People walk past the Bad Boy Furniture store in Brampton, Ont., on Nov. 13. The company has said it will file for bankruptcy because of its debts, saying it is having trouble finding inventory due to rising inflation and interest rates.Christopher Katsarov/Canadian Press
Bad Boy, the furniture retailer founded by former Toronto Mayor Mel Lastman and known for ads promising “nooobodies” offering better deals, is facing financial crisis and plans to restructure its business. .
Late last week, Pickering, Ont.-based Bad Boy Furniture Warehouse Inc. filed a notice of intent to make an offer under the Insolvency and Insolvency Act, stating that the company owes money to a number of vendors. . As a result, Bad Boy is experiencing “significant inventory sourcing challenges” that are impacting its retail operations. The company also issued a notice to customers warning that those who dropped off furniture and appliances would not be able to receive their orders or receive a refund from the company.
Like other retailers, Bad Boy has seen consumers cut back on spending as they feel the pinch of inflation and high interest rates. In a notice to customers, the company said the restructuring was a “very difficult decision” as the “tight retail environment” was particularly impacting the household goods sector.
Bad Boy is wholly owned by a company run by Lastman’s son, Blaine Lastman, who revived the business in the early 1990s. In addition to his 12 stores in Ontario, he also operates a business that sells home appliances to real estate developers and property managers. Bad Boy has approximately 275 employees.
“The Company is considering a liquidation sale of some or all of its stores to enable it to reduce inefficiencies in its business in an orderly manner,” the Ontario Superior Court filing states. .
As of Nov. 4, Bad Boy is facing claims from unsecured creditors including major consumer electronics brands such as Whirlpool, Samsung, Electrolux, and LG, as well as furniture suppliers such as Sofa by Fancy and Edgewood Furniture. He is $13.8 million in debt. It also owes $317,382 to RioCan Real Estate Investment Trust, the landlord of its other Ontario stores in Mississauga, Burlington, Brampton and Kingston.
The company received approximately $4.5 million in deposits from customers for future deliveries. Bad Boy advises customers who have not received their orders to contact their credit card provider for a refund. Bad Boy plans to complete some orders “if the price of the product falls below the outstanding balance,” according to the filing.
The crisis marks a turning point for the company, which opened its first store in Toronto nearly 70 years ago. According to a video Bad Boy made about the company’s history, young Mel Lastman started his own business after the furniture store he worked at went bankrupt. Mr. Lastman founded Heather Hill He Appliances in 1954 and changed the company name to Bud He Boy He Appliances the following year.
He became known for bold marketing stunts, such as handing out money on street corners in downtown Toronto and giving away free Thanksgiving turkeys (while on a leash and still gobbling them). .
By the early ’70s, Mr. Lastman’s ambitions had turned to politics. He was elected mayor of North York in 1973 and continued to run Bad Boy for his first three years in office, then in 1976 he sold 40 stores.
Mr. Lastman’s son, Blaine, revived the brand in 1991, betting that the company could survive the recession. Blaine and Mel Lastman often appeared in commercials together with the slogan, “Who’s better than the bad boy?” No, no one!
Retail industry consultant Bruce Winder says the current economic climate is pushing back large-scale furniture sales, with customers across the industry turning away after furniture sales soared during the COVID-19 home improvement boom. There is now even more incentive to postpone. Purchase tickets. The industry has also seen rising initial costs since Canada Border Services Agency imposed new tariffs on some upholstered furniture from China and Vietnam two years ago.
And competition for low-priced furniture is fiercer than ever.
“If you look at companies like IKEA and Wayfair, they have much more affinity with younger customers, especially customers on a budget,” Winder said.
Bad Boy’s challenge going forward will be to regain customer trust, he added.
“It creates a bit of a doom loop because customers say, ‘Are you sure you’re going to buy a refrigerator, washer, and dryer from Bad Boy?'” Weren’t they in bankruptcy? Who will fix it in a year or two? ” said Mr. Winder. “Even if they get through this situation, it’s going to stay with them.”