WARREN, Mich. — Midwest furniture retailer Art Van Furniture has announced that it will close all of its company-owned stores next week. The company is expected to file for chapter 11 bankruptcy. However, liquidation sales will begin immediately and are expected to last about 60 days.
Why is Art Van closing? Struggling sales, increased competition from online retailers. Chinese tariffs are also being blamed. In addition, the company expanded too quickly to other Midwestern states. Those are some of the reasons for the decline of the popular furniture retailer.
“Despite our best efforts to remain open, the company’s brands and operating performance have been hit hard by a challenging retail environment,” Diane Charles, Art Van Furniture spokeswoman, said in a statement to the Detroit Free Press.
Art Van Furniture currently has 190 stores across Michigan, Illinois, Ohio, Indiana and Missouri. The company employs about 3,100 people who will be laid off once all of the furniture and store fixtures are sold.
In March 2017, Elslander sold the family-owned furniture business to private equity firm Thomas H. Lee Partners (THL). The company sold the land that Art Van Furniture stores sat on and then leased it back at a lower cost. That move left the private equity firm with new rent obligations.
In Feb. 2018, Art Van Furniture opened its new flagship store on Ford Road in Canton, Mich. The two-story, 70,000-square-foot store stands directly across from European furniture store IKEA. It was the company’s first new store to open from the ground up in 20 years.
Art Van Furniture is a big supporter of America’s Thanksgiving Parade in downtown Detroit. In fact, Mr. Elslander saved the parade with big a donation back in 1990. The non-profit organization The Parade Company says they have enough finances to put on this year’s parade. After that, they will have to look for a new title sponsor in about two years.
Franchise stores are expected to remain open at this time. Those are located in the outskirts of the company’s core in cities such as Marquette, Sault Ste. Marie, Mount Pleasant, Gaylord, Owosso, and East Tawas. The company also operates franchises of Sofa Selects in Mishawaka, Ind., Findlay and Genoa, Ohio, Rockford, Ill., and Coraville, Iowa.
The late Art Van Elslander founded the furniture store back in 1959. Its first location was a 4,000-square-foot store on Gratiot Ave. and 10 Mile Rd. in Eastpointe, Mich. By 1963, there were seven stores. In 1973, the company opened its headquarters in Warren, Mich.
Once again, Art Van Furniture will begin its going-out-of-business sale tomorrow. All of its company-owned stores will be closing within the next 60 days.