27 former Art Van stores bought by new Royal Oak-based company
May 2020 | By Jameson Cook@mdianewsgroup.com | The Macomb Daily
Loves Furniture, a newly formed Royal Oak-based company, has purchased the assets of 27 Art Van stores and will reopen under the new company name in Michigan and five other states.
Loves, owned by a private equity firm, US Assets Inc. in Dallas, will purchase the inventory for $6.9 million and expects to add more than 1,000 employees, in many instances looking to rehire Art Van workers who recently lost their jobs due to store closings.
"At a challenging time when many companies are looking to contract, the Loves team sees this as an opportunity to grow," the company said in a news release.
Matthew Damiani, CEO of Loves Furniture, called the deal "a tremendous milestone for our company, our associates, and for the communities that we serve."
"We are thrilled to announce an exciting new retail option for customers in these markets who have been looking for a more modern shopping experience," he said in the release. Art Van's former owner, Thomas H. Lee Partners, announced March 5 it would be closing stores May 5 following a liquidation sale. It filed for bankruptcy March 8. But the stores shut down suddenly March 19 shortly after the COVID-19 pandemic hit, taking employees and customers off-guard. Art Van employed about 4,500 people nationwide.
The stores that were purchased formerly operated under the Art Van Furniture, Levin Furniture and Wolf Furniture brands. The stores that will reopen represent 20 percent of Art Van's former inventory, according to bankruptcy court records. Most of the stores set to reopen are located in Michigan, including seven in metro-Detroit: Warren, Shelby Township, Royal Oak, Waterford, Westland, Livonia and Taylor. Other stores are located in Pennsylvania, Ohio, Illinois, Virginia, and Maryland.
Chapter Seven Bankruptcy Trustee Alfred Giuliano wrote May 4 in support of the deal, pointing out that landlords of former Art Van buildings have agreed to waive a total of $5.4 million in rent for the approximate two-month time period when the stores were closed.
The deal "represents the highest and best value achievable for the Purchased Assets under present circumstances and is a sound exercise of my business judgment as the chapter 7 trustee for several reasons," Giuliano said.
He adds the coronavirus pandemic negatively impacted a potential public sale as an option.
"I do not believe that a public sale process would achieve a better result in light of the inability to conduct any going out of business sales at this time due to the COVID-19 pandemic and the costs and time associated with a bid and auction process," he wrote.
Giuliano also noted the company vowing to rehire former Art Van employees as a positive factor.
Loves also agreed to take reasonable measures to get merchandise already purchased by customers and sitting in a warehouse to be delivered to customers.
Damiani, the CEO, commented on the economic impact of COVID-19 on communities.
"Our leadership team lives in the same cities and towns we serve," he said. "For us, it is a point of pride and hope that we have this opportunity to help put many of our talented neighbors back to work. We want to get up and running quickly."
To expedite the local hiring efforts, the company said it plans to conduct a "soft launch" of stores in the coming weeks and is actively exploring options to provide customers with discounted services and special product buys leading up to the official grand opening.
"Our vision is to create a world where all homes are filled with happiness, hope, and love," Damiani said. "That starts here with this initial investment, which we plan to grow in the years to come."
Loves Furniture's web site leads with the slogan, "Love where you live." It says it will provide products in "living, bedroom, dining, mattresses, baby & kids, decor outdoor and more," adding: "Coming very soon!"
U.S. Assets Inc. was formed in 2014 to invest in and assist existing and new companies grow through fresh capital, increased liquidity or monetization of existing assets. The company says it typically invests in the lower and middle markets with companies generating between $5 million and $50 million EBITDA (earnings before interest, taxes, depreciation and amortization).
Warren-based Art Van was founded in 1959 by Art Van Elslander, who died in 2018.
