New York’s ABC Carpet & Home Prepares To File for Bankruptcy
(Bloomberg) -- New York luxury furniture purveyor ABC Carpet & Home plans to file for bankruptcy protection as soon as Thursday and warned employees of impending layoffs after struggling to keep up with costs amid the Covid-19 pandemic, according to a person with knowledge of the plans.
The luxury furniture retailer known for $6,000 sofas and rugs that run as much as $70,000, is set to receive a debtor-in-possession loan from 888 Capital Partners as part of its bankruptcy filing, said the person, who asked not to be named discussing private plans and said the investment firm is one of several potential buyers for the company in bankruptcy.
The ultimate buyer will determine the scope of potential layoffs, but WARN notices went out to company employees this week, the person said. New York requires employers with more than 100 workers to give 60 days’ notice before cutting more than 50 employees under the state’s Worker Adjustment and Retraining Notification Act.
ABC Carpet & Home has been working with advisers from B. Riley Financial Inc. and Greenberg Traurig to seek new financing or a buyer after a planned private-equity sale fell through, Bloomberg previously reported.
In a statement to Bloomberg, Chief Executive Officer Aaron Rose said the business would continue to operate as usual.
“ABC Carpet & Home is in advanced discussions with a strategic investor who has provided funding for the company’s operations and is developing a long-term financial plan that will continue the company’s iconic legacy,” Rose said. “Business is operating as usual during this process.”
ABC Kitchen, the popular Jean-Georges Vongerichten restaurant located in the same building, is separately owned and won’t be part of the filing, the person said.
ABC lost revenue when many of the affluent locals who made up the core of its business fled New York during the pandemic. For those who remained, a prolonged renovation of its store near Union Square made access difficult.
Since the company didn’t have a robust online business, it lost out on the shift to e-commerce that accelerated during the pandemic.
The company traces its roots to the late 1800s, when Austrian immigrant Samuel Weinrib started the business from a pushcart on Manhattan’s Lower East Side. His great-granddaughter Paulette Cole helped build its red-brick building on Broadway into the high-end destination for designers and decorators and their affluent clients.
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