HIGH POINT — While many had heard rumors, the announcement on Aug. 7 of Klaussner’s shut down was an industrywide shock.
The Asheboro, N.C.-based maker of case goods, upholstery and mattresses closed its doors and had the following message on its website: “Klaussner’s lending source has unexpectedly refused to continue to fund the Company’s operations. This outcome was not reasonably foreseeable, but due to these unexpected circumstances, Klaussner can no longer sustain its operations. As a result, Klaussner has made the difficult decision to permanently cease operations and is providing as much notice as possible.”
Our sister publication Furniture Today asked retailers who carry Klaussner to share their thoughts about the company’s ceasing of business. Here’s how they responded.
Oscar Miskelly, Miskelly Furniture, Pearl, Miss.
“It’d been rumored for a while but it’s not real until it is! Maybe Hans Klaussner, if he’s still around, can step in. It was Ashley before Ashley in terms of value and style back when you went to Asheboro to shop them. Still had great looks and values. It’s a big loss for the industry. Another black eye for the industry and especially painful to the 1,000 employees.”
Robert Van Hoose, Big Sandy Superstore, Franklin Furnace, Ohio
“There are not that many custom order options out there as it is at a decent value. Klaussner will be missed and create an opportunity for somebody. It will be interesting to see if anyone aggressively pursues that business. For us, a good value, with 30-day shipping, and maybe 6-8 fabric options could work well, and we will be shopping the market.”
Michael Fiacco, Old Brick Furniture & Mattress, Albany, N.Y.
“This unreal to say the least. It’s a classic case here in my opinion. It extremely annoying but we will get through it fine. Klaussner had some of the best people in the industry working there and over the last five years they have managed to run off 98% of them so in hindsight we should have known better on our end. You can’t gut a company of their best people and leverage it to the hills and expect any other outcome. I just feel awful for the factory workers, reps and people that have been there from the beginning.
“It hurts in the short term as we have a ton of orders sold. With that said, we stay diversified for a reason, and it certainly helps in times like this.
“We heard rumblings this spring and asked Klaussner about them and then again on Friday I heard it was over. I think in times like today as retailers and manufacturers alike you best align yourselves with credit quality partners who understand our business. It’s going to get tougher before it gets better.”
Adam Hudson, Hudson’s Furniture, Sanford, Fla.
“I was also shocked to get the news on Furniture Today of the Klaussner closure. I am curious to know how this came about. I understand the lending source pulled out, but that is the result of bad management and not the fault of the lending source. Every bank loan has covenants written into the loan, and a company of this size certainly had a CFO that made them very aware of when they were close to breaking a covenant. So, to say the lending source pulled out would be evident based on them knowingly breaking covenants, not having a plan, or not communicating effectively with the lending source to support their way back into not breaching the covenants. It is a shame that this happened overnight for furniture retailers, but most importantly, the men and women who called Klaussner home and supported their families and livelihoods. This is sad for them, and I hope they all find good homes soon.”
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This story will be updated as more retailers respond. Share your thoughts with me at tlester@furnituretoday.com.
