Furniture store latest closure due to housing slump
February 6th, 2008 Category Furniture, Furniture StoreArt Furniture, which has operated for nearly 14 years at Arizona Avenue and Elliot Road in Chandler, is going out of business, a casualty of the housing slump.
A liquidation sale is under way.
At one time, owner Yalchin Balci was grossing nearly $1.5 million a year. But business began to fall in 2006. The death knell for the company came in November, traditionally the busiest month for furniture retailers, when business was off 70 percent.
The decision to close the business has been painful.
“I built it up on my own,” Balci said. “It’s like watching your 14-year-old son die in front of your eyes. It’s kind of emotional.”
The store is just the latest victim of the slump. Among others that have closed are Eli’s Home Interiors in Gilbert, Granada Furniture Gallery in Chandler, Accent Furniture in Mesa, the Bombay Co. stores and the 97-year-old nationwide Levitz chain.
“I’m talking to my suppliers, and all of them say I’m not the only one having a hard time,” Balci said. “Nobody is buying new furniture. They’re still sitting on an old sofa.”
Times are difficult for furniture retailers nationwide, said Mike Pierce, director of communications for the North Carolina-based National Home Furnishings Association.
“It’s a tough, tough, tough time,” he said. “It’s almost a daily report of some retailer who may be going out of business.”
He blamed the slumping housing market and the fact that running a first-class store is very expensive, including costs for delivery, inventory, customer service, well-trained salespeople and product displays. Having a good location is key, too, he said.
So much furniture being made in China lowers the price, which lowers the profit margin for retailers, he said.
The current situation is the worst he’s seen in the past decade, Pierce said.
Complicating the situation is customers’ wish for instant gratification.
“If I want to buy a sofa at 4 p.m., and the store can’t have it in my home by 8 p.m., sorry, I’ll go next door,” Pierce said.
The financial picture for furniture retailers won’t brighten until the sales of new homes rise again, he said.
“The best prediction on that is the second half of this year, but as we say down South, they may be whistling Dixie over that,” he said.
When business at Art Furniture first began to slow about 18 months ago, Balci expected it to pick up. He was trying to sell the business in March when his lease came up for renewal. He signed a new lease with landlord Michael Pollack.
“November came the red flag,” Balci said. “November is always the king of the 12 months, right before Thanksgiving.”
But not this year.
“I was very unhappily surprised,” said Balci, who added that he can no longer tolerate the financial stress.
At 51, he said he won’t stay retired for long, but he has no idea what he’ll do next.
The store’s going-out-of-business sale has marked items down 70 percent. Store hours will be 10 a.m. to 9 p.m. Monday-Saturday and noon to 6 p.m. Sunday.
