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The housing and retail downturn caught up Wednesday with the N.C. parent company of Boyles Distinctive Furniture as it filed for Chapter 11 bankruptcy protection.
Conover-based Hendricks Furniture Group and sister company Classic Moving and Storage plan to shed debts and continue operating the five Boyles stores in the Carolinas, including locations in Pineville and Hickory. Another Boyles near Northlake Mall closed in March.
Losses related to failed stores in Florida prompted Wednesday's filing, spokesman Matt Ferebee said. However, he said, the company had been working for more than a year to adapt to economic difficulty and has financing agreements in place with BB&T Corp. and major manufacturers to continue in business.
The housing downturn sent furniture sales sliding well before the recession took hold, but broader economic woes have exacerbated the situation: Compared with 2008, total consumption of furniture and bedding was down 11 percent and furniture store sales down 14.2 percent in April, the most recent month available, according to data from furniture consultants Mann, Armistead & Epperson. A range of furniture stores have closed or filed for bankruptcy as a result.
Hendricks had long owned Norris Furniture, which had four locations in Florida, and operated stores under agreements with Thomasville and Drexel Heritage there, too. But the company rapidly increased its presence in the state starting in about 2006, opening a dozen Thomasville and Drexel Heritage stores.
It was about then that the Florida housing market began to plummet. By 2008 the economy brought mounting challenges; not only were people buying less furniture, but the stores were located in shopping centers that were losing traffic and tenants due to the economy, including names such as Circuit City, Ferebee said.
“The places we were became ghost towns before we even left them,” he noted.
Hendricks shuttered all the Drexel and Thomasville stores by late last year and closed the Norris stores early this year, exiting the Florida market. But it failed to reach agreements with landlords over debts related to the store closures. In addition, a cash crunch caused delays in getting products from manufacturers and delivering them to customers.
“We had to file to do what was right for the creditors, employees and customers associated with our operations,” founder Larry Hendricks said in a news release.
The bankruptcy agreements will enable the stores to resume normal business and deliveries, Ferebee said. The company, meanwhile, is focusing on its longstanding Carolinas operations to buoy its restructuring effort and hopes to reorganize quickly, with the goal of rebuilding customer confidence. The plan is not contingent on a dramatic market recovery, he said.
“Our stores in the Carolinas aren't in horrible shape,” Ferebee said. “If we can simply shed the debt in Florida…that's what puts us on course with the recovery plan.”
Hendricks and Classic Moving employ 245 people.
