BOSTON – Boston-based asset disposition and advisory firm SB360 Capital Partners has been selected as the exclusive agent for the disposition of finished goods, work-in-process inventory and raw materials for the now defunct Klaussner Furniture.

Klaussner abruptly shut down all operations in August, leaving nearly 900 employees out of a job.

SB360 has extensive experience selling off furniture inventory, having handled dispositions for United Furniture/Lane, Thomasville, Henredon, Drexel, Broyhill, Art Van and Loves Furniture.

“Klaussner’s products are sold by major retailers and furniture dealers across the country,” said Aaron Miller, president of SB360 Capital Partners. “This is an opportunity for those retailers to expand their in-stock Klaussner offering and provide customers with a value proposition that will be meaningful as we head into the holiday season.”

SB360 says it will negotiate sales with Klaussner’s existing customers, as well as other national and regional furniture retailers and wholesale distributors. Interested parties can email info@klaussnerliquidation.com.

Klaussner announced Aug. 7 that it was ceasing operations because its lender would no longer fund the company. Since then, several furniture companies have picked up items formerly owned by Klaussner. Parker House bought the company’s Vietnam office, Canadian foam and fiber manufacturer VPC Group bought a foam plant, and Legacy Classic acquired the Trisha Yearwood license.

See also:

• Did Klaussner violate WARN Act with shutdown? Employee lawsuit says yes
• Here’s how several manufacturers are pivoting to serve Lane and Klaussner buyers

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LOS ANGELES — Z Gallerie, which recently filed for Chapter 11 bankruptcy protection for the third time, has begun marking down its merchandise and closing its stores.

The contemporary furniture and home furnishings retailer engaged B. Riley Retail Solutions as its retail consultant to conduct the closing sales across the company’s 21 stores. All inventory, which includes furniture, lighting, home décor and bedding, is being marked down — starting at 40% — in connection with the event.

The retailer, which is owned by CSC Generation Holdings Inc., and does business as part of DirectBuy Home Improvement Inc., filed for bankruptcy in the U.S. Bankruptcy Court in the District of New Jersey last week. CSC bought DirectBuy/ZGallerie out of bankruptcy in July 2019 for $20.3 million.

The limited-time event covers stores in nine states. Z Gallerie currently has five stores in California; seven in Florida; three in Texas; and one each Atlanta, suburban Chicago, Las Vegas, Maryland, New York and New Jersey.

“This is a unique opportunity to buy high-end, quality home décor at deeply discounted prices,” said Tim Shilling, executive vice president of B. Riley Retail Solutions.

Sales are final, although consumers who purchased Z Gallerie merchandise before Oct. 24 can still make returns with a receipt. The company is honoring Z Gallerie gift cards through Nov. 15.

See also:

• What happens when a company declares bankruptcy in 2023? M&A expert weighs in
• Mitchell Gold Co. files chapter 11 bankruptcy

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ATLANTA — Lease-to-own retailer The Aaron’s Co. reported a decline in net revenues in the third quarter of FY2023, but its loss shrank compared with the same period a year ago.

The Atlanta-based company, which includes Aaron’s and BradsMart, reported revenues of $525.7 million, down 11.4% compared with $593.4 million across the same three months in 2022. Net loss was $4.1 million, or 13 cents per share, vs. a loss of $15.6 million, or 51 cents per share, in the third quarter of 2022.

Officials attributed the 73.5% improvement in net loss primarily to lower total operating expenses at both business segments, including lower write-offs at the Aaron’s Business segment, partially offset by lower revenues at both business segments.

Adjusted EBITDA for the three month period was $25.3 million, giving Aaron’s an EBITDA margin of 4.813%.

“I am pleased that we delivered third quarter consolidated company earnings ahead of our internal expectations,” said CEO Douglas Lindsay said in a statement accompanying the earnings. “The Aaron’s Business segment is benefiting from our lease decisioning enhancements, which led to lower write-offs and a larger than expected lease portfolio size, despite ongoing challenges in customer demand.

“During the quarter, we opened three Aaron’s stores in new markets and our first new BrandsMart store since acquiring the business, and we remain focused on positioning both businesses for growth.”

Aaron’s adjusted its full year outlook to $2.12 billion to $2.17 billion in revenues, down from $2.12 billion to $2.22 billion. It anticipates net earnings in the $14 million to $17.5 million range, down from the $16.8 million to $25.5 million range with a diluted earnings per share expectation of 35 cents to 50 cents per share, down from 55 cents to 80 cents per share.

See also:

• Aaron’s beats earnings expectations for second quarter of 2023
• Which city did Aaron’s pick for 3rd BrandsMart location in Georgia?

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Boosting approval rates and minimizing declines is a top priority for many merchants. After all, it directly impacts revenue and customer satisfaction. But what can retailers do to get more credit approvals? Let’s explore how to enhance your retail financing approval rates by examining the evaluation of credit and risk profiles by lenders, identifying common reasons for declines, and the importance of providing diverse financing options to your customers.

Understanding the Credit and Risk Profile Evaluation

Before we dig into strategies to improve approval rates, it’s crucial to understand how lenders evaluate credit and risk profiles. Lenders use a combination of factors to assess an applicant’s creditworthiness, including credit scores, income, employment history, and debt-to-income ratio. A higher credit score and stable financial history typically translate to a better chance of approval.

But what can you do when a primary declines an application? This is where secondary financing, such as Concora Credit, can play a pivotal role. By partnering with a reputable secondary financing provider, merchants can offer financing options to a wider range of customers, including those with less-than-perfect credit scores.

Common Reasons for Declines

To boost approval rates, identifying and addressing common reasons for merchant financing declines is essential. Here are some of the most prevalent issues:

1. Low Credit Scores: One of the primary reasons for financing declines is low credit scores. Many customers, especially younger ones, may not have established credit histories, leading to automatic declines.

2. Insufficient Income: Lenders often require applicants to meet minimum income thresholds. If a customer’s income falls below these requirements, their application will likely decline.

3. High Debt-to-Income Ratio: A high level of existing debt relative to income can signal increased risk to lenders. Customers with excessive debt may face financing declines.

4. Incomplete or Inaccurate Information: Simple application process errors, such as incorrect information or missing details, can lead to a decline.

5.Industry-Related Risk: Some industries are perceived as riskier by lenders. If your business falls into a high-risk category, securing financing for your customers may be more challenging.

Strategies to Boost Approval Rates

Now that we’ve identified common reasons for declines, let’s explore strategies to boost your approval rates effectively:

1. Offer a Range of Financing Options: One of the most effective ways to increase approval rates is by providing various financing options. This allows you to cater to a broader customer base, including those with lower credit scores.

2. Partner with a Secondary Financing Provider: Collaborating with a trusted secondary financing provider like Concora Credit can significantly enhance your approval rates. Secondary financing specializes in offering solutions for customers with diverse credit profiles, expanding your approval capabilities.

3. Streamline the Application Process: Simplify and streamline your financing application process. Ensure it is user-friendly and straightforward, reducing the chances of errors or incomplete submissions.

4. Educate Your Staff: Train your staff to effectively communicate the financing options available to customers. Knowledgeable staff can increase the likelihood of customers deciding to apply for credit.

5. Implement Risk Mitigation Strategies: Work with financing providers to develop risk mitigation strategies tailored to your business. These strategies can help minimize the perceived risk associated with your industry.

Wrap Up

Boosting approval rates and minimizing declines in consumer financing is a critical objective for businesses seeking to grow and thrive. By understanding the evaluation process of credit and risk profiles, addressing common reasons for declines, and implementing effective strategies, you can increase your approval rates and provide valuable financing options to a broader customer base.

At Concora Credit, we specialize in secondary financing solutions that empower merchants to offer financing to a wider range of customers. Partnering with Concora Credit can be a pivotal step toward achieving your approval rate goals. Remember, a well-rounded approach to financing and a commitment to customer satisfaction can lead to higher revenue and long-term success in consumer financing.

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Concora Credit is a service provider that works with third-party lending institutions to provide lending solutions for merchants. This article is for informational purposes only. To make sure that any information or suggestions in this blog fit your particular circumstances, you should consult with a financial professional before acting on any suggestions or information that we provide.

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MERRILLVILLE, Ind. — Z Gallerie, the Los Angeles-based contemporary furniture retailer, has filed for Chapter 11, citing liabilities between $50 million and $100 million.

The retailer, which is owned by CSC Generation Holdings Inc. and does business as part of DirectBuy Home Improvement Inc., filed for protection in the U.S. Bankruptcy Court in the District of New Jersey. According to the filing, which was reported on Bankruptcycompanynews.com, ZGallerie has 21 locations in nine states.

CSC bought DirectBuy/Z Gallerie out of bankruptcy in July 2019 for $20.3 million.

In the filing, according to the report, Robert Fetterman, chief financial officer and interim CEO, said the debtor planned to retain Stump & Co. as its investment banker to market the debtor’s assets.

“Additionally, the debtor also intends to file a motion proposing an efficient, public and flexible auction process in connection with its sales efforts. If the debtor is unable to implement a going-concern transaction, the debtor will turn to an orderly liquidation of its remaining assets, close its stores in the coming months.

“In addition to marketing a going concern transaction, the debtor will also be simultaneously initiating ‘soft’ sales in its retail locations to monetize its inventory.”

Fetterman’s declaration stated that the company’s problems stemmed from “severe liquidity constraints brought on by a confluence of underperforming retail stores, adverse macroeconomic trends and industry specific headwinds,” including the impact of COVID-19, supply chain issues that impacted profitability and economic conditions such as higher interest rates, inflationary pressure and mortgage rates that impacting the housing market.

The filing noted that Z Gallerie is getting up $1.1 million of no-interest, debtor-in-possession financing through ZG Lending SPV LLC, which is a CSC affiliate.

See also: DirectBuy acquires Z Gallerie

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NEW YORK – A hedge is aiming to make changes at Overstock.com, and it is warning in a public filing that it may come after some seats on the board of directors.

JAT Capital Management, which owns a 9.1% stake in the company, publicized its suggestions for Overstock in a regulartory filing with SEC yesterday afternoon.

The hedge fund reported that it had previously shared the advice with Overstock’s board in an Oct. 12 letter.

Among its recommendations:

• Marcus Lemonis – the celebrity “turnaround king” who joined Overstock’s board earlier this month – should be given an elevated position. “Executive chairman as [sic] a preferred option,” the filing noted.
• Overstock’s board should develop a business plan outlining financial objectives for the next one-month, three-month, 12-month and 36-month periods and communicate progress toward those goals regularly with investors.
• The company should overhaul its management and board compensation structure to reduce or eliminate cash compensation and to emphasize stock option participation.
• The CEO role should be offered a meaningful option package at strike prices meaningfully above current market price to align interests with shareholders.
• The company should immediately begin a strategic review of its non-core assets, particularly its Medici subsidiary, with an eye to a potential sale or spin-off.

“JAT is not traditionally an activist investor, but its filing signaled mounting frustration with the company and left open the option of pursuing strategies like running a proxy contest,” Reuters noted in its report on the JAT filing.

Thus far, Overstock.com has not issued a public reply or responded with an SEC filing of its own.

The company, which completed the acquisition of the Bed Bath & Beyond brand and its intellectual property on June 28, is scheduled to reports its third quarter results on Oct. 26.

For the first six months of the current fiscal year, ended June 30, net revenue fell 25% to $803 million. The company reported an operating loss of $12.6 million and a net loss of $83.8 million. Overstock relaunched the Bed Bath & Beyond brand on Aug. 1.

See also:

• The ‘new Bed Bath & Beyond’ top line is doing better, but …
• Overstock weathers another tough quarter as is preps for BBB relaunch

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NEW YORK — Consumers are intent on making this a merry holiday by spending more despite their acknowledgement that prices are rising and inflation is having an impact. However, the home category will be challenged to get its share of that windfall.

The 2023 Deloitte Holiday Retail Survey finds the average spend for the holidays will be $1,652, which represents a 14% year-over-year increase, or a more modest 2.5% when compounded annually over four years. Nearly all consumers surveyed plan to take part in the season (95%), which is up from 92% last and 88% in 2021, reflecting a return to pre-pandemic levels.

When asked which holiday categories were the tops for gifting this year, gift cards took over the No. 1 spot, edging out clothing and accessories. Home and kitchen, meanwhile, dropped to the bottom of the list, replaced by health and wellness-related presents.

Where home does have some momentum is in the non-gift sector, which accounts for $466, or about 28%, of the anticipated $1,652 total. From that total, consumers are also allocating $554, or about 34% to gifts, with the remainder going toward experiences such as entertaining at home and frequenting restaurants or events.

Of the 82% who plan to shop for non-gift items, 59% will be spending some of that money on home furnishings and holiday decorations, according to Deloitte’s survey. While the average spend on non-gift is $466, it rises among those with incomes of $100,000 to $199,000 to $600 and jumps to $1,001 for consumers in the $200,000-plus income bracket.

In fact, high-income individuals are planning to spend far above the $1,652 average this year, with $100,000 to $199,000 earners setting aside $2,167 for holiday purchases, and the $200,000-plus crowd earmarking nearly $4,000.

Home furnishings could also attract those who plan to buy gifts for themselves, which could be as high as 75% of those surveyed. Practical/useful gifts are desired by 51% of self-gifters, while comforting/relaxing ones (39%) and long-lasting use items (39%) are also highly rated.

Nearly three-fourths of consumers are anticipating higher prices across the board this year, but the biggest increases are expected in food and beverage (86%). The survey found 72% of consumers expect home and kitchen prices to be higher as well.

And despite the efforts to spur earlier shopping, two-thirds of holiday shoppers plan to do so during Thanksgiving week vs. 49% in 2022, most likely lured by the Black Friday/Cyber Monday deals.

The Deloitte survey, which was fielded between Aug. 30 and Sept. 8, polled 4,330 consumers. It also surveyed 43 retail executives between June 23 and 30.

See also:

• Small businesses plan big: It’s deals and A.I. this holiday season
• Home Depot gets ahead of the holidays with online décor sale

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DELFT, The Netherlands — Affordability is the watchword for Ikea’s global operations as the company doubles down on efforts to keep prices in line for its shoppers, as outlined in its fiscal year-end report.

“Intensification of internal efforts to reduce material and manufacturing costs led to a decrease in Ikea retail prices at the end of FY23,” said Jon Abrahamsson Ring, CEO of Inter Ikea Group. “In challenging times when inflation is high and many people struggle with the cost of living, the need for home furnishings solutions at affordable prices is high.

“This where we will continue to do what Ikea has always done: putting customers’ affordability first. Looking further ahead, the three main opportunities we see for Ikea are to become even more affordable, more accessible and more sustainable,” said Ring.

Inter Ikea Group, which handles retail concepts, products and supply for the worldwide Ikea franchise, recorded a 6.6% increase in retail sales for its fiscal year ended Aug. 31 based on total sales of EUR 47.6 billion for fiscal 2023 vs. EUR 44.6 billion for the 2022. Total sales include products, food and services sold by the 12 Ikea franchisees worldwide.

The company said that during the fiscal year product availability improved because of closer collaboration with partners across its supply chain to solve logistical constraints, such as those experienced during the pandemic-related supply chain shortages.

Among the achievements Inter Ikea Group cited were its 71 new stores, including many small format or plan-and-order points. Small stores were added in Copenhagen, Madrid, Rome, San Francisco and Toronto, among other locations. It also entered two new markets: South America, with a store in Colombia, and a first-ever site in New Zealand.

Store visitors rose during the year to 860 million, up from 822 million in fiscal 2022. Online visitors, while fewer than in past years (3.8 billion compared with 4.3 billion), accounted for 23% of sales vs. 22% the previous year.

Fiscal 2023 marked Ikea’s 80th anniversary, which was celebrated by rediscovering some favorite designs and reimagining them with new colors, materials and production techniques.

Ikea’s U.S. operations achieved more than $5.9 billion in sales in fiscal 2022, including $3.99 billion in furniture, bedding and accessories, to rank it No. 3 in the Furniture Today Top 100.

See also:

• Ikea befouls its own furniture in controversial Norway TV ads
• 2 things Ikea is doing to promote sustainability

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ASHEBORO, N.C. — According to several local news reports, a Canadian foam and fiber manufacturer, VPC Group, has bought a foam plant and fabrication plant that were operated by Klaussner Furniture Inds. before it closed on Aug. 7.

Both plants are located in Randolph County, N.C., and the new owner intends to rehire former employees, according to court records.

According to WFMY News 2, court documents show that VPC has paid “a substantial deposit, including a non-refundable portion.” Yahoo Finance reported that the deal to buy Prestige Fabricators for $7 million has been approved in N.C. Business Court.

Prestige produced foam materials for upholstery and is reported to have employed about 50 people at the two plants.

See also:

• Parker House buys Klaussner’s former Vietnam office
• EJ Victor taps former Klaussner exec to lead sales
• Liberty names Ashley, Klaussner veteran as new vice president of sales

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LEXINGTON, Ky. – Tempur Sealy International has refinanced its credit lines with 13 different lenders that includes a $1.15 billion revolving credit facility, a $500 million term loan facility and an incremental facility that allows up to $850 million and additional amounts.

Scheduled to mature in five years on Oct. 10, 2028, the new credit agreement refinances the company’s existing credit lines dated Oct. 16, 2019, administered through JPMorgan Chase Bank.

“We are very pleased with the refinancing of our credit facilities,” said Scott Thompson, chairman and CEO. “With this refinancing, we have meaningfully extended our debt maturities, improved our financial flexibility and increased our potential total senior credit funding while maintaining our current cost of funds in what is clearly a tight commercial banking market.”

In addition to Bank of America, the other lenders are JPMorgan Chase Bank; Wells Fargo Bank; Sumitomo Mitsui Banking Corp.; Truist Bank; HSBC Bank in the U.K. and the U.S.; the Bank of Nova Scotia; TD Bank; Mizuho Bank; Fifth Third Bank; Goldman Sachs Bank; Capital One National Assn.; and Pinnacle Bank.

“We appreciate the strong support from the 13 market-leading lenders who participated in the financing of these facilities,” Thompson said. “The transaction was substantially over-subscribed, evidencing support for our strategic vision.”

In its most recent earnings results, the company reported net sales of $1.27 million  and net income of $92.4 million for the second quarter.

The company has agreed to acquire Mattress Firm, its largest retail customer, in a $4 billion deal expected to close next year.

See also:

• Tempur Sealy makes it official: Celebrates new factory opening in this state
• Tempur Sealy sees these 6 benefits to $4 billion Mattress Firm deal

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