The Mitchell Gold Co. and Klaussner Furniture Industries Inc. shut down this month after problems with lender financing forced the home goods companies to fold up.
Credit markets was already tightening up before Silicon Valley Bank and Signature Bank collapsed, First Republic needed a bailout and the Credit Suisse takeover sent shockwaves through the banking sector. Heartland Tri-State Bank in Kansas also failed last month.
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Higher U.S. interest rates are pressuring many business balance sheets. Though True Religion‘s turnaround put it on good footing to get new financing, Tuesday Morning and Bed Bath & Beyond‘s bankruptcies illustrate the problems in the struggling home goods sector.
Mitchell Gold, the luxury home furniture and decor retailer operating under the banner Mitchell Gold + Bob Williams, abruptly shut down on Saturday. Signs plastered on its Taylorsville, N.C. office and manufacturing facility said the employer of roughly 700 “recently and unexpectedly learned that we are unable to continue business operations.”
A letter from interim CEO Chris Moye said the company closed because it couldn’t “secure critical financing to continue business operations,” according to the Taylorsille Times.
Employees were terminated as of Friday. Healthcare and other benefits will expire Aug. 31, 2023, and Oct. 25 is expected to be the last official day of employment.
Mitchell Gold and Bob Williams turned the small upholstery firm they cofounded in 1989 into an international business with nearly 1 million square feet of manufacturing and warehouse space. It sold home furnishings, including eco-friendly upholstery, bed linens, accessories, window treatments and furniture. The hospitality division sold to top hotel chains and eateries. The business operated 30-plus Mitchell Gold + Bob Williams Signature Stores, according to the company website.
Earlier this month, North Carolina’s Klaussner, known also as Klaussner Home Furnishings, shut down. Like Mitchell Gold, the company closed on Aug. 7 because a lender “unexpectedly” decided to stop funding the Asheboro furniture firm.
In business since 1963, Klaussner employed 893 who lost their jobs, according to a WARN noticed dating Aug. 7.
And Solid Comfort, a Fargo, N.D.-based maker of casegoods for firms such as Marriott and Hilton in the hospitality industry, appears to have shut down at the start of August. In operation since 1981, the furniture maker’s manufacturing plant is now up for sale.
The business originated as a maker of pine and oak furniture before transitioning over to a casegood manufacturer. It wasn’t immediately known what led to Solid Comfort’s shutdown.
S&P Global Market Intelligence data illustrates the home furnishings sector’s financial woes, with many companies at risk of defaulting on their loans.
Retail sales information from the U.S. Census Bureau shows that the sector is still hurting amid slow consumer spending. July’s adjusted sales data at furniture and home furnishings stores, reflecting seasonal changes, fell 2 percent from June to $11.04 billion and were down 6 percent from year-ago sales of $11.78 billion