Merinos Home Furnishings has decided against opening an 850,000-square-foot retail showroom here, opting instead to lease out the property it acquired earlier this year.

Michael Bay, owner of the home furnishing retailer with large stores in Mooresville, N.C., Jefferson, Ga., and Fort Lawn, S.C., contended that Jamestown, N.C.-based Furnitureland South pressured certain suppliers - including A.R. T. Furniture and Furniture Brands International companies Henredon and Maitland-Smith - not to sell Merinos at the nearby location.

Asked to comment on that charge, FLS Executive Vice President Jason Harris said in an email, "We don't make distribution decisions for our suppliers. I'm sure they take many factors into consideration when choosing their retail partners."

Furniture Brands declined to comment.

A.R.T. Senior Vice President of Sales and Marketing Bill Sibbick said A.R.T. primarily was selling Merinos closeouts at the Mooresville location. Before making any decisions, it had heard that Merinos had decided to lease out the Winston-Salem location.

"Merinos never came up in conversations with Furnitureland South," Sibbick said.

"We make distribution decisions all over the country, and those are decisions we make on our own."

Earlier this year, Merinos paid $3.2 million through a holding company for the former Hanesbrands textile mill property in Winston-Salem for what was to become its fourth large showroom. The plan was to open in two phases with the work wrapping up this past month.

But Bay now says the latest incident has soured him on the furniture industry altogether and that he's finished expanding his retail operations.

"I'm going to do exactly what I was doing before, but I won't open any more," he said. "I will buy more buildings, improve them and lease them out."

For his furniture business, Bay said he carries millions of dollars in inventory to make a 3% to 4% profit, and that he will do much better in commercial real estate.

He said he already has lined up a tenant for the Winston-Salem property, adding that the company will move in in March. He declined to disclose the tenant's name.

In 2011, Bay opened the first phase of his third store in Mooresville, N.C., inside a 1.1 million-square-foot former textile mill that is more than 100 years old and has multiple buildings. Bay said he has since built out about 500,000 square feet in the mill for his current furniture business there, and "that's more than enough." He is leasing out additional space in the mill.