Levitz Furniture to Shut 27 Stores, Cut 1,000 Jobs

Levitz Furniture Inc. said Monday that it will close 27 stores and cut 1,000 jobs, or 25% of its work force, in a move to get the pioneer of “big box” retailing out of bankruptcy.

The company said it will close all its stores in eight states in the South and Midwest. Its 63 remaining stores will be concentrated in New York and a dozen other states, including California.

Levitz also said it will reduce to 17 its distribution centers, which had numbered 65 when Levitz filed for Bankruptcy Court protection from creditors in September 1997.

The Boca Raton, Fla.-based company said unspecified proceeds from the sale of the shuttered stores, which are mostly in urban sites now out of favor with many retail chains, will be used to pay off debt, refurbish some stores and open new ones.

Levitz said it is experimenting with new store formats and will open 15 new stores, including three in the first half of 1999.

Richard Levitz founded the furniture retailer in 1910 with his first store in Lebanon, Pa. In 1963, the company pioneered the warehouse showroom concept with its Allentown, Pa., store.

But Levitz experienced declining sales and profitability in recent years as new competition flooded the market. Consumers began to favor store layouts that resembled home interiors rather than stacks of furniture lined up in rows. Levitz said it will remodel some of its remaining stores to create home-interior-style layouts.

It also said its head marketer, Robert Homler, is resigning, becoming the second senior executive to leave in two months. Michael Bozic, brought in as chief executive to turn Levitz around three years ago, quit in November to become vice chairman of Kmart Corp., after overseeing the divestment of 39 other Levitz stores.