DETROIT - After months of financial struggle, Midwest furniture retailer Loves Furniture has filed for Chapter 11 bankruptcy.
Loves acquired the assets and inventory of 27 former Art Van Furniture stores in May. Art Van is the Midwest retailer who went bankrupt earlier this year. Levin Furniture had also acquired some of Art Van's stores, notably the ones it had sold to the company three years earlier.
The bankruptcy filing comes soon after it was sued by furniture manufacturers Southern Motion and Fusion Furniture for breach of contract and unpaid bills. Southern Motion, who owns Fusion Furniture, says Loves failed to timely pay the nearly $2 million it was owed.
Logistical and inventory issues played a big role in the company's struggles.
"While initial sales were strong as compared to the projections, sales fell significantly in light of Loves' difficulty locating, obtaining and delivering merchandise to its customers," interim CEO Mark Peters said in court documents. "Many of Loves' suppliers refused to ship further product, much of which had been ordered in May and June, so that items that were expected to be received on which customer deposits had been taken were not longer expected."
Loves contracted with Penske Logistics Services for warehouse and transportation service. Peters said multiple shipping issues with Penske negatively impacted the stores' ability to open. It also hurt the company's ability to transport products to customers timely.
Peters said the company has too much inventory and too little cash to operate. It has entered an agreement with Planned Furniture Promotions to liquidate excess inventory and cover operating expenses. Peters hopes to move forward with 12 stores.
Loves was founded right after Art Van went under. The company grew between May and October, acquiring 13 additional stores throughout the Midwest.
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