The 102-year-old P.J. Nee furniture company shut down last week, apparently the victim of a serious case of the sales decline that has hit furniture retailers nationwide.
A somber-voiced recording greets customers who call the furniture company's Bethesda store with the information that the firm has filed for bankruptcy and that creditors, including customers with deposits, will be contacted sometime in March.
The director of the Montgomery Office of Consumer Affairs said the county will try to aid customers who had made deposits on furniture that is undelivered.
The company, which had a single retail location on Wisconsin Avenue in Bethesda, closed its doors on Jan. 2 and filed for bankruptcy Jan. 5. after post-Christmas sales fell far short of their customary mark. Instead of normal sales of $20,000 to $25,000 a day, the store had sales of about $1,000 a day this year, said attorney Sam Greenbaum, who is handling the firm's bankruptcy proceeding.
The dismal record during a time when business is usually good underlined the hopelessness of the company's plight, according to Greenbaum.
"There was a very dramatic and tremendous decline in the business beginning in August of this year," Greenbaum said. "The business just came to a standstill."
The company had 20 to 25 employes when it shut down, he said. The company's indebtedness totalled $500,000 to $600,000. The firm's assets included an inventory worth approximately $250,000 at cost, but worth $500,000 to $600,000 at retail sales value. The company's problem was that it couldn't sell the inventory, even at post-Christmas discounts, he said.
"They were out of money," Greenbaum said. "The dramatic drop in volume was such that there was no hope of continuing to do business." The family-run firm was directed by three grandsons of the founder at the time it shut down, according to Greenbaum, who added "it was a trauma to the people involved."
Barbara Gregg, director of the office of consumer affairs in Montgomery County, said her office had received eight complaints in November and December from customers who had made deposits on furniture but who had not received the items. "P.J. Nee had not been a problem company" previously, she said.
In response to a letter from the county office asking the company to appear and answer complaints, the county was informed about the bankruptcy petition. The company filed under Chapter VII of the federal bankruptcy law, which means that it shut down, rather than under Chapter XI, which allows a company to continue to operate while trying to put its finances in shape.
Gregg said the consumer affairs office since has discovered 328 customers who had made deposits but received no furniture. Greenbaum said he thought that figure was smaller.
Gregg said her office will contact manufacturers and try to enlist their cooperation in getting the furniture to customers at the price they had expected to pay.