Sofa Express files for bankruptcy protection
Friday, December 07, 2007
DAYTON — Sofa Express and More, which advised its employees internally this week that it would close its home furnishings stores, said it has filed for bankruptcy reorganization and will close its 41 stores.
The decrease in sales of homes hurt Sofa Express, said Woolard Harris, chief executive officer of the company. Housing turnover can represent 20 percent of furniture sales in any given year, an industry analyst said.
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Increased costs of gasoline and other distribution expenses had a "very negative impact" on the company's financial performance, Harris said.
The company, based in Groveport near Columbus, said it filed a Chapter 11 bankruptcy reorganization petition Thursday in federal court in Nashville, Tenn. Under reorganization, a company may continue operating under U.S. Bankruptcy Court protection from creditors while developing a plan to put its finances in order. Sofa Express operates in Ohio, Tennessee and the Carolinas.
Sofa Express on Monday gave its employees 60 days notice of its plan to close its stores. Employees haven't been told when specific stores will close, or when they will lose their jobs.
Sofa Express said it has informed state units for dislocated workers, as well as elected officials, in its various markets so they can help Sofa Express employees find new jobs, Harris said.
Employees interviewed by the Dayton Daily News said Sofa Express' effective end of shipping new furniture merchandise in recent weeks has hurt sales representatives who are paid commissions on sales and need merchandise to sell. Furniture deliveries are to be ended Dec. 14 and no new parts are being shipped to take care of customers who have breakage problems with furniture, an employee said.
Sofa Express has begun planning a liquidation of remaining inventory, Harris said. A firm will chosen during the bankruptcy proceedings to handle the liquidation, he said.
Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.
