The furniture sector still faces financial distress, business closings, and bankruptcies despite a year of recovery in 2025.
After a two-year decline in sales, the furniture industry recovered in 2025 as combined sales of the Top 100 furniture retailers increased by 0.9% to $51.2 billion compared to the previous year, according to Furniture Today.
Positive sales numbers have not been enough to stop furniture companies from filing for bankruptcy protection, though, including mattress and furniture retail chain Ortho Mattress, which filed for bankruptcy on June 1; Humble, Texas-based SuperNova Furniture, which filed for Chapter 11 protection to reorganize its business on April 15, and No Bull Mattress & More chain owner Mattress Warehouse of Charlotte Inc., which filed bankruptcy on Aug. 24.
Southern Motion files Chapter 11
And now, 30-year-old furniture company Southern Motion filed for Chapter 11 bankruptcy, facing significant financial and operational headwinds that included weaker consumer demand, increased manufacturing costs, and a burdensome, above-market master lease, according to court documents.
The Pontotoc, Miss.-based manufacturer of recliner furniture filed its petition in the U.S. Bankruptcy Court for the Northern District of Mississippi on Aug. 31, listing $50 million to $100 million in assets and debts.
Southern Motion blamed a slow retail furniture market tied to weak housing demand for a slowdown in customer traffic, according to a declaration filed by the company’s Chief Restructuring Officer David Baker of Aurora Management Partners Inc.
The debtor also cited increased manufacturing costs related to tariffs and costs of fuel and container rates resulting from geopolitical events, such as the war with Iran, the declaration said.
Above-market lease burden
The furniture manufacturer was burdened with an above-market master lease for more manufacturing facilities than it needed for its operations and seeks to reduce or eliminate lease obligations it can no longer afford.
The debtor, which employs 645 full-time workers, currently operates four manufacturing facilities in Pontotoc, Miss., one in Ecru, Miss., and one in Baldwyn, Miss. The company did not indicate whether any jobs will be affected by the Chapter 11 filing.
Landlord seeks eviction
Southern Motion’s landlord filed two eviction proceedings against the manufacturer seeking to evict the company from facilities in Lee and Pontotoc counties, which were approved by court orders on Aug. 6 and Aug. 9, respectively, and set to take effect the day the debtor filed for bankruptcy.
All litigation against the debtor is subject to an automatic stay while the bankruptcy case proceeds.
Southern Motion‘s largest unsecured creditors include Kuka Trade Co. Ltd., owed over $4.6 million; Remacro Technology, owed over $875,000; Superb Creation Ltd., owed over $281,000; Landstar Ligon Inc., owed over $235,000; and FXI Inc., owed over $223,000.
Southern Motion was founded in 1996 by Guy Lipscomb and Larry Todd and became the first and only major furniture manufacturer to introduce broad customization options across its product lines, the declaration said.
Man Wah buys Southern Motion
Hong Kong-based furniture manufacturer Man Wah Holdings Ltd. acquired Southern Motion’s parent company Gainline Recline Intermediate Corp. in December 2025 and paid off Southern Motion’s secured debt obligations owed to JPMorgan Chase & Co.
The company did not have any secured debt obligations as of the petition date. The company’s largest unsecured debt is owed to its landlord under the master lease.
Southern Motion is seeking court approval of up to $6 million in debtor-in-possession financing from Porter Capital Corporation under a factoring arrangement secured by unencumbered assets of the debtor. The debtor expects to use no more than $5 million in the first 30 days of the bankruptcy case, according to a post-petition financing motion.
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