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

[TC Talks]

The longstanding Pasquale's restaurant is empty

Damn, that was a late night haunt of mine 35 years ago.

Mickey Shore had been the car audio department of ABC since at least 2002. That was the first and last time I've been in one of those places...

[WOHO]

Brian wrote: "... I’d like to bring the chair to the store and throw it through their fucking window...."
Thanks for giving me a good laugh today Brian- the sad thing is, that's probably how you really feel and what Art Van customers have been screwed-over. I questioned when they built a monster store in the Toledo suburbs then followed-up with worthless understaffed Sleep Shops in Toledo.

[TC Talks]

WOHO

A bit of advice: any business who yells at you and has sales every two weeks is probably not going to offer the best experience. That strategy is designed to create "Urgency" so you will buy now.

When I need a couch, I decide length, color etc and go online. Art Van didn't even show up in Google Shopping! How crazy is that?

[Rate This]

WOHO

A bit of advice: any business who yells at you and has sales every two weeks is probably not going to offer the best experience. That strategy is designed to create "Urgency" so you will buy now.

When I need a couch, I decide length, color etc and go online. Art Van didn't even show up in Google Shopping! How crazy is that?

That would seem to show a lack of an online marketing presence... inconceivable in 2020 but here we are...

"WHAT DO WE HAVE TO DO TO GET RID OF OUR EXCESS INVENTORY???????"

Now we know...

[Colonel Flagg]

The longstanding Pasquale's restaurant is empty

Damn, that was a late night haunt of mine 35 years ago.

Pasquale's still packed 'em in, but the kids were no longer kids, and wanted to retire. Sad.

[Mega Hertz]

Well, this would explain why when I had Art Van come out to fix my broken recliner in JANUARY, they had to “order parts” and have been jerking me around ever since. I’d like to bring the chair to the store and throw it through their fucking window.

I'd love to see this go down. Many retailers do say "Bring it back if you're not satisfied", but they made no specifications

[proxima3]

Well, this would explain why when I had Art Van come out to fix my broken recliner in JANUARY, they had to “order parts” and have been jerking me around ever since. I’d like to bring the chair to the store and throw it through their fucking window.

You're thinking of Discount Tire.

[mmg]

The longstanding Pasquale's restaurant is empty

Damn, that was a late night haunt of mine 35 years ago.

Pasquale's still packed 'em in, but the kids were no longer kids, and wanted to retire. Sad.

Big Boy will be taking over Pasquale’s

https://www.freep.com/story/entertainme ... 965268001/


Sent from my iPad using Tapatalk Pro

[audiophile]

I didn't realize Big Boy was sold. There new CEO sold their properties and now is leasing them back. Sound familiar?

https://www.crainsdetroit.com/restauran ... -ownership

[696lover]

Thanks for taking the time to share some details, 696.

I'm a little confused, though. Was the structure you explained set up post-sale or was it instead concurrent with the sale to Lee Partners?

I do not quite understand the role of the "in between" entity. Is this a situation where the real estate owner leases the stores/land to the intermediate entity, who in turn subleases the store/land to Art Van Furniture? Art Van Furniture pays rent to the intermediate entity, who in turn pays rent to the real estate owner? If so, my guess is the equity percentages when comparing the intermediate entity to the real estate owner vary somewhat. Perhaps part of the rent paid to the intermediate entity funded dividends to its equity holders?

It's hard for me to envision a scenario where Citi would agree to release 1st lien mortgages from the real estate just from normal course loan amortization. Commercial real estate mortgages placed in the capital markets often have 20 or 25 year amortization schedules, which means very little of the original principal balance would have been repaid by now. That is, of course, unless a bunch of excess cash flow from operations was used to prepay the loan.

Usually, when a company is suffering from financial deterioration, creditors look to increase collateral rights, not decrease them. My guess is the Credit Agreement must have contained some sort of asset coverage test, and that if a certain level of collateral coverage could be demonstrated, collateral deemed excess collateral would be allowed to be released. Any releases of real estate collateral must've occurred when the real estate loan borrower was still in good standing under its Credit Agreement.

If Thomas H. Lee walks away with any type of significant proceeds here, it means the senior secured creditors were all deemed unimpaired.

Let's face it. The family wanted to bring in private equity in 2017 for a reason. They saw the writing on the wall. Unfortunately, private equity's involvement in this case evidently made things worse, not better. The revolving door in the CEO's office and other distractions prevented the Company from overhauling its business model to adapt to modern shopping habits.

Main reason used to be to game the Michigan SBT tax. In addition to this use in the Art Van case, you can allocate passive income easier--plus in Michigan very long term leases, longer than 30 years, count as long term capital gains instead of passive income.* (*State dependent)

[TC Talks]

Unless they consider the real estate? Sometimes losing is winning.

Here's a theory:

A) The liquidation sale will produce profit
B) Have they actually filed for bankruptcy?
C) They continue to own the real estate and have tenants lined up
D) They take a hit but it's less than they are suggesting.

Art Van leaves a retail furniture deficit in Detroit. If 1/2 of those stores open as a furniture store, they will do great. Costco and Wairfar are not going to absorb all the market left open.

I would be looking at a reboot as a smaller leaner company with a larger drive time between locations. There is a silver lining here for someone.