Barrymore Furniture Co. Ltd., an iconic Canadian furniture maker and retailer with a history in Toronto dating back to 1919, has filed for bankruptcy, leaving a throng of angry, unpaid workers in its wake.
The company — which employed more than 50 people and was originally located in a brick factory on King Street West before moving to Toronto’s design district on Caledonia Road — left some workers owed nearly $50,000 in unpaid severance and benefits, according to union officials.
Barrymore had been profitable until sales tumbled dramatically in 2018, ultimately triggering a bankruptcy filing last month.
The closure is the latest in a string of high-end furniture retailer failures — including Rosedale institution Ridpath’s Furnishings and contemporary furniture retailer DeBoer’s — that experts attribute to an influx of online and international retailers selling much cheaper off-the-rack products, many of them made overseas.
Roopchand Doon, chair of the United Steelworkers unit representing the 48 unionized former employees at the company, said workers received only one day’s notice that operations would cease — and they were informed they would not receive termination, severance and benefits payments.
Doon said many workers — some of whom had decades of service with Barrymore — agreed last year to forgo shifts and take pay cuts as part of a work-share program aimed at helping the company through a difficult period. Doon said most of the workers are owed tens of thousands of dollars, some close to $50,000.
“It was very shocking and upsetting to us, to be treated like that. It’s incredibly hurtful.”
Barrymore’s bankruptcy trustee, A. Farber & Partners Inc., is staging an asset sale Thursday at the company’s showroom and manufacturing facility on Caledonia Road in Toronto. Neither Barrymore nor its legal counsel or bankruptcy trustee could be immediately reached for comment.
The auction, featuring more than $750,000 worth of furniture, will take place on the same day that workers plan a rally in Toronto’s Financial District outside the office of the trustee where the first meeting of secured creditors is to be held.
“Once again, working people are victims of a rigged system that disregards their interests while giving priority to wealthy investors,” said Carolyn Egan, president of the Steelworkers Toronto Area Council. She noted the union has long sought reform of Canada’s insolvency regime to prioritize unsecured workers and will keep up the fight, despite a lack of success to date.
Matt Manara, partner and portfolio manager at Avenue Investment Management in Toronto, said Barrymore listed $7.5 million in liabilities in its bankruptcy notice of intent filing in November.
Manara said the company had been struggling for some time, thanks to its comparatively lofty prices, a result of high manufacturing costs at its Toronto facility. He added that made-in-Canada furniture makers in general are under increasing pressure from a slew of new competitors that manufacture their furniture overseas for much less.
Online furniture stores, such as American e-commerce platform Wayfair Inc., have also made buying furniture quick and easy, Manara said, while offering services such as the ability to virtually input pieces in a residential floor plan.
“There is a part of a market that wants to sit on a couch but the furniture business is hard. You always have cheaper competitors from overseas and you have incredible pricing pressure on margins.”
“Maybe it was the economic times,” added the Steelworkers’ Egan, suggesting that Barrymore’s experience mirrors an uncertain and volatile economy that may have cut into discretionary consumer spending on high-end custom furniture.
Craig Patterson, editor of industry publication Retail Insider, said Barrymore experienced a devastating drop in sales of roughly 40 per cent after 2018.
He posits the slump was caused by several factors, including the higher debt levels of Canadian households, smaller living quarters in big cities such as Toronto, and explosive growth in both bricks-and-mortar and online competitors offering quality furniture “that’s not that expensive.”
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“Demographics, cost of living, smaller condos and competition ramping up” have all pressured the bottom lines of made-to-order boutique furniture retailers in Toronto, he said, with some forced to reposition their businesses.
“We’ve seen a number of furniture retailers shuttering or reducing their size,” Patterson said, noting Barrymore’s website lacked details on pricing of its sofas, chairs, sectionals and other items, a factor that could have inhibited purchases.