Over the past five years, furniture retail chains have faced significant challenges, much like other sectors, largely due to the long-lasting effects of the Covid-19 pandemic. Supply chain disruptions, initially worsened by the pandemic, were followed by a drop in demand for home furnishings as housing sales slowed in 2022 and 2023 due to rising interest rates.
Additionally, the surge in inflation over the past three years has driven up inventory costs, leading to higher prices that discouraged consumers from making purchases. These tough business conditions prompted many furniture retailers to close stores, restructure their operations out of court, and even file for bankruptcy.
The years 2023 and 2024 were especially hard for the industry, with several furniture chains closing locations and filing for bankruptcy. A notable example includes the Illinois-based furniture retailer, which closed eight of its 26 stores across Illinois, Indiana, and Wisconsin. Despite these closures, the company aimed to focus on strengthening the remaining 18 stores in the Chicago area.
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A significant development in the furniture retail landscape is the return of Z Gallerie, the lifestyle furniture brand that filed for bankruptcy previously. In March 2025, Z Gallerie will open a new warehouse outlet in Gardena, California, marking the brand’s return to brick-and-mortar retail. Karat Home, which acquired the company out of bankruptcy in January 2024, is behind the store’s revival. According to CEO Scarlett Fan, the new location will feature exclusive deals while also contributing to the community’s recovery from the devastating wildfires in the Los Angeles area by offering affordable home furnishings.
In addition to the Gardena store, Z Gallerie plans to open a pop-up store in either Dallas or Houston, Texas, as part of its effort to rebuild the brand’s presence in physical retail spaces.
Z Gallerie had been under the ownership of DirectBuy Home Improvement, an affiliate of CSC Generation Holdings, which filed for Chapter 11 bankruptcy in October 2023. The bankruptcy led to the closure of all DirectBuy locations and the sale of its assets. This filing marked the third time Z Gallerie had filed for bankruptcy, having previously done so in 2009 and 2019.
According to court filings, the company attributed the downturn in its business to several factors, including the disruptions caused by the pandemic, rising import costs in 2021 and 2022, and the slowdown in the housing market due to increased interest rates and mortgage costs, which in turn led to a reduction in new home purchases. As much of Z Gallerie’s sales had been tied to the housing market, these shifts had a significant impact on its financial stability.
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