CERTIFIED PUBLIC ACCOUNTANTS
 
FRAUD EXAMINERS  
 
RESTRUCTURING ADVISORS

 

News

Robert Levin Makes 2nd Bid to Revive Family Furniture Business

May 2020 | Deb Erdley | Trib Living

Almost two months to the day after his deal fell through to repurchase the family-owned furniture chain he sold to Art Van Furniture in 2017, Levin has negotiated a deal in bankruptcy court to buy back the Levin brand.

His $25.7 million bid includes a $10 million fund that will be set aside to make whole more than 1,000 customers in Ohio and Pennsylvania who paid for or made deposits on furniture that Art Van's owners never delivered.

Alfred T. Giuliano, the trustee overseeing the Chapter 7 liquidation proceedings in federal bankruptcy court in Delaware, called Levin's gesture to customers left out in the cold when Art Van filed for bankruptcy "very uncommon."

"I think it's a very nice gesture," Giuliano said.

In a motion filed Monday, Giuliano recommended the court approve the sale.

Levin said he is partnering with the Schultz family of Erie - the licensee for three Ashley Furniture stores in Western Pennsylvania - in the deal that calls for the purchase of the inventory of 32 Levin's stores. Levin will be board chairman of the new company, while John Schultz and Matt Schultz will be co-CEOs.

"The Schultz family has been in the furniture business for 80 years and operates stores in Pennsylvania and Ohio. Their family shares the same values as Levin's in putting customers first," Levin said.

He said his attorneys expect the deal to close in the next week and a half.

Levin plans to rebuild the family furniture empire his grandfather Sam Levin founded in Mt. Pleasant in 1920, with an emphasis on restoring its reputation for customer service. Plans call for select Levin Mattress and Levin Furniture stores to resume business. Several locations are expected to open this summer, Levin said.

He isn't saying which locations will open first, but the flagship Mt. Pleasant store and others in McMurray and Robinson won't be among them. They are among 27 Levin, Wolf and Art Van locations that a Texas private equity firm scooped up in bankruptcy with plans to reopen as Love's Furniture.

Levin, the 63-year-old Mt. Pleasant native, sold the family chain - at the time the largest player in the local retail furniture market - to Art Van Furniture in 2017. The sale closed shortly after Art Van, a Michigan-based family-owned furniture chain, was acquired by Thomas H. Lee Partners, a Boston-based private equity firm.

The combined furniture empire that stretched from Michigan through Pennsylvania reported sales of $850 million in 2018. But it was foundering under a heavy load of debt by early 2020 when Levin stepped back into the picture.

"When I sold the business, I sold it to a billion-dollar company that was doing well," Levin said. "It was devastating being on the outside, seeing what was happening with Levin's."

On March 5, he announced he had negotiated a deal to buy back about three dozen Levin and Wolf furniture outlets.

Less than a week later, Art Van filed for protection to reorganize under Chapter 11 bankruptcy. Levin's deal collapsed about two weeks later when retail outlets across the region were shuttered and Art Van converted its filing to a Chapter 7 liquidation.

Vowing to continue to try to craft a deal, Levin promised to set up a $2 million fund to assist former Levin's employees who lost their jobs and health insurance. Last month, he made good on that promise and began sending out checks for $1,500 to the former employees who worked for him three years earlier.

Levin's new deal calls for $10 million to be deposited with the bankruptcy trustee and held in a special customer claims account. Customers who made deposits or paid for furniture they did not receive will be notified of the claims process.

"This money was taken by the previous owners. But from a reputational standpoint, I felt a responsibility to make customers - who otherwise would have been left with a bad taste in their mouth - whole," Levin said.

Schedule a Consultation

All of GMCO’s members, managers, and staff discover innovative solutions to direct your business toward success.

learn