Heilig-Meyers closing remaining Vegas-area stores

Grace Leong

Wednesday, April 11, 2001 | 10:55 a.m.

Bankrupt Heilig-Meyers of Richmond, Va., today said it will pull out of the Las Vegas market by closing its three remaining local furniture stores and will lay off a total of local 30 workers by late August.

The furniture store in February closed its North Las Vegas outlet at 2021 Civic Center Drive and laid off 20 local workers as part of a nationwide restructuring plan.

The three other stores closing are on north Rancho Drive, south Nellis Boulevard and south Boulder Highway.

Heilig-Meyers, which filed for Chapter 11 bankruptcy in Richmond on Aug. 16, has since closed some 416 underperforming furniture stores nationwide. Today it announced plans to close its remaining 375 stores and focus on its 54 "RoomStore" operations, which it says, are "still successful." The company has no RoomStore operations in Las Vegas.

Under the RoomStore format, customers may purchase entire rooms of furniture, complete with accessories and decor items.

President and Chief Executive Officer Donald S. Shaffer said: "Despite our significant progress, we determined that based on the slowing of the economy and considerable weakening of the retail market, a successful reorganization of the traditional Heilig-Meyers furniture stores could not be completed within a timeframe that would allow us to fulfill our fiduciary responsibility to our creditors and other stakeholders."

Brenda Adrian, Heilig-Meyers' spokeswoman, said liquidation sales will be held in Las Vegas and workers will continue to work through the closing sales.

"After extensive review of our operations, in what has proved to be an extremely challenging retail environment, it was determined that our roomstore format should be the centerpiece of our ongoing reorganization efforts," Shaffer said.

Shaffer said the 54 traditional RoomStores are concentrated in metropolitan markets in Texas, Maryland and Washington D.C. and generate annual revenues of approximately $300 million. There are no plans to open RoomStore operations in Las Vegas.

Shaffer said that since the filing, the company completed various strategic initiatives at the Heilig-Meyers stores aimed at reducing working capital requirements and improving cash flow, including the closing of underperforming stores and the outsourcing of its customer credit operations.

"The reason for the Chapter 11 filing was largely because Heilig-Meyers' inhouse credit program didn't work," Adrian said. "We've since outsourced that credit operation but sales are still not improving."

Shaffer said the company is also involved in discussions with various interested parties for the sale of its three high-end furniture Homemakers stores in Chicago area.

He said that 16 traditional Heilig-Meyers stores were converted to RoomStores since the filing, and the company is studying the conversion of 12 more stores in North Carolina and Virginia. The company plans to maintain its regional offices in Dallas and Landover, Md., to support RoomStore operations in those two markets.