August 21, 2014

The Rise and Fall of a Colossus

Everything must go. Even the finest things.

For years and years, it seemed the modest Fort Myers furniture store that became a leading nationwide retailer of the latest, sleekest, most expensive interior decorations was as solid and permanent as the $94,000 buffets it offered to customers from Miami to Las Vegas.

For a business that dated back to the earliest days of Southwest Florida, Robb & Stucky’s end was dizzyingly swift. In a few short weeks after the company filed for bankruptcy in February, liquidators were emptying out the once painstakingly arranged sofas, beds, tables and accessories as fast as they could slash prices.

Now, the last pieces of Robb & Stucky merchandise have been sold, the liquidation sales banners have been rolled up and the doors have been locked. Everything had to go, including Robb & Stucky.

 

In many ways, the history of Robb & Stucky is a mirror of the growth of Southwest Florida. The business dates back to shortly after the arrival of Thomas Edison and Henry Ford. It maintained a singular, steady presence in downtown Fort Myers for six decades. It expanded—conservatively —in the ’60s to Naples. And then, in the 1980s, it gathered momentum for what would turn out to be 30 years of bustling success—followed by an abrupt and precipitous fall.

It was an outsider, native South African Clive Lubner, who turned what had been a modest local furniture store into a Sunbelt purveyor of luxury living with locations in Florida, Texas, Arizona, North Carolina, Nevada and Costa Rica. At its peak, Robb & Stucky employed 1,300 people in four warehouses, 12 interior showrooms and seven patio stores, all steered from its Fort Myers headquarters.

Lubner’s forte was marketing. He brought to furniture retailing the notion that what he was selling wasn’t just armchairs and armoires, but a way of life that was more refined and coordinated than what most customers would have envisioned on their own. “Visual merchandising,” he called it. And to that end he employed a team of artisans—carpenters, drapery makers, interior designers, upholsterers—to work the same kind of magic that a Hollywood movie studio’s art department creates. Those same designers and decorators were available for customers to take home with them in order to recreate the effect on a personalized basis.

It was total upscale immersion.

“There is absolutely no doubt about it. Our lifestyle merchandising is what changed us,” Lubner said in 2008. “Many years ago we were gallery merchandisers, and that got old real quick. We keep evolving what we’re doing with our lifestyle presentations.”

Receptionists greeted Robb & Stucky customers at the doors of its cavernous, sumptuous showrooms and introduced them to a salesperson who gathered information about tastes, fashion sense, personal preferences and budget. The salesperson steered the customer to various products or introduced one of the staff interior designers, who could arrange for house calls, work up models, drawings, color boards. You name it.

 Robb & Stucky developed a detailed manual for suppliers, specifying what was and wasn’t acceptable in terms of materials and workmanship. The company employed artisans to inspect and correct damaged merchandise. It also maintained its own spraying and dyeing facilities to work with customers who wanted more customized service.

Robb & Stucky under Clive Lubner was all about getting the little things right. “We don’t believe we sell anything,” Lubner told a trade group a few years ago. “We place. Our designers place everything. They place for the customer. The customer really doesn’t come in and care about if it’s brand H or brand C or whatever the brand is. They’re buying the Robb & Stucky brand.” The result? While the furniture retailing industry’s average transaction was $875, Robb & Stucky’s was $6,000.

 

Clive Lubner emigrated from South Africa to the U.S. in 1978. He had $70,000—the most he was allowed to enter the country with—a wife and two young children. He also had big plans. Back home, he helped build his family’s furniture business into a chain with 116 locations. In America, he was looking to use his experience in the business to do something extraordinary.

The choice of Fort Myers as the hub of this dream was no accident. Southwest Florida was poised for growth. Plenty of retiring baby boomers would be building new homes, and those homes would need to be furnished. Unlike Florida’s already booming East coast, there was little competition on the Gulf side of the state. And so Lubner, partnered with the Mariner Group (developers of South Seas Plantation Resort & Yacht Harbour on Captiva Island), bought Robb & Stucky Furniture.

The original company dated back to the shell-road days of Fort Myers. A year after it was founded by Virgil C. Robb and W.R. Lee in 1915, Mrs. Clara Ford, Henry’s wife, bought furniture there. Harry Stucky joined the company in 1917, and in 1925 when Lee left, the name officially became Robb & Stucky. In 1958, Louis and William Bowles bought the store, which was located on Hendry Street in downtown Fort Myers across from the Lee County Courthouse. The building remains, with the names Robb and Stucky carved into its façade. In 1967, a Naples outlet was added.

In 1979, when Lubner became CEO, Robb & Stucky had annual sales of $2 million. In 10 years, there were showrooms in Sarasota, Clearwater, Orlando and Phoenix. In 10 more years, the Fort Myers location moved to a larger facility; Naples was expanded and remodeled; locations were opened on Florida’s east coast in Palm Beach, Boca Raton and Coral Gables. Another showroom opened in Tampa, as well as locations in Texas and Las Vegas and warehouses in North Carolina, Fort Myers and Phoenix.

At the peak of its success 25 years after Clive Lubner took over, Robb & Stucky’s revenues were just shy of $275 million.

That was 2005. In the previous five years, the major markets in which Robb & Stucky expanded had exploded. Population in Las Vegas: up 30 percent. Phoenix, 24 percent. Orlando, 20 percent. Dallas, 16 percent. Of the top 100 fastest-growing cities in first five years of the new millennium, 38 were in the four states in which Robb & Stucky had locations.

But then the bubble burst. You know the story. Shoddy mortgage lending, reckless packaging and sale of loans to investors, risky bets on complicated securities backed by the loans. When the housing market collapsed, it seemed no one understood the intricate lacework of financial interconnections that stretched from Main Street to Wall Street.

 In hindsight, bad home mortgages were clearly key to the crisis. Ten states accounted for 74 percent of foreclosures during 2008. Four of them were those same states in which Robb & Stucky operated.

In its bankruptcy filing in February, Robb & Stucky noted just how hard its markets were hit by the recession. Home prices were down 20 percent from 2006. Cities with the highest home price growth prior to 2007—Phoenix, Las Vegas, Tampa—experienced the sharpest declines since then, along with the slowest rate of recovery of lost jobs.

The company cited industry experts who in 2008 reported 1 million fewer affluent households were buying high-end furniture, translating to a $2 billion drop in sales from 2007.

The Lubners didn’t sit idly by while sales plunged. By late 2008, a few months after fellow Southwest Florida corporate titan WCI began its bankruptcy proceedings, the company started to lower costs by closing unprofitable stores. It introduced new products under its own label with a wider range of prices, renegotiated store rents, enhanced its internet presence, beefed up seasonal patio sales and emphasized the hospitality and resort division.

In 2010, it closed three full-line stores, two patio stores and four clearance centers. In October 2010, it borrowed $3.5 million from CIRS and retained Kevin Regan of FTI Consulting as chief restructuring officer to help solve the company’s financial problems.

On Feb. 2, Robb & Stucky filed for protection from its creditors under Chapter 11 of the U.S. bankruptcy code. Company officials asked the U.S. District Court in Tampa to allow them to try to restructure the company and remain in business. The filing reported debts to creditors of $35 million. From 2006 to 2010, revenues plunged by about 50 percent to $139 million while operating income collapsed into the red—from an $11 million gain to a loss of $12 million.

Bankruptcy was one final effort to salvage what was clearly a dire situation. The company hoped to be able to liquidate its inventory, settle its debts and reorganize. And lots of people were pulling for the Lubners to succeed. Scott Dow, general manager of Curvet USA, a producer of glass sinks, tables and counters, wrote to Judge Caryl E. Delano in support of the Robb & Stucky bankruptcy even though his company stood to lose thousands of dollars. The company was an “icon of the furniture industry.”

“I don’t believe this is a matter of mismanagement or miscalculations,” Dow wrote. “It is simply that Robb & Stucky was too big to adapt to the economic downturn—too much overhead, too many locations and too much inventory.”

Mickey Waldrup, president of the Sarasota design firm Furniture Services Group Inc., wrote that Robb & Stucky had “a certain swagger that was almost contagious. These are people with integrity. They care about their business, their associates and the communities they are in. They are not just a store down the street; they are neighbors in the community.”

Dozens of letters—from suppliers, employees, competitors and the charities and community organizations the company supported over the years—urged Judge Delano to give the Lubners a chance to revive the company. Not only did it employ hundreds, but also it remained a model of corporate citizenship, embracing causes from the American Cancer Society to Habitat for Humanity, the Humane Society, Public Broadcasting and dozens of others in the communities in which it operated.

“They’ve been major supporters over many years,” said Tyler Gutowski, development associate for the Florida Repertory Co., on whose board Sonya “Sunny” Lubner serves as secretary. “They’ve given money to education programs and introduced us to other supporters. They are actively involved.”

 

Along with his father, Dan Lubner had hoped to carry on the Robb & Stucky story even after the liquidation. As late as May 2011 he was telling trade groups that the company was “on hiatus” and would re-emerge in a smaller, more focused version. “We’re the oldest new company in the history of the world,” he said.

But even those modest plans were shattered at the end of May when the Lubners lost out on a bid to buy back the Robb & Stucky trademark and associated intellectual property. A company run by Asian furniture magnate Samuel Kuo bid $470,000, $10,000 more than the Lubners, and the sale was approved by the bankruptcy judge.

So Robb & Stucky may yet live on, but it won’t be under the direction of the Lubners. Still, Dan Lubner said, not everything must go. There’s a plan to go forward. “Much of it is in a very positive and exciting direction,” he said.

The family isn’t ready yet to talk about the past or the future in great detail. But Dan Lubner remains optimistic. “We have a great story to tell,” he said.       

 

STEPPING UP

Although robb & stucky was the dominant force in the local fine furniture market, it wasn’t the only game in town. Several shops hope to see value come from the void.
    Larry Norris, owner of Norris Home Furnishings, plans to open a new store in Naples this summer. He says opening the firm’s third store in Southwest Florida is not directly related to Robb & Stucky’s liquidation. But he does hope to gain customers who were once loyal to the furniture Goliath.
    “I was sorry to see Robb & Stucky go,” Norris says. “That being said, it creates a tremendous opportunity for our company to grow.”
    Using 46,000 square feet, more than double the size of its Fort Myers headquarters, Norris will showcase exclusive lines like Stickley and lines once found at Robb & Stucky, such as Hancock and Moore, and Vanguard. Plus, he has promised an arsenal of designers to outfit the store.
    Other furniture purveyors are hoping one less competitor helps maintain their footing in the area.
    Mike Schumann, owner of Traditions Classic Home Furniture, echoes the sentiments of many fine furniture providers in the region: “We’re pretty confident our business is growing. Hopefully, with Robb & Stucky no longer there, the customers will discover our store.”

For former Robb & Stucky clients looking for new options, see below for a list of stores in the region that can help you find furnishings to match your style.
 

Choice Options

Companies hoping to fill the void left by Robb & Stucky’s liquidation.

Bay Design (649-0906, www.baydesignstore.com) The store doubles as a showroom for the Naples-based interior design firm; the products exude a classic and coastal feeling while remaining comfortable and contemporary.

Denmark Interiors (561-5656, www.denmarkinteriors.com) Offering the finest quality, contemporary furniture and accessories from around the world, as well as complimentary design services.

East Indies Home and Patio (596-7273, www.eastindieshome.com) This Naples shop carries tropical-style furniture and accessories with hints of British colonial themes.

Fifth Avenue Design Gallery (417-3650, www.fifthavenuedesigngallery.com) An interior design firm with a downtown Naples showroom that carries, in addition to furniture, original art, rugs and accessories.

Island Bi-Design (240-5325, www.islandbidesign.com) Collections blur the boundaries between outdoor and indoor furniture while creating an oasis for a lush interior and exterior lifestyle.

Norris Home Furnishings (690-9844, www.norrishomefurnishings.com) A store with locations in Fort Myers, Sanibel and Naples offering the best and most exclusive designer brands.

Miromar Design Center (390-8200, www.miromardesigncenter.com) Three levels of chic showrooms with professional designers offering a complimentary one-hour consultation.

Peach Tree Designs (643-4202, www.peachtreedesigns.com) Carrying everything from oriental to traditional pieces, this Naples boutique offers interior design specialists but focuses on retail relations.

Summerfields (430-2505, www.summerfieldsnaples.com) A Naples shop with unique antiques, furniture and accessories, many of which are made especially for the store, that give a sense of sophistication and whimsy.

Traditions Classic Home Furniture (213-1240, www.traditions.com) Classic English reproductions can be found in this interior design firm’s showroom, which features manufacturers from around the world.

Sunny’s Brave Crusades

Community activism comes naturally to Sunny Lubner. Both of her parents, Esther and Hymie Barsel, were imprisoned in South Africa for their lifelong opposition to the apartheid policies of the repressive South African government.

In 1956, Hymie Barsel was one of 157 anti-apartheid activists accused of treason. Among the group was Nelson Mandela. Hymie was held in jail for three years and endured physical torture that led to his early death in 1987.
Esther Barsel was arrested in 1964 and spent four years in jail followed by five years of house arrest, during which she was not allowed to leave her home without police permission. At Clive and Sunny’s wedding in 1968 at a synagogue only 10 minutes from Sunny’s childhood home, Esther had to be home by 10 p.m.

While Hymie Barsel didn’t live to see the end of the racist policies of the South African government, Esther did. The release from prison of Nelson Mandela in 1989 also marked a kind of freedom for Esther. A South African newspaper reporter described her at age 74 in 1998 as working to rid her working-class Johannesburg neighborhood of drug dealers. At the age of 81, she was blogging on behalf of same-sex marriages in South Africa. Three months before she died in 2008, Esther had lunch with Nelson Mandela on his 90th birthday. At her funeral, Mandela sent a personal letter to Esther’s family expressing his condolences on the passing of his longtime friend.

“It’s an amazing story,” says Sunny’s son, Dan Lubner. — Kevin Allen
 

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