Friday, Nov. 9, 2001 | 11:02 a.m.
Home furnishings retailer House2Home Inc., which filed Chapter 11 bankruptcy in Santa Ana, Calif., on Wednesday, said it plans to close its two Las Vegas-area stores and lay off some 240 Las Vegas workers.
Analysts say other retailers will likely soon occupy House2Home's retail locations in the fast-growing Las Vegas area.
The Irvine, Calif.-based company, which was already suffering before the Sept. 11 terrorist attacks due to a slow retail market, said it was forced into bankruptcy after a "dramatic and sustained drop in sales (following the attacks) put an extraordinary strain on cash flow, from which (the company) couldn't recover."
Linda Press, House2Home's spokeswoman, said the company's sales in the immediate aftermath of the attacks plunged 25 percent to 30 percent from earlier in the third-quarter ended Oct. 27. Third-quarter sales, scheduled to be announced mid- to late November, are expected to total about $119 million, down from $144.8 million in the second quarter ended July 28.
The two House2Homes at 2260 South Rainbow Boulevard in Las Vegas and 570 North Stephanie Street in Henderson are to be closed in three to four months as part of a planned liquidation of its 42 stores nationwide.
Some real estate analysts suggest retailers like Kohl's Corp., a Menomonee Falls, Wisc.-based department store chain that's planning to enter the Nevada market in 2003, may consider the two locations for its stores.
The analysts say the Stephanie Street store is in a much better retail area than the Rainbow Boulevard store.
That's because the Stephanie corridor is growing faster and because of its proximity to the Galleria at Sunset mall, Sunset Station hotel-casino and other big-box retailers including a Wal-Mart Supercenter, Costco, Best Buy and Home Depot.
"The Stephanie Street area is changing. That retail area serves Green Valley and gets great traffic because it is close to Interstates 95 and 215. There's a lot of good synergy because there's a lot of big-box retailers there," said Scot Marker, a retail analyst at Colliers International.
David Grant, another Colliers' retail analyst, said it's also possible that the landlord of the Stephanie Street store may subdivide the 90,000-95,000 square foot space "into two or three boxes instead of renting out a big box because there aren't many 90,000-95,000 square foot retailers out there."
"The Rainbow Boulevard stretch from Sahara to Charleston (Boulevard) is a very good furniture-type area. All the furniture stores like Ethan Allen, La-Z-Boy did well there," he said. "But House2Home wasn't a pure furniture store, it had a bit of everything. If you wanted, say, a barbeque you'd go to Barbeques Galore or Lowe's, rather than House2Home."
In its bankruptcy filing, House2Home listed debts of about $193 million and total assets of about $181 million.
Trading in the company's stock has been suspended because of its bankruptcy filing and because its shares have had an average closing price of less than $1 per share for more than 30 consecutive days.
House2Home was formerly home improvement giant HomeBase Inc., which exited that business in December and repositioned itself as a home furnishings retailer under the House2Home name because of "competitive difficulties."
The conversion, which cost about $231 million, involved closing all of Homebase's 89 stores and converting 42 of those stores into House2Homes. It was completed in August, just a month before the attacks. HomeBase closed its three stores in the Las Vegas area and converted two to the House2Home concept.
House2Home said it is now seeking bankruptcy court approval to liquidate all 42 stores and to use the proceeds to pay off its creditors. The two local House2Homes, which have between 115 and 120 workers each, plan to retain some of the workers to handle the liquidation sales. All the workers will be laid off once the sales are completed.
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