Furnishings 2000, which has struggled for several years to turn a profit, met with major creditors Tuesday in New York and will soon file for voluntary protection in federal Bankruptcy Court, a company spokesman said. It was uncertain Tuesday if creditors would attempt to force Furnishings 2000 into involuntary bankruptcy proceedings.
The long-struggling furniture store chain's 37 stores in California will remain open if the firm seeks Chapter 11 bankruptcy protection, said the spokesman, who asked that his name not be used. Furnishings 2000 operates stores in San Diego, Los Angeles, Sacramento and the San Francisco Bay area, but the spokesman was unable to say how many stores are situated in each city.
New York-based GF Holdings, a privately held company, acquired 67% of Furnishings 2000's publicly traded stock in late 1989. GF Holdings, which owns Atlanta-based Leath Furniture, a profitable 40-store chain in the Midwest and Florida, had hoped to use Furnishings 2000 as a springboard into the lucrative California retail market, the spokesman said.
However, GF Holdings has been unable to turn Furnishings 2000, which reported only a handful of profitable quarters since its initial public offering in 1983, into a profitable company. "GF Holdings did about everything that they could do," the spokesman said. "But part of the problem was an inventory problem . . . the inventory wasn't fresh, and you have to have a good, fresh inventory in this business."
Furnishings 2000 reported a $3.8-million net loss and $23.3 million in revenue for the three-month period ended July 28, compared to a $2.8 million net loss and $21.7 million in revenue for the like period a year ago.
It reported a $7.1-million net loss and $46.5 million in revenue for the six-month period ended July 28, and an $8.9-million net loss and $49.5 million in revenue a year earlier.
In addition to severe financial problems, the chain suffered from an identity crisis among consumers that was generated largely by a string of name changes.
The company's Southern California stores were known as Cousins Home Furnishings when the company completed its initial public offering in 1983. At that time, however, its Bay Area and Sacramento stores were known as Family Furniture.
In 1985, a Canadian company that gained a controlling interest in the company changed the chain's name to The Brick Warehouse. That name was abandoned in 1987 when the company and its stores became known as Furnishings 2000.
With each name change, the chain also jiggled its merchandising. At times, the chain offered refrigerators and other appliances, along with electronic goods such as stereos and television. But at other times, it billed itself solely as a furniture store.
During the past year, GF Holdings moved Furnishing 2000's corporate offices to Mira Loma from San Diego, the spokesman said.
The stock, which trades over-the-counter, has been trading at $.0625 in recent weeks.