Retailing: Tough Economic Times Are Knocking Stuffing Out of Many Furniture Stores
Homer's Furniture Co. survived two World Wars, the Great Depression and close calls from cutthroat competitors and building slumps. But Homer's couldn't survive the current crunch, which has wiped out hundreds of furniture stores across the country.</br></br>Based in Chicago, Homer's was known for custom-crafted furnishings, once using extra-high cushions to make a sofa more accessible for a paraplegic couple. But by making its own furniture, the family-owned chain had high fixed costs. Then the recession cut customer traffic. Discount wars ate up margins. Specialty stores siphoned sales. In 1991, Homer's lost money for the second consecutive year, and the company's creditor shut Homer's five stores on New Year's Eve.</br></br>"When it happens, it's like a loved one lying in bed dying, and one day he closes his eyes," says Chairman Marvin Homer, whose immigrant father founded the company in 1912 with four brothers. "I felt numb."</br></br>The home-furnishing business has taken a beating this recession as consumers have decided they can do without new $1,200 wicker sofas and $700 paisley poufs. Retail sales of furniture fell 6% last year, to $28.19 billion, the second consecutive yearly decline in inflation-adjusted dollars, according to Wallace Epperson, an analyst at Mann Armistead & Epperson, based in Richmond, Va. More than 1,800 furniture-store companies went out of business in the first 10 months of last year, up 21% from the year-ago period, reports Dun & Bradstreet Corp.</br></br>Not just the mom and pop operations are failing. This month, Seaman Furniture Co., operating under heavy debt after going private four years ago, filed for Chapter 11 bankruptcy-law protection from creditors. The furniture retailer, based in Uniondale, N.Y., said it plans to close 15 of its 37 stores. The wreckage is even worse in Southern California, land of high rents and upscale upholstery, where Barker Bros., RB Furniture Inc. and at least two other major retail furniture chains have filed for bankruptcy protection in recent months.