The furniture industry is going under very tough times with the economy on a slump. Recently, Furniture Today announced that yet another company has filed for Chapter 11 bankruptcy protection. Said company is Domain Home, manufacturer of living room, dining room, and bedroom furniture among others.
Said company is looking to restructure to get back to profitability. But the company is also looking to liquidate if worse comes to worst. This only the latest on the long string of companies looking to turnaround their performance after it has been affected by the slumping company.
Domain Home was founded in 1985 by its Chief Executive Officer Judy George. It has 27 affiliated retailer stores where its upscale products are being marketed.
The trouble for Domain Home started with its acquisition by Aga Foodservice in 2002. After that said acquisition, Home Domain was made to market Aga's upscale ranges and other similar products. During that time, the co-branding strategy looks to be a good move fore both companies. It turns out though to be not beneficial to Domain Home in the long run.
After Aga had seen that co-branding will not work, it sold Domain in to a consortium led by Synergy Enterprises. Unfortunately, Domain Home continued its downfall. Different reasons have been cited for the further suffering of the company regarding liquidity issues.
One of those reasons is suppliers of the company cutting their terms. Lending institutions like Wells Fargo had reduced the capacity of the company to borrow money. The later means that the company is not able to pursue a turnaround plan as it is lacking funds to carry out such strategies. Another reason is that there has been lesser traffic on major malls where Domain Home had their retail stores.
Gary Nacht, Domain Home chairman, Synergy chairman and Chief Executive Officer also pointed out other reasons for the slump of Domain Home. "At the same time, more macroeconomic forces, such as a severely depressed real estate environment, lack of overall consumer confidence and a forecasted economic recession, continued to erode the company’s sales, margins and working capital," said Nacht in an affidavit.
Nacht also said that the company remains optimistic with their plans of returning to profitability. "The debtors remain cautiously optimistic that with additional needed resources they could reap the benefits of initiatives that have already reduced costs and created a foundation from which a going concern may be preserved," he said.
Also, the company is ready to liquidate their assets if they cannot turn the company around. "At the same time, however, the debtors recognize that it is possible that the interests of their creditors will be best served through a wind down of their business through an orderly liquidation."
The company will be looking to cut costs and produce quality products which consumers would be able to afford. Although the company is yet to report their plan, they may be focusing on their core business which does not include manufacturing garden statues.
Author Resource:-
Chad Isenberg is an antique collector. This 33-year old is based in the Midwest constantly on the road looking for antiques. He is also venturing on his own furniture business. On his free time, he can be found designing new furniture/fixtures.
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