Heilig-Meyers Co. filed for Chapter 11 bankruptcy protection Wednesday and said it will close 302 stores nationwide, including three in the Augusta area.
The Richmond, Va.-based home furnishings company, which reported a net loss of $15 million for the quarter ending May 31, will close its Broad Street location in Augusta and its stores in Waynesboro and Thomson.
Forty-three local jobs will be lost when the stores close in 30 to 60 days, the company said. Employees were notified early Wednesday.
"There were a series of conference calls to managers to let them know what's going on," Heilig-Meyers spokeswoman Brenda Adrian said.
The company's second Augusta store, at 1694 Gordon Highway, will remain open. All company stores will quit offering in-house financing as part of the reorganization plan. The company will contract with a third party to handle credit transactions.
The company's poorly performing in-store credit program contributed to its lackluster financial situation, said Mike Pierce, spokesman for the National Home Furnishing Association in High Point, N.C.
"It used to be that in-store credit made money," he said. "Today, there are a lot of regulations regarding credit financing."
It's not just big chains that are suffering, he said. Many smaller, family-owned furniture stores throughout the country are having problems with credit sales, aging facilities and weak distribution networks.
In Augusta, Cobern Furniture Co., across from the Heilig-Meyers' Broad Street location, has been advertising a "going out of business" sale. Longtime proprietor Robert Bee did not return repeated phone calls Wednesday.
Heilig-Meyers will seek Bankruptcy Court approval to conduct inventory liquidation sales at the stores that are closing. Company spokesman Barry Brockwell declined to say whether the company has a potential buyer for those stores.
In all, about 4,400 jobs will be cut companywide. The closings leave Heilig-Meyers with 596 stores and about 12,900 employees in 29 states, Mr. Brockwell said.
The company's bankruptcy petition lists assets of $1.35 billion and liabilities of $868 million.
Heilig-Meyers President and Chief Executive Officer Donald S. Shaffer said in a news release Wednesday that the undercapitalized company no longer could compete because of disappointing operating results and an inability to secure alternate financing sources.
In recent weeks, many of Heilig-Meyers' furniture suppliers either stopped shipping products to the company or required the company to pay cash. Mr. Shaffer said he believes manufacturers will work with the company during its reorganization.
Reach Damon Cline at (706) 823-3486.
Store/Location/No. of employees
Augusta/1104 Broad St./17
Thomson/1114 Washington Road/14
Waynesboro/71 Highway 25/12