People walk past a Bad Boy furniture store, in Brampton, Ont., on Nov. 13. The company says it intends to file for bankruptcy over debts and challenges obtaining inventory amid higher inflation and interest rates.Christopher Katsarov/The Canadian Press
Bad Boy, the furniture retailer founded by former Toronto mayor Mel Lastman and known for ads promising “nooobody” offered better deals, is facing a financial crisis and plans to restructure the business.
Late last week, Pickering, Ont.-based Bad Boy Furniture Warehouse Ltd. filed a notice of intention to file a proposal under the Bankruptcy and Insolvency Act, writing that the company owes money to many of its vendors. As a result, Bad Boy “is having significant challenges sourcing inventory,” which is affecting the retail business. It also published a notice to customers warning that people who have placed deposits on furniture and appliances will not be receiving their orders, or a refund from the company.
Like other retailers, Bad Boy has seen consumers pull back on spending as they feel the pinch of inflation and high interest rates. The “tight retail climate” has particularly affected the home-furnishing sector, the company wrote in the notice to customers, calling the restructuring a “very difficult decision.”
Bad Boy is wholly owned by a company controlled by Mr. Lastman’s son, Blayne Lastman, who revived the business in the early 1990s. It now has 12 stores in Ontario, as well as a business selling appliances to real estate developers and property managers. Bad Boy has roughly 275 employees.
“The Company is considering a liquidation sale in certain or all of its stores so that it can wind-down the inefficient portions of its business in an orderly manner,” a filing with the Ontario Superior Court of Justice stated.
As of Nov. 4, Bad Boy owed approximately $13.8-million to its unsecured creditors, including major appliance brands such as Whirlpool, Samsung, Electrolux and LG, and furniture suppliers such as Sofa by Fancy and Edgewood Furniture. It also owed $317,382 to RioCan Real Estate Investment Trust, which is the landlord for other Ontario stores in Mississauga, Burlington, Brampton and Kingston.
The company has received approximately $4.5-million in deposits from customers for future deliveries. Bad Boy is advising customers who have not received their orders to contact their credit-card providers for refunds. According to the filing, Bad Boy will complete some orders “if the cost of the merchandise is less than the balance owing.”
The crisis is a turning point for the company, which opened its first store in Toronto nearly 70 years ago. A young Mel Lastman went into business for himself after the furniture store he worked for went under, according to a video made by Bad Boy about its company history. Mr. Lastman opened Heather Hill Appliances in 1954, and changed the name to Bad Boy Appliances the following year.
He became known for brash marketing antics, including handing out money on a downtown Toronto street corner, or handing out free Thanksgiving turkeys (on leashes, still gobbling.)
By the early seventies, Mr. Lastman’s ambitions turned to politics. He was elected mayor of North York in 1973, and after continuing to run Bad Boy during his first three years in office, he sold his 40 stores in 1976.
Mr. Lastman’s son Blayne revived the brand in 1991, betting that he could rebuild the business even during a recession. Blayne and Mel Lastman often appeared in commercials together, reciting the slogan, “Who’s better than Bad Boy? Nooobody!”
After a COVID-19 boom in home improvements led to a spike in furniture sales, the industry as a whole has seen customers pull back, said retail-industry consultant Bruce Winder, and the current economic climate is even more incentive to put off big-ticket purchases. The industry has also seen upfront costs rise since the Canada Border Services Agency imposed new tariffs on some upholstered furniture from China and Vietnam two years ago.
And competition in lower-cost furniture is tighter than ever.
“If you look at companies like Ikea and Wayfair, they have a much greater affinity with younger customers, particularly those on a budget,” Mr. Winder said.
Adding to Bad Boy’s challenges now will be winning back trust with customers, he added.
“It creates a bit of a doom loop, because customers say, ‘Am I really going to buy my fridge, washer, dryer from Bad Boy? Weren’t they in bankruptcy? Who’s going to service it in one or two years?’” Mr. Winder said. “That’s going to stick with them, even if they come through this.”
https://news.google.com/rss/articles/CBMicmh0dHBzOi8vd3d3LnRoZWdsb2JlYW5kbWFpbC5jb20vYnVzaW5lc3MvYXJ0aWNsZS1mdXJuaXR1cmUtcmV0YWlsZXItYmFkLWJveS10by1maWxlLWZvci1iYW5rcnVwdGN5LW92ZXItZmluYW5jaWFsL9IBAA?oc=5
2023-11-13 23:34:37Z
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