industry insider | Dec 11, 2023 |
The furniture liquidation business is booming. Just ask The Dump

The collapse of Mitchell Gold + Bob Williams kicked off a scramble to solve the mystery of what would happen to the tens of thousands of pieces of furniture stuck in bankruptcy limbo. When the news broke that much of MG+BW’s inventory had been acquired by The Dump, another puzzle emerged: Wait, what is The Dump?

To be fair, it may have mostly been coastal elite types scratching their heads. If you live in the Sun Belt, you’re probably already familiar with the memorably named chain of outlets, which occupy a unique niche in the world of furniture liquidation. Yes, like other off-price merchants, The Dump offers cutthroat pricing on the inventory that brands couldn’t unload elsewhere. But unlike many competitors, The Dump looks to stick to the mid to upper tier of the retail market—it buys from suppliers to Arhaus, from brands like Bernhardt, and now, of course, from Mitchell Gold + Bob Williams.

“We’re a little bit different in that we’re trying to go after these higher-tier brands but sell them at a discount price, which is not always easy to convey,” says president Randi Strelitz, who runs the company alongside her husband, E.J. Strelitz (their adult children are also involved in what is very much a family-owned business).

The Dump grew out of a traditional home retailer, Norfolk, Virginia–based Haynes Furniture, which was purchased by Eric Strelitz (E.J.’s grandfather) in 1930. In 1986, looking to unload their overstock and develop a new line of business, the Strelitzes opened up a location they playfully called The Dump, at first operating the shop only on weekends.

The store was a hit, and grew over time from a local business into a national chain with nine locations, eventually far eclipsing Haynes itself. The Strelitzes found success in size, opening 100,000-square-foot showrooms (the Atlanta location is in a former Home Depot) with cavernous attached logistics warehouses to receive and process incoming inventory.

With a big footprint comes high real estate costs, which helps explain why The Dump has a location in Tempe, Arizona, and not Los Angeles. “Often, we try to find a location on the way to the airport, because people know how to get there already,” says Randi with a laugh.

The Dump offers a mirror-flip view of the rest of the home industry. For the Strelitzes, there was no pandemic boom. “Our inventory is based on excess supply. The first time there was ever absolutely no excess supply was during Covid, so our concept started to shift,” says the brand’s director of operations, Jessica Strelitz. “Now, we’re getting back into the groove of what we really are.”

Now that much of the retail furniture business is in the doldrums, The Dump is thriving. Brands have plenty of surplus inventory to unload—sometimes an entire company’s worth—and the Strelitzes have a strong negotiating position. The baseline, says Randi, is for brands to offer their merchandise at 30 percent below the going rate elsewhere. “If it can’t be a value [buy] for our customers, we’re not buying it,” she says.

A strong hand in negotiations doesn’t mean that deals always come together without a hitch. One of the fundamental challenges of the liquidation business is that brands want to unload their stock without their primary customer finding out (the thought is so anathema to luxury fashion houses that some have literally burned their inventory rather than sell it at a discount). By contrast, liquidators want customers to know they have the good stuff. From that tension, complicated arrangements emerge.

“We try to get that information from brands upfront: How do you feel about us using your name? Can we use it in traditional media? Can we only use it in our stores?” says Randi. “There are different rules [with different brands].”

Mostly, though, the challenges are logistical. It’s tough to run a smooth business with such an unpredictable inventory of one-of-a-kinds. For that reason, The Dump has had limited success selling online so far: Often, the cost of shipping even a heavily discounted sofa will exceed the original retail price.

The Mitchell Gold + Bob Williams acquisition, with its tens of thousands of pieces, is an order of magnitude more complex than any other bulk purchase the Strelitzes have made. Almost a month into the buy, they’re still putting the jigsaw puzzle together to find out exactly how much they have and where it all needs to go. “It’s like acquiring an entire new company,” says Randi.

To help the brand’s former customers figure out what happened to their stuff (or get a deal on new items), Jessica has set up a Facebook group, which currently has 2,600 members. Though some MG+BW clients in the group were unable to get a refund, she says that the vast majority successfully got a credit card chargeback and are just looking to rebuy their furniture—now at a radically reduced rate.

With an industry in turmoil, and likely other companies soon in need of a liquidator, these are busy times for The Dump. The Strelitzes say they’re looking to finesse their digital operations and expand. Something that’s more up in the air? Changing the brand name.

“We love the name, we hate the name,” says Randi with a laugh. “We’ll see where the next iteration goes. But, you know, you have to get your message across. We’re not snobby. We’re here to bring value to the customer.”

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