You may remember DirectBuy, a store selling furniture and other items to spiff up your home that promises deep discounts to people who sign up for a pricey membership. This business model is apparently not working out for them, since the company filed for Chapter 11 bankruptcy protection this week.
As far as we’ve ever been able to to tell, the company prioritized selling memberships over selling any items, even refusing entry to its showrooms to members of couples where only one partner came to check out the store.
Memberships to the store cost thousands of dollars per year, and you can probably guess that it’s difficult, if not impossible, to get a refund. The company was not especially sympathetic if it, say, shut down your nearest location after you had just paid over $5,000 to have access for two years.
Other members reported signing up and then not being allowed to buy any of the items they actually wanted.
In its bankruptcy filing, the company reported over $100 million in debt, and arranged before the filing to sell itself to creditors for $10 million unless a higher bid is submitted during the Chapter 11 process. The chain has been for sale for some time, but no interested buyers showed up.
The stores will remain open, and no change to the business model was announced.
DirectBuy files for Chapter 11 bankruptcy protection [Furniture Today]
by Laura Northrup via Consumerist