Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, May 13, 1990 TAG: 9005130034
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY BUSINESS WRITER
DATELINE: LENGTH: Long
The details of a going-out-of-business sale, which began Thursday, created as much excitement as anything the store has done in its 45 years.
It sparked a visit from Salem police to determine if the owners had a going-out-of-business sale license. Better Business Bureau executive director Fran Stephanz staked out the store's loading docks to see what was being delivered and the Salem commonwealth's attorney got involved.
The Better Business Bureau, in a May 4 news release, said it was concerned about "truth-in-advertising" as it applied to the Stephenson & Aldridge sale. It alleged that the Salem store had joined with another Roanoke Valley furniture store to bring in for the sale merchandise of a lower quality than Stephenson & Aldridge traditionally sold.
Store owners offered a reply to the BBB news release, saying that the release contained "what we believe is substantial misinformation."
Stephenson & Aldridge said it had hired a "specialized management consulting firm" to assist in the sale and said it believed its inventory to be good quality.
It said it had leased its Apperson Drive building to a group of investors who have the option to buy it.
State law requires that a company quitting business have a license for its final sale and provide an inventory of what is to be sold. The law forbids mixing other goods with the inventoried items.
The Stephenson & Aldridge sale license, however, was as much a problem for Max Brown, Salem's commissioner of revenue, as it was for the furniture company.
The store contacted Brown's office a couple of weeks ago about getting a license and was told it didn't need one. Brown said that happened because he was new in his job and didn't know about going-out-of business licenses.
The Salem official issued a license to the furniture store on Monday. Tuesday it was rescinded until a full inventory of items to be sold was received. Store officials delivered the inventory late Wednesday and the license was reissued.
Among items Stephenson & Aldridge is selling are lower-priced upholstered pieces bought from a Tennessee manufacturer that the store had not bought from previously.
An executive for England-Corsair of New Tazewell, Tenn., said High Point Furniture Outlet, a chain of separately owned stores, is a regular customer.
Three owners of High Point Outlet stores in the Roanoke Valley are officers in High Point Management Corp., which is running the Stephenson & Aldridge sale.
BBB's Stephanz saw the Tennessee merchandise being unloaded. She said drivers told her it was for High Point Furniture. That prompted her warning to consumers that the sale merchandise quality might be inferior to Stephenson & Aldridge's usual offerings and that sale prices might not be "true sale prices."
Sonny Stephenson said England-Corsair is only one of several companies that he bought from in preparation for the sale. He said he made some good buys at the April International Home Furnishings Market because some of the manufacturers were "hungry."
He said he not only bought some lower-cost lines than he normally carries for the final sale, he ordered chairs to go with some outdoor tables in stock. He added to his bedding inventory. Some 15 to 20 percent of what is being sold was bought for the sale, Stephenson said.
The practice is one that Fred King, Salem commonwealth's attorney, said he understands. He described a hypothetical situation:
"Assume your normal product is A-class widgets that you bought for $4 and sell for $5. If you're going out of business - in order to make a few extra bucks and cut your losses a little - you buy C-class widgets for $3 and still sell them for $5.
"It may be a little suspect as to what we hope people will do, but as I read the going out-of-business state statute, that practice is not illegal," King said.
When the England-Corsair tractor-trailer was taped by television cameras unloading at the Salem store's dock, it was bringing sofas and chairs ordered in mid-April in Sonny Stephenson's name, said Jim Loope, vice president of sales at England-Corsair.
The items generally retail in the $399-$599 range for sofas and up to $349 for the chairs, according to England-Corsair.
In the Stephenson & Aldridge showroom, one sofa and chair pair was tagged "regular retail, $1,420, sale price, $765." The manufacturer of the sofa and chair said the inventory numbers on the pair matched those for items that would normally retail at $479 for the sofa and $329 for the chair - $808 for the pair.
The manufacturer also said inflated "regular" prices are "routine retail, no matter what you're selling."
It's a practice that many customers recognize and that prompted one shopper at Stephenson & Aldridge Thursday to say:
"Oh, prices slashed to normal!"
Long lines of shoppers waited for the 10 a.m. opening for the sale on Thursday. Displayed with the new promotional-priced pieces were the standard, higher-price Stephenson & Aldridges lines: Century, Lane, Rowe and Meadowcraft.
"All I'm asking customers to do is come in and compare prices," Stephenson said.
He said he hired the High Point Management going-out-of-business experts because they could advise him on running a sale and supply salespeople for it.
Stephenson said the High Point company also has a five-year lease purchase agreement on the Apperson property.
Stephenson said the Stephenson & Aldridge assets are tied up in the 40,000-square-foot Apperson property. "We were mainly interested in disposing of this piece of real estate," he said.
Stephenson said he wouldn't be surprised if the High Point group opened some type of furniture store in the location.
C.A. Roberson Jr. of Dunn, N.C., is vice president of High Point Management. He also is an owner of the High Point Furniture store across Apperson from Stephenson & Aldridge. He would not say what will go into the Stephenson & Aldridge location, but he said the High Point Furniture store is not moving.
Nyles Vernon, president of High Point Management and an owner of the Vinton High Point Furniture store, said he would have nothing to say about anything before Monday.
Business writer Greg Edwards contributed information to this story.
by CNB