RoomStores Seeks Chapter 11 Bankruptcy Protection

by San Antonio Attorney

RoomStores Seeks Chapter 11 Bankruptcy Protection

RoomStores, a 20-year old furniture retailer known for its marketing jingle “We put it all together to save you more,” has filed for bankruptcy protection.  The company officials have earlier predicted that the retailer would lose about $2 million in 2015.

The longtime retailer was launched in 1993 with two stores located in Phoenix.  It currently operates 11 showrooms in Arizona, including nine stores located in the Valley, Casa Grande and Prescott.

The RoomStores blamed their financial losses of the 2008 housing crash spillover and the proliferating furniture retailers that also joined in the business competition, according to a petition for Chapter 11 reorganization filed in U.S. Bankruptcy Court in Arizona on Friday.

An executive from the company stated that even when the market was already recovering, increasing competition among furniture retailers was the problem and the company can no longer earn the same revenues for the past years.

The company hopes that with its Chapter 11 filing, the creditors are protected as it is still in the process of reconstruction.

RoomStores already notified its employees regarding layoffs and store closures last week.

This is stipulated due to a federal regulation that employers that have more than 100 workers are obliged to give a two month notice of closures and layoffs.  The layoffs are expected to take effect by February.

Co-owner Alan Levitz stated that if the planned promotional sales will be put to place and the higher level executives can negotiate with creditors, the company can still maintain its operations.

Stores will still be open and its business operations will carry on.  Customers that are on credit plans are encouraged by RoomStores to continue to make their usual installment payments.

The company estimated its debts ranging between $1 million and $10 million from several creditors.

 

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