Shocker! Art Van To Close All Stores; Liquidation Starts Friday
Nobody expected this. Art Van, which has been experiencing financial difficulties for the past few years has announced it's going out of business. A liquidation sale begins on Friday.
Multiple reports say Art Van, which has stores in five states, is the latest victim of the "retail apocalypse". The company opened its first store in 1959. The Van Elslander family sold the chain to Thomas H. Lee Partners out of Boston in 2017.
One note from the Detroit Free-Press though says all may not be completely lost.
Art Van is expected to declare bankruptcy early next week. The filing would be a Chapter 11 reorganization, yet could potentially result in the permanent closure and liquidation of all Art Van Furniture stores — unless one or more buyers step forward to rescue the retailer. - Detroit Free-Press
The Detroit News quoted Alex Calderone, a financial advisor, which experience in leveraged buyouts, saying,
"The private equity playbook, which almost always results in aggressive use of leverage which increases the risk of failure exponentially, has not worked out for other retailers in the past and didn’t serve Art Van well either. When an investment thesis doesn’t pan out, equity sponsors tend to cut their losses quickly." - Detroit News
Reports had begun two weeks ago that the company was having serious financial troubles, and that it was looking for buyers. The Van Elslander family was rumored to be one of the bidders, but it appears any sale talks ended up fruitless until now.