WARMINSTER, Pa. — Regency Furniture is closing all seven of its Mealy furniture stores three years after it acquired the Philadelphia-area retailer and plans to re-enter the market next year under the Regency brand.
The retailer posted on Facebook and on its website that it’s “Going out of business forever” and “Everything must go.” The closing sale at its one New Jersey Mealy’s store started earlier this summer, while the Pennsylvania store liquidations began about a week ago, said Regency President Mark Stuart.
“We’re restructuring and streamlining the business to make it a more efficient operation,” he said. “The idea is to grow between here and along the Eastern seaboard the Regency brand.”
Stuart said the company has yet to decide how many of the Mealey’s stores will reopen as Regency.
Brandywine, Md.-based Regency acquired the mid-priced Mealey’s from a private equity firm in September 2016, a move that gave the aggressively expanding retailer its fourth retail banner at the time, entry into a new market and a foothold for additional northeastern expansion.
Before the acquisition, Mealey’s was Top 100 company in its own right with estimated 2015 furniture, bedding and accessory sales of $58 million. The retailer operated six full-line showrooms (including one in New Jersey) and a clearance center.
Owned by Abdul Ayyad and in business since 1999, the promotional to mid-priced Regency generated estimated 2018 furniture, bedding and accessory sales of $292 million at 45 stores under all retail banners: Regency Furniture, Ashley HomeStore, Marlo Furniture, Mealey’s and Raley’s Home Furnishings.
Regency initially planned to expand into Philadelphia with its own Regency banner before the Mealey’s purchase. And even after the acquisition, Stuart said that still remained a possibility. “Now we have options in Philadelphia and going further Northeast as far as future expansion goes,” he told Furniture Today in 2016.
In one sense, the retailer is returning to that initial plan. Stuart said Regency has done well in Philadelphia with Mealey’s and called the move to close and restructure a business decision it has been contemplating for the past two years “to make things more efficient.” The conversion will give Regency more exposure and enable merchandising improvements.
“We’ve had to manage thousands of SKUs across five brands, and it’s just not cost efficient or effective to do so,” he said. “We’ll narrow the lineup, targeting specific vendors to grow with and become more meaningful to under the one brand.”
There are no current plans to convert the Marlo or Raley’s stores to Regency.
The company hired Watch Hill Furniture Capital to run the Mealey’s liquidation through about mid-December. Stuart didn’t give a sales figure but said he expects the event will bring in about a year’s worth of business.
The conversion of some stores to Regency will occur in the first quarter. In addition, the company will open additional Regency stores in Manassas and Sterling, Va., in October and Frederick, Va., and Hagerstown, Md., in January.