Furniture going out of business sale
As Reported at Northjersey.com:
A high-end, heirloom-quality furniture manufacturer and seller that has called Paterson home for more than 60 years — whose clients include actors, kings and billionaires — is closing its massive showroom in the city’s downtown to open one closer to customers in Bergen County.
The decision by Greenbaum Interiors to shutter its 100,000-square-foot showroom, while leaving a company-owned, 30,000-square-foot factory in Paterson, is the latest blow to the state’s third-most populous city, dramatically diminishing the presence of a high-profile business that draws customers from North Jersey and New York State.
Greenbaum Interiors notified customers of its plans by mail last week and email this week, touting a sale that will slash prices by up to 65 percent to reduce its inventory enough to fit into a smaller showroom in Bergen County.
“If people won’t come here, there is nothing I can say or do to make them come,” said Susan Greenbaum Gross, president of Greenbaum Interiors. “We have to be close to our customers.”
No Bergen property has yet been identified. But the company, which has 55 employees, is looking for a 10,000-square-foot to 14,000-square-foot space at the northern end of Route 17 to house a showroom expected to open in the fall with 15 employees.
That would leave 35 workers and a 5,000-square-foot showroom in the Paterson factory, which will sell furniture. Greenbaum Interiors also has a 7,500-square-foot showroom with five employees in Morristown.
The company’s wealthy clients have included actor Eddie Murphy, who bought for his homes in Englewood and California; King Hussein of Jordan; and a Russian billionaire, whom the company declined to identify and who bought an entire houseful of furniture that was shipped to Russia.
“It’s a big loss,” Jones said, though he noted that the company will retain a significant presence in the city.
“The clientele doesn’t come from Paterson, but the workers do,” he said. “The labor, the work, the storage, the repair — all that stays in our city.”
From WKTV, Channel 2, Utica, NY
After more than 60 years, Drogen’s Home Furnishings in Oneonta closing
By Lexie O’Connor
ONEONTA, N.Y. (WKTV) – Drogen’s Home Furnishings on Route 23 in Oneonta will close in July, after more than 60 years of furnishing homes across Central New York.
“We saw a tremendous opportunity and very substantial growth in the electric supply industry and then the opportunity came and a local merchant said he was very interested, so we said this is a great opportunity,” said Drogen.
Drogen started working in what was then his parents store when he was just a young boy. Although the business has changed with competition from larger retail stores and online shopping, he feels there’s still a place for local retail.
“For me, it’s very clear there is definitely a place in this world for locally-owned, independent business who offer, service, competitive pricing and the personal touch,” says Drogen. “And what I have observed over the years, even though there’s been lots of competition to those kinds of sorts, I think the local businesses will endure a long time.”
Once closed, the property will remain a local furniture store, turning into Scholet Furniture.
Drogen anticipates the store to close sometime in July. He said it’s just a matter of when all the furniture is sold.
Planned Furniture Promotions, Inc. (PFP) announced the addition of retail furniture veteran JR Diffee, the long-time President of Colony House Furniture, an upscale furniture showroom in Arlington, Virginia. JR joins PFP as its High End Event Consultant and will advise upscale retailers on how to use high-impact events to rejuvenate or reinvent their retail sales strategies.
Under JR’s stewardship, Colony House was widely recognized as one of the finest design-oriented retailers on the East Coast, as well as a company that consistently ranked among the top dealers of lines like Baker, Henredon and Hickory Chair. With an education and vast work experience in sales, marketing and insurance, JR joined his family’s business in 1985 and was appointed its president in 1991. JR successfully led the company in that role until last year when an offer was made on the company’s real estate. JR selected PFP—the leading specialist in high-impact, promotional furniture sales events—to conduct Colony Houses’ highly successful store closing sale.
After working with JR at the store closing sale, PFP’s team was highly impressed with his management and sales experience as well as his business and strategic acumen, and immediately asked him to join its team. “The high-end retailers have been some of the hardest hit by the economic downturn and many are in need of financial assistance,” said Tom Liddell, senior vice president, PFP. “We’ve successfully assisted many of the nation’s most well-known high-end retailers. JR has an intimate knowledge of their concerns and needs and will certainly be a huge asset in working with these clients”, Liddell added
JR is currently on the Board of Directors for the Arlington County Chamber of Commerce and is involved in the Leadership Arlington organization. He enjoys hiking, cycling and playing golf, and is a member of Congressional Country Club. JR is married and has four children.
PFP is a leading specialist in conducting high impact, promotional furniture retail sales. The company is responsible for developing and executing record-breaking premium store events for independent retailers including; Sussan’s in the Houston area, Bruno’s in Oklahoma City, Kornmeyers in Baton Rouge, Liberty in Jacksonville, Mastercraft Interiors in MD & VA, Homestead House in CA, Hitchcock Chair in CT along with others, such as Porter’s in Racine and Gabbert’s events in Texas. They’ve also handled many of the major-chain furniture liquidation sales in the U.S., including those for Wickes, Huffman Koos, Rhodes, Rosa’s and recently with RoomStore’s Texas outlets.
To learn more about Planned Furniture Promotions, please visit www.pfpromotions.com
Let me tell you the story of a business that was founded over 50 years ago. They were a family furniture operation that had grown from a small mom and pop shop to an organization that operated three stores and did $10 million in sales. Times were good-for a while. Last year they declared bankruptcy and closed their doors.
by David McMahon, published by and for WHFA (Western Home Furnishings Association). Reposted with permission.
The slowing economy, as in many cases like this, was only one factor. In fact, in this case there was only a modest sales decline relative to similar businesses. The primary factor for their demise was an outright failure to be a student of their business.
Their family had grown so there were more people to support. Between the various brothers, sisters, sons, daughters, and cousins, there were multiple people who relied on the business to pay for their mortgages and feed their families. On top of this, there was no clear leader. Every decision had to go through a sort of unanimous voting process. This slowed their speed to react and innovate. And the decisions that were made were often times on issues that were not of any great benefit to the business. They wasted time. It got so bad that there was one argument amongst the brothers and sisters on who was supposed to put the toilet paper in the bathrooms! They had little time to focus on what counted. They only tracked written sales. All the other critical measures were ignored.
Eventually they decided to take on debt to finance their growing accounts payable. They tried mass event sales to blow out their inventory. They were just able to break even. They repeated this strategy of refinancing debt and big event sales. Eventually they became insolvent. This meant that they could not pay for their short term obligations. Minimal profitability, missing sales goals, and rising debt put the nail in their coffin. Bankrupt.
Unfortunately, stories like this are far too common. If this company had a leader and a team who knew what red flags to look for and took action soon enough, they would have survived. In this article I’m going to show you the red flags to look for. If you keep your eyes on these, you will greatly improve your chances of success and you will be able to take corrective measures sooner. With you as a decisive leader of your capable team, your cash flow potential can be maximized.
- Sales to Plan.
Sales drive everything. Your plan is your realistic projection of sales or your budget. It is also t dollar amount needed to produce your required profitability and cash flow. To calculate this, take your actual monthly sales and divide by monthly sales on your budget (your pro plan). For example, if sales were $550,000 and planned sales were $525,000, then sales to plan is 105 percent. This should be checked monthly, quarterly, and year-to-date each month Repeated under performance of sales to plan (under 100 percent) signifies either performance issues with sales or a budget that needs to be adjusted in its entirety.
This is the ultimate source of all cash It is sales minus all your expenses. To view as a percent, divide that number by sales. No operation can operate with a loss for very long and few can operate at average profitability (2-4 percent) and grow their business. Alternatively, healthy profitability (7 percent+) enables growth through reinvestment of equity into the business. This investment leads to expansion and takes the form of technology, train capital investment, merchandise lines, and human talent. Paying out all the profit to shareholders does little for the future of business. It is important to note that profitability needs to be consistent to really make a difference. It should be checked each month on certifiably correct financials b for the month and year-to-date.
- Quick Ratio.
Also called the acid test ratio. It is a measure of the liquidity that you have in your business. It calculated by taking your current assets, less your inventor divided by your current liabilities. An even ratio of 1 is so Anything under .5 means your business may be in a dang area. Companies with very low quick ratios are at risk of insolvency.
- Cash to Current Payables.
This measures your ability to pay for your immediate responsibilities. It largely indicates whether you can honor your short term loans from your vendors. The importance of this is critical to continue uninterrupted flow of goods. Many companies in the last few years have shut their doors because their vend simply stopped shipping. Track this monthly and seek to b consistently above 25 percent. Anyone under 15 percent is probably struggling to make ends meet and are most likely dipping into lines of credit.
Gross margin return on inventory. All your cash comes from selling inventory, right? And if you sell your inventory faster or carry less of it, you generate cash faster, right? That’s what GMROI is-the ultimate measure of your operations effectiveness at creating dollars! Figure this by annualizing your gross margin dollars and dividing by your average or current inventory on hand. Do it every month without fail. Seek to continually improve this number overall. I call a $2 GMROI a break-even GMROI and a $2.5+ GMROI an “in the money” GMROI.
- Inventory to Sales.
This flag is your key to controlling new buying. Purchasing should follow sales results or realistic forecasts. You all know what could happen if you go to market and you buy without a plan. Only a certain percent of the new merchandise sells; the rest sits in stagnation. Obviously, invoices become due for that inventory whether it sells or not. Timing and the amount you spend on new merchandise is everything. In fact, most of the businesses that have gone out in the last few years were overbought when the economy was good. That’s why they could not weather the storm. Figure your inventory to sales by taking your average or current inventory that is in your possession and divide it by your annualized sales. I’ve been in the analyzing and advising business for over a decade and have never seen a profitable and growing business operate consistently above 20 percent. I call 15-17 percent the “sweet spot”. Faster turning categories such as bedding or appliances can be even less. Only purchase new merchandise if inventory to sales is in the “sweet spot” range.
- Gross Margin.
How much money do you have left to pay for all operating costs and make a healthy profit after you deduct your cost of goods and freight from the sale of your merchandise? That is your gross margin. Figure as a percent each month and year-to-date by dividing by your sales. In retail furniture and bedding, most operations have two options, in my opinion: be above 46 percent or below 42 percent. The reason relates to sales volume and turns. There is just very little economies of scale with small and medium sized businesses. Fixed operating costs can eat profits unless the margin is appropriate. Unless you have a killer deal on rent and a great location, a store doing under $5 million will find it difficult to operate at under 46 percent margin on their financial statements. Alternatively, for example, a store with sales of over $20 million could operate at a lower margin and be a low cost seller and still be decently profitable. Below is profit matrix of where cash is typically made with respect to gross margin and turns. Avoid the “death zone”.
- Operating Costs.
These are all the costs that you incur each month after your cost of goods. You should set target percentages of sales by department in your master budget so that you can avoid expense profit erosion. The commonly tracked departments in your operating budget are: administration, occupancy, selling, marketing, service, warehouse, delivery, and finance. Overall high profit operations seek to be under 38 percent. Be a student of your business. Watch for the red flags. That is the first step on your road to achieving a healthier cash flow position. It is the first step in giving your business longevity whatever your sales volume is. It is difficult to improve what you don’t track so doing this will help. The next step is to take the right decisive actions at the right time. The slowing economy, as in many cases like this, was only one factor. In fact, in this case there was only a modest sales decline relative to similar businesses. The primary factor for their demise was an outright failure to be a student of their business.
The sons, with the support of their father, opened Home Furniture Gallery outlets late last month on Sheridan Drive and this month on Union Road. The sons all held positions with Rosa’s Home Stores, which left more than 1,000 creditors when it filed for bankruptcy last December, but the Rosas say Home Furniture Gallery is an entirely separate enterprise. “It’s a brand-new business — it’s brand new,” said Paul F. Rosa, the founder of Rosa’s Home Stores who serves as chairman of Home Furniture Gallery.
One main distinction between the old and new stores is Home Furniture Gallery isn’t selling electronics or appliances.
“There’s unprecedented pressure on profit margins for both appliances as well as consumer electronics,” said Burt P. Flickinger III, a Buffalo native and managing director of Strategic Resource Group, the retail consulting firm. Sons Paul M., David and Anthony Rosa say they are confident they can take on the local and national chains in what is a highly competitive furniture and bedding market.
They have opted not to use the Rosa’s name on the company, or in its advertising, but analysts believe their experience and reputation only can help them.
Once they fill a few remaining open positions, the company will employ 50 workers, including a number who worked for Rosa’s Home Stores.
ROSA’S HOME STORE TO LIQUIDATE NEW YORK LOCATIONS
Planned Furniture Promotions Honors Customer Deposits
Buffalo, NY, December 23, 2010 –- Rosa’s Home Store, a leading home furnishings appliance and electronics retailer operating four stores in Western New York since 1981, filed for Chapter 11 Bankruptcy protection on December 9, 2010 in the United States Bankruptcy Court for the Western District of New York. As a result of Tuesday’s bankruptcy hearing, the company will begin Going-Out-Of-Business/Bankruptcy Liquidation sales managed by the foremost furniture event company, Planned Furniture Promotions, Inc.
All customer deposits made prior to the Chapter 11 filing will be honored. “This was the most important aspect of the bankruptcy filing”, said Dean Rallo, president, Rosa Home Store. “Rosa’s didn’t want this bankruptcy to negatively impact our loyal customers, so we worked very closely with our legal team and the bankruptcy court to put our customers first.” Store customers with open orders will receive instructions for completing their orders.
“We’re proud to have been chosen by Rosa’s, an institution in the community, to assist the company in this difficult time,” said Tom Liddell, senior vice president of Planned Furniture Promotions. “We look forward to assisting Rosa’s complete the many customer orders that were placed prior to the Bankruptcy filing and conducting a sale that will benefit the company, its vendors and creditors, and many local customers.”
Rosa’s Home Store operates three locations in Buffalo and one store in Niagara Falls, a region of the country that has been in economic decline for three decades. The stores will be closed for a short period, to complete an inventory and prepare for the liquidation, followed by the public sale early next year.
It was very sad for a downtown 52 year old business to close but we have, with your help, accomplished this with dignity and good repute and I will always be appreciative of your company and staff. We could have never done this by ourselves.
Patricia Mathis, President
Customer service right to the very end. Our legacy is intact, and we thank you, Planned Furniture Promotions.
Now we are left with our buildings broom-clean, our integrity intact, and no added stress at the end of an era. We want to thank David Cosenza, Sr. and the PFP team for a job well done with the utmost integrity and professionalism.
AF Dawahare, President
It was extremely important to me that my staff who had worked very hard for me for many years he included and taken care of during this sale. This was done very effectively and my people became part of the PFP team. This was probably the most gratifying part of the sale and as important to me as the success of the sale.
AA Mooney Company
Mark E. Reingold, President