GRAND RAPIDS, Mich. (WOOD) — About six months after opening its first store, Art Van successor Loves Furniture is filing for Chapter 11 bankruptcy restructuring and liquidating 25 stores in hopes of surviving.
In court documents filed Sunday, Loves interim CEO Mack Peters said Penske Logistics Services, the company’s warehouse manager, pulled its people and trucks from Loves’ warehouse in late January after the furniture retailer ran out of cash to pay Penske.
Loves says Penske also refused to let Loves use its warehouse management system to find inventory in the 1-million-square-foot warehouse to fulfill customer orders.
Penske took a step further on Jan. 6 by filing for a temporary restraining order against Loves to prevent the furniture retailer from moving or delivering items in its warehouse, according to the bankruptcy court filing.
Loves says it canceled all customer orders that weren’t already pulled from the warehouse that the company leased directly.
The company said it started with good customer reviews when it opened its first seven stores in August 2020, but the situation quickly soured when inventory couldn’t be found in warehouses or was delivered to the wrong store, leading some frustrated customers to cancel their orders. The bad reviews spilled over onto social media, which Loves says drove down business while the company racked up more than $8 million in costs for warehouse delivery and shipping.
Loves Furniture has since leased its five Pennsylvania stores to another furniture retailer and struck a deal with Preferred Furniture Promotions — the same company that helped close Art Van — to liquidate its 25 remaining stores in hopes of freeing up money to reopen some locations.
“While it may seem contradictory that the Debtor seeks to conduct liquidation sales events to reorganize a core of its business operations, it is not. In fact, the only route to a reopening of any store locations is the accumulation of sufficient proceeds from the sales to fund a reopening. Without a means of converting inventory to cash, the Debtor has no reasonable likelihood of maintain operations or reorganizing,” the company states in the court filing.
Loves’ locations on Alpine Avenue NW in Comstock Park and on 28th Street in Kentwood are both up for lease. The company also has stores in Portage and Battle Creek, and had a Muskegon store that PFP began liquidating last month.
Loves still owes about $22.5 million for its current inventory and $6.5 million to creditors, according to the court filing.
News 8 reached out to Loves Furniture for further response, but has not yet heard back from a company representative familiar with the matter.
- Hostage situation in Norway ends in arrest
- 10 things more likely than winning the huge Powerball, Mega Millions jackpots
- Ex-boyfriend of deported Russian agent pardoned by Trump
- Calumet man arrested by FBI in connection with U.S. Capitol riots
- Trump follows tradition, leaves Oval Office note for Biden