Chicagoland retailer to conduct GOB sale

Clint Engel -- Furniture Today, June 9, 2006

HOMEWOOD, ILL. — Bay Furniture, which has been searching for a going-concern buyer while running a cash-raising sale, appears to be calling it quits instead.

A trustee for the Chicagoland retailer, which was co-owned by brothers Rick and Larry Slovy and their father, Barry Slovy, is running a going-out-of-business sale, according to news reports. It is selling Bay’s assets, including the home office location and the remaining inventory at its six stores in Illinois and Indiana.

Earlier this year, shareholders and directors of the struggling Bay brought in management advisory firm Rally Capital Services of Chicago to lead the company. Rally then hired liquidator Great American to run cash-raising sales.

Bay conveyed all its assets to Rally co-founder Howard Samuels as assignee/trustee for the purpose of liquidating them for the best price. There were no plans to file for bankruptcy protection, Larry Slovy said.

In an April e-mail to Furniture/Today, Samuels said that if the cash raising sale "does not achieve the intended objective of finding a going-concern buyer,” he intend to conduct a GOB through Great American.

Great American President Jeff Yellen could not be reached immediately for comment. Rally referred questions to associate Abby Samuels, who did not call back.

In April, Larry Slovy said Bay had gotten in "a little over our heads,” and that business conditions were tough. Samuels had referred to a "demonstrative change of customer preferences for design and service” as among Bay’s problems in the email. Sales were declining and there had been operating losses for more than two years, he said.

Local news report said Bay reported assets of about $11.2 million and debts of about $14.4 million in an April letter to creditors. General and unsecured creditors were owed $6.78 million, and it was unclear what their recovery would be.

Bay, a former Top 100 company, had estimate furniture, bedding and accessories sales of $63.2 million in 2004.