Alabama Beach Furniture Stores, Designers Among BP Oil Victims

In 2006, Worldwide Interiors, a Canal Road furniture importer, had a banner year with sales of $520,000, including $90,000 that June.

Last year, amid south Baldwin County’s deflated real estate market, sales dipped to about $330,000, including $21,000 in June, according to owner Keith Lee.

“We were beaten and battered, but we were still here,” Lee said. “We made it through what we thought was the worst of the recession, and we were poised to prosper.”

Then in late April the Deepwater Horizon rig exploded, oil gushed into the Gulf of Mexico, and, by mid May, business dried up. In June, Lee said, Worldwide Interiors had sales of $8,800 – not even 10 percent what it did four summers earlier.

As the real estate market goes, so go furniture sales. And with boom-era condo projects canceled and subdivisions scuttled by the dozen, several south Baldwin County furniture stores have closed in recent years.

Many of the survivors have milked their symbiotic relationship with the vacation rental market, counting on sunscreen-slathered and spill-prone renters to soil sofas, break lamps and scratch tables. But few renters this summer mean little wear and tear.

Count furniture stores and decorators – prominent players in the south Baldwin retail scene – among the businesses being leveled by the Gulf oil spill.

Less obviously intertwined with tourism than hotels and restaurants, they file their plight with the scores of businesses that face uncertainty when it comes to BP’s pledges to pay all “legitimate” claims.

Interior decorator Marcy Arnold said that although she’s stayed afloat by doing small jobs in friends’ homes, she hasn’t been hired to garnish a new condo – her bread and butter – in nearly two years and doesn’t expect that streak to end soon.

Last year, Henry Stuckey’s Orange Beach furniture shop, which carries his name, saw annual sales drop below $1 million for the first time since opening in 1996. Business seemed to be picking up earlier this year until the oil spill.

Since late April, sales have plummeted to about $4,000 a month and Stuckey said he is looking to downsize to a smaller shop.

At Coco Island Furniture, an 18,000-square-foot store about a half-mile east of Worldwide Interiors and Henry’s on Canal Road, sales in May were 30 percent off of last May’s mark, owner Jayson Foster said. June sales were half what they were the same month last year, and July should be about the same, he said.

“I wasn’t going to file a claim on 30 percent, but on 50 percent I’ve got to,” Foster said. “I don’t have a choice.”

Though Lee said he banked much of the mid-decade windfall, Worldwide Interiors, which includes the Orange Beach showroom and a Summerdale warehouse, will be bankrupt by spring without a lifeline.

So far, he’s received little from BP, he said. Like many business owners, Lee’s received a pair of emergency payments of $5,000.

Last month, he spent several hours with an adjuster in BP’s Foley claims office. He provided 2,500 pages of financial data covering five years.

Lee recently shared sales data with the Press-Register. A comparison between 2009 sales from May, June and July and the same months this year showed that with July winding down, he was roughly $62,000 down from last summer’s dismal sales of $98,000. Yet, Lee said, when BP’s adjusters applied their formula to his numbers – projecting a rosier late June and July than he’s actually experienced, reducing his expenses under the theory that it costs him less to run his store if there are no customers to serve – they said the oil giant owed him about $18,000.

Lee has yet to receive that money. And although he was briefly shown four pages of calculations BP told him were used to determine his damages, Lee said he was denied a copy.

One factor in BP’s formula was the fact that Worldwide Interiors narrowly beat last April’s sales this spring. Lee said he didn’t claim damages for April, but the adjusters noted the slight upswing and reduced his overall claim by the $877 month-to-month difference as if the spill had somehow prompted the sale of a dinette or two.

BP spokesman Ray Melick said the company won’t discuss individual claims but said that complaints and delays have been the exception in the claims program.

“We’ve had people come in the morning and get a check in the afternoon,” Melick said. “A lot of it has to do with the complexity of the claim itself – the farther you get away from the water and the obvious claims, the more difficult it gets.”

As of Wednesday, BP had paid claims totaling more than $18.4 million in Baldwin County, Melick said.

Orange Beach Mayor Tony Kennon said that about 132,000 claims have been filed in Baldwin County since oil began gushing into the Gulf. And if $18.4 million is divided by that amount, the mayor said, it works out to less than $150 for each claim that’s been filed.

“It’s very frustrating to me to know that we have a company capable of drilling at 5,000 feet with a $700 million drill ship,” Kennon said, “but in 12 weeks, they can’t put a claims process together that’s competent and customer friendly.”

Topics Claims Energy Oil Gas Alabama