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Bankruptcy Claimed Their Jobs, and Now They’re Out for Payback

Workers usually end up with nothing when private equity shutters a company. At Art Van Furniture, they’re flipping the script.
Former Art Van Furniture employee Joey Tallmadge.

Former Art Van Furniture employee Joey Tallmadge.

Photographer: Erin Kirkland for Bloomberg Businessweek

Art Van Elslander, the son of an immigrant, briefly served in the Army, returned home to Detroit, and started a family and a business. He began in 1959 with one furniture store on the corner of Gratiot Avenue and 10 Mile Road in what was then called East Detroit. By 2015 he owned the biggest and most popular furniture retailer in the Midwest, with almost 100 stores, 3,700 employees, and $725 million in sales. That year, Patti Smith wrote in her memoir about hanging out in Art Van stores for the free coffee and doughnuts. Van Elslander and his wife had 10 children, two of whom worked at the company. He became a community leader and philanthropist. He endowed a foundation focused on children and health. He saved the city’s 1990 Thanksgiving Day parade with a last-minute $200,000 check.

His was a classic American story. So is what happened next. Online shopping wasn’t a priority at Art Van, and by 2017, Van Elslander knew the company couldn’t compete against Wayfair Inc. and Inc. without significant investment. He was 86, ready to step back, and, with 10 heirs, it seemed easier to look for a new owner. Before the year was over, he sold the chain to a private equity firm, Thomas H. Lee Partners LP, for $215 million. “There is still much I want to do,” he said in the announcement. “I feel confident knowing the company and its people will be in the very best of hands for continued growth and success.” He died the following year.