunch of junk to sell along with the store's inventory. The owners were still there helping and I just said, I can't believe the junk that is in here. I guess its easier to pay a outside company to handle it. And they wanted top dollar for everything.

  5. #5
    Join Date
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    Alexandria VA
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    Default Re: Thomas Home Furnishings...NC.... GONE

    The whole "Store Closing, Everything is Liquidated" is the biggest retail scam of all time, but it's legal. Greed on both sides, from the consumer to the selling organization, creates an artificial buying frenzy that is unjustified. There are no injured parties though, it's done by consent and a desire to get a better deal, but should you ever decide to go to one of these, best have your spidey-senses tingling and know what you are buying and the value in it.
    Last edited by drcollie; 05-28-2017 at 02:34 PM.
    Duane Collie
    Straight answers from thirty years in the business.
    My Private Messages are Disabled - Please ask questions here in the forum
    I ask that you do NOT call my store with general furniture questions, that is what the forum is for

  6. #6
    Join Date
    May 2017
    Location
    Huntsville, AL
    Posts
    46

    Default Re: Thomas Home Furnishings...NC.... GONE

    And then we've had a few stores that have been "going out of business" for several years. None that I would ever buy from.

  7. #7
    Join Date
    Oct 2008
    Location
    NW Pennsylvania
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    339

    Default Re: Thomas Home Furnishings...NC.... GONE

    I believe years ago when shopping for bedroom furniture I talked to Thomas furniture. They were polite but I had concerns with payment/delivery and service after the sale if needed that I never received an adequate answer from them on those issue. Thankfully I found a dealer in Cleveland who had the same brand and pieces I wanted, they were more than happy to take care of all my concerns and their price was right in line with Thomas so I never did any business with Thomas. I feel for the customers affected by their closing the doors abruptly.

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