Posted: Oct 23, 2007, 3:06 AM
Join Date: Apr 2005
Location: Canary Wharf->CityPlace
The downfall of UpCountry
Trendy urban furniture store declares bankruptcy; owner says he overexpanded with two new stores
Oct 13, 2007 04:30 AM
A well-known Toronto furniture retailer that catered to the hip young downtown crowd has filed for bankruptcy owing millions of dollars and leaving hundreds of customers in the dark.
With its sleek microfibre couches in neutral beige tones and dark Scandinavian-style wooden dining sets, UpCountry built its name on high design at moderate prices.
But the 15-year-old retailer became overextended after investing millions in a new King St. E. store and expanding into two new suburban locations in Vaughan and Burlington, the owner, Terry Iwaskiw said.
"We spent twice as much money as we had planned on the downtown store. And somehow I became convinced that opening two suburban stores was a good idea," Iwaskiw said in a telephone interview yesterday. "We overexpanded."
The company filed an assignment in bankruptcy on Wednesday, said Alan Shiner, a partner in the Richmond Hill firm of Shiner Kideckel Zweig, which is handling the bankruptcy.
The chain owes "millions," Shiner said, adding the final tally is still being calculated.
Hundreds of customers are affected, Iwaskiw said, adding that his main supplier is doing its best to ensure their orders get filled.
Most of what was sold in the store was made to order, he explained. Customers put down a deposit worth 50 per cent and paid the balance on delivery.
Elite Design Furnishings, of Concord, one of UpCountry's biggest suppliers, said it is trying to fill as many customers' orders as possible. "We've already helped a lot of people," said Elite Design's owner Rick De Groot, adding that he'd recently taken over the store in Vaughan Mills that formerly belonged to UpCountry.
But several customers told the Star they've had no luck finding out what has happened to their order.
Zachary Leung, 25, put down a $1,250 deposit on furniture he ordered three months ago from the UpCountry outlet in Vaughan Mills. But the pieces never arrived. A few weeks ago, he says he contacted the manufacturer, Gus Design, and was told his order should have been filled in about two to four weeks.
"It is disheartening to know they were open even up to the day before and still taking deposit money from customers who will obviously never get their furniture. I will most likely never receive mine, and thus am trying to find any means possible to get my deposit of $1,249.72 back," Leung wrote in an email.
Adding to the confusion for customers were reports that Elite Design Furnishings had taken over UpCountry's stores last August. Elite's De Groot said yesterday that's untrue. Iwaskiw said Elite was running the stores on his behalf while he oversaw the renovations at 310 King St. E. But he acknowledged that a formal sale of the company to Elite did not take place.
Leung said he was sorry to see the company close. "The store looks very high-end but when you go in the prices are not cheap but at the same time they're not as much as the real designer stores around the same area," he said.
Iwaskiw said problems fulfilling orders plagued the business after it expanded. "The infrastructure wasn't there to fulfil the orders," he said. "We went from being a $7 million-a-year business to a $17 million-a-year business."
The company's problems aren't related to a soaring loonie or the move to manufacture offshore, Iwaskiw said. In fact, his main supplier, Elite Design, had moved more of its production to China in recent years, he noted. "If we had stayed where we were at 214 King St. E., we would have been fine."
Instead, he moved down the street and plowed nearly $3 million into a loft-style store complete with concrete flooring, soaring ceilings and chrome and glass fixtures, at the same time as he opened two new suburban locations.
For Iwaskiw, who said he founded the business and designed many of the furniture collections, the closing is a sad occasion. "I have a lot of goodbyes to say to the staff."