Formerly bankrupt furniture chain returns to physical stores | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Furniture retail chains have suffered from the same difficulties that other retail sectors have over the last five years beginning with the lingering effects of the Covid-19 pandemic.

Supply-chain issues that were exasperated by the pandemic were followed by a decline in demand for home decor as housing sales declined in 2022 and 2023, caused by rising interest rates.

📣Presidents Day Sale: Get Free access to TheStreet Pro for 31 days – Claim your offer today! 💸

Inflation over the last three years resulted in rising costs of inventory that led to an increase in prices which discouraged consumers from purchasing merchandise.

Deteriorating business conditions led furniture retailers to close locations, implement out-of-court restructurings, and sometimes file for bankruptcy.

Furniture chains had difficult years in 2023 and 2024 as several companies closed stores and filed for bankruptcy.

Upscale furniture chain Mitchell Gold + Bob Williams ceased operations on Aug. 26, 2023, and closed 27 stores in 14 states. It then filed for Chapter 11 bankruptcy on Sept. 6, 2023. A month later, it converted its case to Chapter 7 liquidation.

Furniture and mattress retailer The RoomPlace filed for Chapter 11 bankruptcy in February 2024 in the U.S. Bankruptcy Court for the Northern District of Illinois to restructure its debts and close several of its stores. It blamed declining retail sales across the country and other challenges in the furniture industry.

The Lombard, Ill. furniture chain closed eight of its 26 stores that were located in Illinois, Indiana, and Wisconsin and said it would seek to strengthen its 18 remaining stores in the Chicago area.

Z Gallerie plans to return to brick-and-mortar locations.

Z Gallerie to return to brick-and-mortar locations

Finally, formerly bankrupt lifestyle furniture brand Z Gallerie will return to brick-and-mortar retail locations in March 2025 when its new owner Karat Home, which bought the company out of bankruptcy in January 2024, opens a new warehouse outlet in Gardena, Calif., Furniture Today reported.

The new Z Gallerie warehouse outlet will feature exclusive deals and support community recovery from the Los Angeles-area wildfires by offering affordable home furnishings, company CEO Scarlett Fan said.

More bankruptcy:

Once the Gardena store is operating, Z Gallerie plans to open a pop-up store in Texas, with the most likely destination in Dallas or Houston, the CEO said.

DirectBuy Home Improvement, an affiliate of parent CSC Generation Holdings, had been Z Gallerie’s parent company. The retailer operated 21 stores in nine states and an e-commerce platform. The parent filed for Chapter 11 bankruptcy on Oct. 16, 2023, in the U.S. Bankruptcy Court for the District of New Jersey, closed all its locations and sold its assets.

The bankruptcy was the third Chapter 11 filing for the then-parent companies of Z Gallerie, as the retailer also filed for bankruptcy in 2009 and 2019.

DirectBuy said Z Gallerie suffered from the Covid-19 pandemic’s effect on the retail industry and supply chain, as well as import-cost increases in late 2021 and into 2022. The problems severely impacted its brand profitability and cash position.

In court documents, DirectBuy said increased interest and mortgage rates led to a slowing of the housing market and new home purchases, Much of its business then had been driven by home purchases.