Major furniture company shuts down operations, future unknown | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

The furniture manufacturing sector has faced economic challenges over the last year that have led to financial distress, causing factory closures and retailers to close down.

A slowdown in the real estate market in recent years is a top reason why consumers haven’t been buying new furniture.

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When people buy a new house, they often buy new furniture to go with their new residence. If houses aren’t selling, furniture isn’t moving off the showroom floor.

The industry has also dealt with financial issues that other industries have encountered, including rising labor and product costs driven by inflation, higher interest rates on their debt obligations, and fierce competition.

Furniture manufacturers face the consequences of furniture store struggles. When furniture stores have difficulty selling inventory in their showrooms, they don’t purchase more products from manufacturers.

Custom wood cabinetry manufacturer and retailer Worthy’s Run Furniture LLC filed for Chapter 11 bankruptcy protection on May 28 to reorganize its business.

Furniture stores have been hit hard by current market conditions.

Kith Furniture

Worthy’s Run Furniture files for bankruptcy

The Hagerstown, Md., furniture manufacturing and retail company filed its Subchapter V petition, listing up to $50,000 in assets and $100,000 to $500,000 in liabilities.

The company did not indicate a reason for filing for bankruptcy in its petition.

North Carolina furniture manufacturer and supplier Progressive Furniture, which provides products to major retailers, will close down its business at the end of the year and lay off all 30 of its employees, after its primary supplier in Mexico, which provided 60% of its products, decided to close its business.

Progressive imports wooden furniture from both Asia and Mexico.Progressive Furniture, a subsidiary of ready-to-assemble furniture company Sauder Woodworking, sells its products through Walmart, Target, Home Depot, Lowe’s, Amazon, Wayfair, and other furniture retailers.The company, which operates a warehousing and distribution plant in Claremont, N.C., said it will fulfill existing orders and honor warranties until it closes.

It has no plans to file for bankruptcy.

Retailers having difficulty in the sector include popular 5th Avenue Furniture Warehouse Inc., which filed for Chapter 11 bankruptcy protection to restructure its debts, facing a disputed tax claim.

The Bay Shore, N.Y., furniture store filed its Subchapter V petition on June 6 in the U.S. Bankruptcy Court for the Eastern District of New York, listing $100,000 to $500,000 in assets and $1 million to $10 million in debts, including $2.37 million owed to its largest creditor, the New York State Department of Taxation & Finance.

Kith Furniture shuts down factory

Finally, Kith Furniture, manufacturer of bedroom furniture, entertainment centers, and dining room pieces, has shut down its Alabama factory, which employed 59 workers, a former company executive and former employees told Furniture Today.

The Haleyville, Ala.-based furniture company, which was founded in 2011, at one time employed 260 workers at five plants in Alabama.

More bankruptcy:

In 2012, it signed a lease to permanently occupy an over 5,000 square-foot showroom in High Point, N.C., beginning in April 2013, Furniture World reported at the time.

Kith Furniture’s website lists both its Haleyville plant address and its High Point showroom address, but does not reveal whether the showroom is still operating.

The case goods furniture manufacturer specializes in bedroom pieces, including headboards, dressers, chests, nightstands, mirrors, metal beds; entertainment consoles; dining tables; accents; and barstools.

The company sold its merchandise through regional showrooms and dealers in the Southeast, including Alabama, North Carolina, South Carolina, and Texas.