Texas Bankruptcy Lawyer

Carls Furniture declares Chapter 11 bankruptcy, will close Kendall store

Devastated by the housing crash, Carls Furniture wants bankruptcy protection and could close both Miami-Dade locations.

The upscale furniture chain, based in Coconut Creek, will close its Boca Raton store and the one at 7501 SW 100th St. in Kendall in the next 90 days, according to a company statement. A Carls bankruptcy lawyer also said Wednesday that a store in North Miami-Dade would probably close too unless its landlord agrees to lower rent.

In its statement, Carls said it will honor deposits that customers paid for future furniture purchases.

In announcing its Chapter 11 bankruptcy filing, Carls portrayed the move as a chance to start again after a devastating several years for the furniture industry. Hammered by a crash in home sales and values, furniture stores across the country struggled to keep their doors open.

The various corporate entities involved in the Carls filings reported $26 million in sales in 2009 and $19 million in 2010 —a 30 percent drop in 12 months. It was unclear how many stores’ sales contributed to those numbers.

Carls said lenders are willing to fund operations during bankruptcy, provided the furniture chain can win rent concessions.

While some of the seven Carls stores rent space owned by the chairman of the family-run company, Myron Baker, Carls also rents its North Dade location at 1400 NW 167th St. from Continental Equities, an independent landlord.

Carls stopped paying rent there while negotiating for better terms, but the failed talks helped lead to this week’s bankruptcy filing, said Carls lawyer Robert Furr.

“The lease is in serious default,’’ Furr said. He added that Carls expects the store to close this summer if a deal isn’t reached.

Once it emerges from bankruptcy, Carls expects to “have more furniture in stock and service our customers’’ better, the statement said.

While all of South Florida’s furniture retailers have had difficult years during the recession, Carls’ struggles have been among the more dramatic. The higher-end segment of the furniture market took the biggest beating as the improvement in the quality of affordable Asian imports made it harder for them to compete.

Carls isn’t the first high-end South Florida furniture retailer to seek bankruptcy protection this year. In March, Fort Myers-based high-end furniture retailer Robb & Stucky was sold to a liquidator after it filed for Chapter 11 protection a month earlier. Robb & Stucky had roughly 20 stores in Florida, Texas, Arizona and Nevada, including two in Boca Raton’s Mizner Park and one in Palm Beach Gardens.

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