Hooker Furniture to Purchase Sam Moore from La-Z-Boy

February 13, 2007  by in UnCategorized   

By Home Furnishings Business in Upholstery on February 2007 Hooker Furniture Corp. has signed a letter of intent to acquire Sam Moore Furniture from from La-Z-Boy Inc., the companies announced Tuesday. Under the terms, Sam Moore President Mike Moldenhauer would continue with the company.

La-Z-Boy had acquired Sam Moore, a 63-year-old Bedford, Va.-based manufacturer of upscale occasional chairs with an emphasis on fabric-to-frame customization, in 1998. The transaction, for an undisclosed amount, should close in second-quarter 2007.

Sam Moore’s upper-medium price range, dealer-base compatibility and item orientation make the company a “great fit,” according to Paul B. Toms Jr., chairman, chief executive officer and president of Hooker.

“This acquisition would help us attain one of our strategic goals to further diversify into fabric upholstery,” Toms said.

In 2003, Hooker acquired upscale leather seating company Bradington-Young. Toms said in a release that the combination of the two seating resources under the Hooker Furniture umbrella “would create approximately $100 million in annual upholstery sales for the company, and also would take our total revenues closer to the $400 million mark.”

Kurt L. Darrow, president and chief executive officer of La-Z-Boy, said, that while Sam Moore is a great company with an excellent product line and customer base, it doesn’t fit with La-Z-Boy’s long-term strategic direction.

Toms said he believes domestically produced upholstery has a good future, especially in customized goods--60 percent of Sam Moore’s business is special order.

“Sam Moore is well positioned with the interior design trade, which would further another Hooker strategic goal to strengthen business with the designer distribution channel,” Toms added.

According to the terms of the letter of intent, the acquisition would be a cash purchase of all Sam Moore assets, including property, plant, equipment, inventories and accounts receivable. Sam Moore’s has a 325,000-square-foot plant facility and corporate offices in Bedford.

“We are delighted at the prospect of becoming part of a Virginia-based company that is growth focused and enjoys the same fine tradition of high-quality furniture as Sam Moore,” Moldenhauer said. “This is a very positive announcement for our employees, customers and suppliers.”

Toms anticipated that Sam Moore would operate autonomously on a day-to-day basis.

Marketing and merchandising synergies the transaction would offer include rounding out the product assortment for Hooker’s SmartLiving ShowPlace retail galleries and complementing Hooker’s import accent chair business.

“We already have an $8.5 million business with our imported decorative chairs that are sold from our warehouse or through our container direct program,” Toms said. “We can visualize taking some of the best-selling frames in our current line and offering them with special order fabrics utilizing the expertise of Sam Moore.”