Loves Furniture files for bankruptcy, liquidates stores after warehouse shutout

CORRECTION: An earlier version of this story incorrectly stated that Penske removed employees and vehicles from the warehouse in late January rather than December. We apologize for this bug, which has since been fixed.

GRAND RAPIDS, me. (WOOD) – About six months after opening his first store, Art Van’s successor Loves furniture requests Chapter 11 restructuring and the liquidation of 25 branches in hopes of survival.

in the Court documents Loves interim CEO Mack Peters said Sunday that Penske Logistics Services, the company’s warehouse manager, pulled its employees and trucks out of Loves’ warehouse in late December after the furniture retailer ran out of money to pay Penske.

According to Loves, Penske also refused to let Loves use its warehouse management system to find inventory in the 1,000,000-square-foot warehouse to fulfill customer orders.

Penske went a step further on Jan. 6, filing for an injunction against Loves to prevent the furniture retailer from moving or delivering items in its warehouse, according to the bankruptcy court.

According to Loves, any customer orders that have not yet been pulled from the warehouse that the company rented directly have been canceled.

The company said it started with good customer ratings when it opened its first seven stores in August 2020. However, the situation quickly worsened when no inventory was found in warehouses or shipped to the wrong store, causing some frustrated customers to cancel their orders. The bad reviews spilled over to social media, which Loves said weighed on business as the company raised more than $ 8 million in warehouse delivery and shipping costs.

Loves Furniture has since rented its five Pennsylvania stores to another furniture retailer and signed a deal with Preferred Furniture Promotions – the same company that helped close Art Van – Liquidate the 25 remaining stores in the hope of freeing up money to reopen some locations.

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“While it may seem contradictory for the debtor to want to conduct liquidation sales in order to reorganize a core of its business, it is not. In fact, the only way to reopen stores is to accumulate enough sales to fund a reopening. Without a means of converting inventory into cash, the debtor has no reasonable chance of maintaining operations or reorganizing, ”the company’s judicial filing stated.

Loves’ locations on Alpine Avenue NW in Comstock Park and 28th Street in Kentwood are available to rent. The company also has stores in Portage and Battle Creek, and had a Muskegon business that PFP began liquidating last month.

Loves still owes about $ 22.5 million for its current inventory and $ 6.5 million for creditors, according to the court.

News 8 reached out to Loves Furniture for further responses but has not yet received a response from a company representative familiar with the matter.

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