RoomStore Files for Chapter 11 Bankruptcy
The furniture retailer plans to reorganize, uncertain if it will close certain locations
RoomStore, which has a store in Annandale, filed for Chapter 11 bankruptcy protection on Monday, claiming that it needs time to “reorganize.”
According to the Washington Business Journal, the discount furniture retailer said in its regulatory filing, “The company believes it has developed a plan that will enable it to reorganize around a core base of stores. ... The reorganization of the company is expected to result in the closing of a significant number of stores and reductions in staffing and overhead expenses.”
The Associated Press said the retailer “reported a net loss of $7.7 million for the first six months of the fiscal year compared with a loss of $2.4 million in the same period in 2010.”
No store closures have been announced yet, but in contrast to various reports, President and Executive Officer Stephen Giordano did not mention plans to close any locations in a letter addressed to customers on the RoomStore website.
“This filing will give us the time and resources to address our financial challenges while continuing to provide you, our Customer, with the excellent values in home furnishing products and the exceptional service that you have come to expect from the RoomStore… It is important for you to understand that the RoomStore is not going out of business. Our stores are operating as normal, and we look forward to continuing to take care of your furniture shopping needs.” the letter states.
The Wall Street Journal reports that the company previously filed for Chapter 11 bankruptcy with its former parent company Heilig-Meyers in 2000.
There are a total of 66 RoomStore locations in eight states. Twelve of those stores are in Virginia.