Walter E. Smithe Furniture & Design, the 80-year-old Chicago retailer that turned three brothers into celebrity pitchmen, is embroiled in a legal family feud.
Tim Smithe, 62, the former chief marketing officer and co-owner who appeared with his two brothers in countless TV commercials, is suing the company for allegedly squeezing him out of the family-owned business nearly a decade ago in an undervalued buyout.
The lawsuit, filed Monday in Cook County Circuit Court, alleges Walter E. Smithe III, the president and controlling shareholder of the Itasca-based company started in 1945 by their grandfather, “fraudulently induced” Tim to sign away his $14 million equity stake for a $1.8 million payout.
“My brother coerced me out to make room for his four daughters,” Tim told the Tribune.
Once a ubiquitous presence on local TV and a one-third owner of one of Chicagoland’s most successful furniture retailers, Tim – the middle brother between Walter and Mark – is now a long way from the limelight as an unemployed bus driver in Wichita, Kansas.
Tim said he is broke and in need of a job, while the family-owned business he left “under duress” is thriving. The lawsuit is seeking a rescission of the 2016 buyout agreement and restoration of his equity stake in the company, along with nearly $10 million in retroactive pay and distributions and $20 million for alleged equity skimming by Walter.
Tim and his wife, Mary Astor Smithe, filed the pro se lawsuit without the assistance of an attorney.
Walter, 66, whose four daughters are now the fourth generation faces of Walter E. Smithe Furniture & Design, issued a statement Wednesday in response to the lawsuit.
“We were surprised by his filing, especially since the terms of his retirement ten years ago were amicably and voluntarily signed,” Walter said. “The original agreement was negotiated by well-respected attorneys in Chicago, ensuring a fair process. We are now focused on resolving this new matter with our brother quickly and in good faith. We are confident the case will be promptly dismissed.”
For years, Walter, Tim and Mark were the often-besuited TV spokespersons, whose playful on-camera interactions backed by a catchy jingle — “Walter E. Smithe, you dream it, we build it” — branded the furniture brothers into the collective unconscious of Chicago viewers.
Walter was the president, Tim was in charge of marketing and Mark, an attorney, served as general counsel. All three had equal stakes in the company and starring roles in the TV commercials. Together, they helped turn the furniture chain into a major regional retailer with nine Chicago-area stores, one in northwest Indiana and a new location in Naples, Florida, which opened earlier this year.
Annual sales at Walter E. Smithe grew from $700,000 when Tim joined the family furniture business in 1985, to $100 million per year when he left in 2016, according to the lawsuit.
Growing up in Park Ridge, the three brothers shared a basement bedroom where older brother Walter sometimes settled disputes by smothering Tim with a beanbag chair, according to a 2005 Tribune article.
In some ways, that dynamic persisted into adulthood, with Tim alleging in the lawsuit “decades of abuse, coercion, betrayal” at Walter’s hands, which resulted in emotional distress and eventually, his exit from the company.
Tim agreed to the buyout to escape a “toxic dynamic” under his older brother’s leadership, according to the lawsuit. The signing of the “redemption agreement” lasted five minutes in Walter’s Itasca office, relinquishing all equitable interest in the company in return for a $1.8 million consulting agreement to be paid out over 10 years.
Unbeknownst to Tim at the time, the furniture retailer had been appraised at $42.4 million in 2015 by an outside firm, valuing each brother’s stake at $14.1 million. At present value, that would be worth $30 million today, the lawsuit stated.
Tim, who holds an MBA from Northwestern’s Kellogg School of Management, currently has a much lower net worth. He is looking to the lawsuit to improve his fortunes and restore his place in the family business.
“This was a family legacy, and my contribution to it, they literally erased it. If you go to smithe.com, you’ll see that I’m not even mentioned, and they took down my photographs,” Tim said. “It hurts.”
His most significant contribution was as the creative force behind and in front of the camera for the Walter E. Smithe TV commercials, which began blitzing the Chicago airwaves in 2002. The commercials featured the three brothers doing everything from recreating music videos and hobnobbing with celebrities to breaking out “Star Wars” light sabers in a mock fight scene.
One memorable spot in 2010 featuring the brothers as babies in high chairs won an Emmy.
Paying $1,000 for the jingle, which Tim selected from a California music studio, proved to be a particularly good investment for the furniture retailer. The tune, which came into use in the late ’90s, created an inescapable earworm on Chicago radio and TV for two decades.
After Tim’s exit from the business, Walter installed his daughters – Colleen, Caitie, Meghan and Maureen – as executives and the new sibling spokespersons for the furniture chain. The four sisters became the next generation of commercial stars for Walter E. Smithe, while ditching the signature jingle.
Meanwhile, bound by a noncompete agreement, which barred him from working in the furniture industry, Tim took his career in a new direction.
Tim worked briefly as vice president of sales for Modern Luxury, a Los Angeles-based magazine publisher, ending a six-month run there in 2019. That’s also where his LinkedIn resume ends.
“I would have liked to help run a furniture chain, but the noncompete was 10 years and it was tight, it was brutal,” he said.
Three years ago, Tim and his wife moved to Kansas to help rehab a house his daughter bought. The couple decided to stay and the former furniture magnate and TV pitchman became a bus driver for Village Travel, a Wichita-based charter company.
There have since been attempts at reconciliation and a return to Chicago.
When Walter E. Smithe Jr., who took over the family’s Chicago appliance store and expanded it into the eponymous furniture chain before handing the reins to his three sons, died in October 2022, the estranged brothers reconnected at the funeral.
In January 2023, Tim reached out to his older brother in an email, saying their father had visited him in his dreams, urging them to “mend fences.” Tim said he also pitched the idea of returning to the family business as a paid store greeter, something their father had done in semi-retirement.
Walter rebuffed his younger brother in an emailed response, wishing him well but saying “too much has changed” to work together again, according to the email, which Tim provided to the Tribune.
Tim has suffered a number of hardships in recent years, including losing his son, Timothy Jr., who died at age 31 from a heart condition in 2018. At the time, Tim and his wife were living on food stamps in a Ford Ranger pickup camper in Death Valley, California, and didn’t have enough money to attend the funeral.
Last year, they had their gas, water and electricity turned off for lack of payment at their house in Wichita. As their lives were hitting rock bottom, Smithe and his wife, an aspiring gospel singer, had a spiritual awakening. They baptized each other and the furniture retailer turned bus driver asked Jesus to “take the wheel,” he said.
Then in June, Tim suffered a hernia while loading bags on a bus and is now on disability leave.
“I am currently injured, not working, and I have no income,” Tim said. “I’m looking forward to February, starting on Social Security. Never in a million years did I think I’d be in this financial position.”
Last month, Tim received a letter from his younger brother Mark, demanding a release of all claims and extending a “gag order” in perpetuity in return for $49,000 in debt forgiveness for a previous tax loan. Instead, Tim and his wife decided to file the lawsuit seeking millions in damages and the restoration of his one-third stake in the family furniture business.
Informed of the lawsuit by the Tribune, Walter’s statement reflected the complexity of an internecine battle between brothers whose business collaborations evolved from newspaper delivery routes, yard work and selling ice cream to building one of the biggest furniture retailers in Chicago.
“This is a difficult situation,” Walter said in his statement. “Despite these circumstances, Tim is family, and we wish him and his wife the very best.”
Beyond his renewed faith, Tim is hoping the lawsuit will set right what he contends was a career-ending wrong nearly a decade after he was cast out from the family business.
While the lawsuit did not contemplate restoring his old job as marketing director at the furniture chain, after a “humbling” riches-to-rags journey, Tim has a newfound appreciation for what he now sees as the gig of a lifetime – creating memorable commercials with his brothers.
“I had the greatest job in Chicago, well paid, chief marketing officer, director of advertising for Walter E Smithe,” Tim said. “I was good at it. I was winning Emmys. I was writing commercials. Who would walk out on that unless there was a hidden reason?”
rchannick@chicagotribune.com