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Tuesday, December 22, 1998
Levitz Furniture to close 27 stores, cut 1,000 jobs
Bloomberg
BOCA RATON, Fla. -- Levitz Furniture Inc., the No. 2 home-furniture retailer with a store in Las Vegas, will close 27 of its 90 stores and cut 1,000 jobs, or a quarter of its work force, to focus on the chain's most-lucrative markets, such as the West Coast.
The company's stores in Nevada will not close.
Levitz, which has operated under bankruptcy protection since 1997, will also shut 48 of its 65 warehouses. The Boca Raton-based chain will close stores in Florida, Indiana, Kansas, Louisiana, Maryland, Missouri, Texas and Virginia.
Levitz will focus on its 63 stores on the East and West coasts and Minneapolis, said Edward Grund, who was named chairman and chief executive in November.
In addition to Nevada, stores to remain open are in Arizona, California, Connecticut, Delaware, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Oregon, Pennsylvania and Washington.
The retailer plans to open at least 15 stores in these markets, including at least three in the first half of next year.
Levitz said the moves are aimed at returning the company to profitability, making its stores "more relevant" to customers, and making its systems more efficient.
Proceeds from the sale of stores, warehouses and related inventory will be used to reduce debt, refurbish stores and open new ones, the company said.
The retailer has struggled at a time when the furniture industry is the strongest it's been this decade, as low interest rates spark home sales and home-improvement projects. Other chains, including Ethan Allen Interiors Inc., Haverty Furniture Cos. and Williams-Sonoma Inc.'s Pottery Barn, have succeeded by offering updated styles and innovative merchandise.
Levitz, which opened its first showroom in 1963, sold furniture aimed at a baby-boomer generation that was just starting their first households, analysts said.
Those customers aged and were no longer interested in the finance packages and merchandise sold at the company's warehouses, they said.
Review-Journal writer Monica Caruso contributed to this report.
"Levitz just didn't mature and grow with the baby boomers," said furniture analyst Wallace Epperson Jr. of Interstate/Johnson Lane Inc.
Heilig-Meyers Co. is the nation's biggest furniture chain.
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