Art Van is out of money and is liquidating and closing all stores

[blizzard]

https://youtu.be/KSbfhMGuUds

[WOHO]

Hey Cumulus, check out how well it works when you sell your real estate and hope to rent it back- it buys you one year in business and they you're screwed.

[audiophile]

Yep.

[696lover]

It is unclear to me if THLP is the landlord of the Art Van real estate. It also unclear to me if the real estate is free of bank liens. Perhaps 696lover has some inside info on this matter.

If Lee believes the real estate is worth considerably more than $550 million, then your theory may have merit, 696lover. However, that theory seems inconsistent with how THLP generally conducts its investment affairs.

I think this is a case of talent drain, mismanagement, and poor strategy, not an innate desire from day one to rip the company to shreds and sell pieces of the carcass. We can certainly blame THLP for the mismanagement and poor strategic execution; they hired the executives that succeeded Yost. The market expansion did come at a bad time. The ship was seemingly rudderless around that time.

Good article from Furniture Today:
https://www.furnituretoday.com/furnitur ... t-art-van/

(I don't buy the line of thinking that everything was hunky dory in 2017, though.)

By the way, I appreciate the nice words, Lester. Thank you!

I am home--not my office--but my wife is taking forever to get ready for brunch so I will answer. This is from memory.

In 2017 Art's personal trust owned most of the real property. As part of the deal he executed a lease with an in-between entity (I am writing this like it is a single store so it makes more sense) and then transferred the real estate ownership to another entity, subject to a mortgage with Citi (I think) to fund the purchase. Side note: There are also rights to payments from the finance companies/UCC liens on the inventory, fixtures... but the real value is the real property, and maybe the name

At the time there was a subordination agreement with Citi. Lee just recently paid down enough recently that Citi does not have a clear right to grab the real estate, because the owning and intermediate entities with interest in it can make as good or better of a claim and obviously, legal fiction notwithstanding, are together.

That was when the chain's fate was sealed.

No one other than the workers and suppliers are out much because lenders always get a big chunk up front and will get first dibs on the liquidation sale proceeds and fixtures. The smart suppliers saw this coming and either choked them down or filed consignment liens of their own to protect themselves on the inventory.

[Rate This]

Why does Fouts feel the need to inject things like "It's just a contrast to when Art Van was running the company" into statements trying to calm people down? Is he senile or something? Doubling down on how bad it is while trying to tell people it'll be ok makes absolutely no sense...

[TC Talks]

There were some cars at the Traverse City Art Van, nothing frenzied like what Warren had going on.

[Bryce]

An old bent nosed furniture store owner friend of mine, who has since passed away, always used to say, " The two most profitable times in da furniture business is grand opening and going out of business."

He opened and closed at least a dozen stores in the time I knew him and used to buy fresh inventory as he "went out of business."

[ftballfan]

I wonder if the bankruptcy filing will be Chapter 7 or Chapter 11.

I'm very surprised ABC Warehouse is still in business.

[MasterB]

Same here surprised that ABC Warehouse is still in business I thought they would go out of business years ago.

[48125er]

My parents wanted to get an exchange on a new mattress because the one they bought was hard as a rock and now Art van wont honor the exchange, so their stuck with a hard mattress.

Bob's in Grand Rapids floor models are disgusting, they're all stained.

[innate-in-you]

A lot of the furniture in my house came from Art Van.

They are the middle-of-the road furniture store in terms of price point. Better quality merchandise than Gardner-White. Much more affordable than Gorman's. Not ghetto like La-Z-Boy. I am unfamiliar with Bob's Discount Furniture, other than their campy TV spots.

Bricks and mortar furniture shopping options have suddenly become much more limited around these parts. I like to examine the quality of what I'm purchasing when we're talking furniture-level price points. (By the way, IKEA does not appeal to me in the least.)

Art Van has made a number of strategic blunders in recent years. The one that really sticks out for me is their moronic decision to open a bunch of "Pure Sleep" stores. What, exactly, was the point? The long since abandoned "Paul's TV" was another blunder (very weak selection, no home audio, had to walk through the bowels of the store to get to what was hardly more than a kiosk).

The second is their complete failure to evolve the shopping experience. Instead of salesmen dressed in fancy suits descending on you like hawks the moment you step into the store, how about having your employees dress business casual instead? Design consultation? Missing in action! What about accent furniture, lamps, wall decor, etc.? Slim pickings, and the stuff that generally is available for sale is in the overpriced Clearance Center...err..."Outlet."

How about digital marketing and web presence? Every time I do a Google shopping search for furniture, Art Van NEVER appears in the results...EVER! In a world of Wayfair, Overstock.com, and Joss & Main, that is simply unacceptable.

Did anyone ever "LINE UP AT 9AM!!!!" to get freebies that were supposedly handed out to early bird shoppers? Those commercials were so outrageously tacky. I love how the retail chain whose employees wear expensive suits and neckties feature a prolifically pukey booth announcer who sounds like he worked at 103.5 The Blaze or 100.3 Pirate Radio in L.A. circa 1990.

The writing was on the wall long before Thomas H. Lee Partners took over. They thought for some reason making a shit sandwich with Art Van and a couple crappy chains out east would spell success. It was basically business-as-usual after Lee Partners acquired the chain. They should be faulted for not adapting the chain to 21st century shopping habits. I suspect any attempts to change culture & mindset were thwarted or simply were not attempted.

Paul's TV was Art Van's reaction to competing furniture/appliance stores who also started bundling flat-screen TV sets with furniture and/or home appliances.

Mass production of flatscreens and competition in the market drove prices down to the point where they started giving flatscreens away.

Art Van decided that since everyone else was including a flatscreen in their furniture or appliance deal, they had better throw TV into their product line, too.