Dallas-based U.S. Assets Inc. and Love’s Furniture Inc. today announced they have acquired the inventory and assets of 27 former Art Van Furniture, Levin Furniture, and Wolf Furniture stores in five states, 17 of which are in Michigan, according to a deal approved by the U.S. Bankruptcy Court.
The stores will open in early June under the new Loves Furniture brand.
“Today’s acquisition of these locations across the Midwest and Mid-Atlantic regions represents a tremendous milestone for our company, our associates, and for the communities that we serve,” says Matthew Damiani, CEO of Loves Furniture. “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.”
U.S. Assets acquired the 27 stores for $6.7 million in cash. The sold locations are among 169 stores in nine states — 92 that operated as furniture showrooms and 77 free-standing Art Van PureSleep outlets — that were closed as part of a bankruptcy. Other company brands included Scott Shuptrine Interiors and Art Van Flooring.
Another 20 stores, half of them in Michigan, are individually-owned franchisees operating under the Art Van banner. The latter stores were not part of the bankruptcy that Art Van Furniture Inc. filed in early March.
The locations that U.S. Assets purchased comprise approximately 23 percent of the 72 Art Van furniture and mattress stores, mostly in Michigan and the Chicago markets, and the 44 Levin and Wolf Furniture stores mostly in Pennsylvania, Maryland, and Ohio.
Founded earlier in 2020 by entrepreneur and investor, Jeff Love, Loves Furniture said it will seek to differentiate the brand through a more personalized shopping experience that puts the customer first.
“Our mission is to provide stylish products, authentic guidance, and an easy experience for our customers as we build comfortable spaces together,” says Love. “We look forward to bringing a brand-new furniture and mattress offering to (the) market very soon. Our excitement to open these 27 locations is only the beginning, as we are already looking at opportunities to grow and expand our new brand with a much larger footprint.”
Loves Furniture will be headquartered in metro Detroit, and Love said it expects to add 1,000-plus new employees across the region, including those workers who recently lost their jobs due to the Art Van Furniture store closings. At a challenging time when many companies are looking to contract, the Loves team sees the acquisition as an opportunity to grow.
“We understand the difficulties facing our communities in the face of the coronavirus pandemic,” says Damiani. “Our leadership team lives in the same cities and towns we serve. 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.
Last month, U.S. Realty posted on Facebook that a furniture chain called Loves Furniture was “coming very soon.”
Art Van Furniture filed for Chapter 11 reorganization bankruptcy on March 9, and the case later moved into a Chapter 7 liquidation.
The company was founded as one store in East Detroit in 1959 by Art Van Elslander. In March 2017, Thomas H. Lee Partners, a Boston-based equity firm, paid Van Elslander $612 million for the Art Van chain. Elslander passed away in February 2018.
A sale leaseback deal following the sale drained the company of cash reserves, while at the same time an exodus of senior leaders, rising competition from online retailers, and the Phase 1 U.S.-China trade deal caused prices of China-sourced furniture prices to rise.
The Michigan locations acquired by U.S. Asset are in Ann Arbor, Battle Creek, Bay City, Burton, Howell, Livonia, Muskegon, Petoskey, Portage, Port Huron, Royal Oak, Saginaw, Shelby Township, Taylor, Warren, Waterford Township, and Westland. The company is utilizing the Royal Oak location along Woodward Avenue as its temporary headquarters and has an initial staff of around 40 people.
Damiani told Furniture Today Loves is forecasting “between $200 million and $300 million in annualized year-one sales from the 27 stores, with plans to ramp further through the acquisition of several more locations.”
The trade publication added: “The inventory doesn’t include merchandise that has been purchased by former Art Van customers, and Damiani said Loves will be working with the trustee in Art Van’s bankruptcy case to handle those items appropriately.”
U.S. Assets Inc. was formed in 2014 to invest in and assist existing and new companies grow. Whether through fresh capital, increased liquidity, or monetization of existing assets, U.S. Assets said it seeks investments with owners and management of value-added companies. The company typically invests in the lower and middle markets with companies generating between $5 million and $50 million EBITDA.
The company considers a wide range of businesses for investment with a preference for “old world” industries with reliable cash flows. This includes retail, light manufacturing, health care services, veterinarian services, and restaurants. Other industries being sought include commercial insurance, wholesale food production, and logistics.
For more information on Loves Furniture locations, products, and services, visit lovesfurniture.com