Daily News Archive
Brought to you by Home Furnishings Business
June 8,
2008 by in UnCategorized 
By Home Furnishings Business in Furniture Retailing on June 2008
Hundreds of executives from the furniture industry’s largest companies gathered in New York Thursday to honor three recipients of top Anti-Defamation League (ADL) awards.
During the event at the Grand Hyatt in Manhattan, the ADL’s American Heritage Award was presented to AICO Founder and CEO Michael Amini and Havertys President Clarence Smith. The award recognizes unwavering commitment to humnanitarian goals and dedication to the community. Primo International Founder Hymie Itzkovitz received the Lifetime Humanitarian Award for teaching others to live “by the principles of good citizenship and devotion to the community.”
Keith Koenig, president of City Furniture, Tamarac, Fla., presented the American Heritage Award to Amini, who received the City of Hope’s Lifetime Achievement Award in 2004. AICO (Amini Innovation Corp.) has grown to employ more than 20,000 people. The City of Hope research hospital recently broke ground on the Michael Amini Transfusion Center.
Havertys Chairman Clancy Ridley was the presenter for the American Heritage Award to Smith, who heads the 123-store chain based in Atlanta as president and CEO and serves as chairman of the Catholic Foundation of North Georgia, vice chairman of the Marist School Board and is on the board of Oxford Industries.
David Itzkovitz of Primo International presented the Lifetime Humanitarian award to his father. The senior Itzkovitz escaped the German and Russian Armies as a boy in Poland and has led Montreal-based Primo to be one of the largest suppliers of upholstery.
Founded in 1913, the Anti-Defamation League is the nation’s premier civil rights/human relations agency fighting all forms of bigotry. The organization defends democratic ideals and protects civil rights in America and around the world.
June 8,
2008 by in UnCategorized
By Home Furnishings Business in on June 2008
• Last week finished badly, with employment, stocks, gas prices and home foreclosures all hitting sour notes. The U.S. Bureau of Labor Statistics (BLS) reported the overall May unemployment rate jumped half a point to 5.5 percent as 49,000 Americans lost their jobs.
In the home furnishings sector, May manufacturing employment of 502,500 was off 0.6 percent from April. Compared with May 2007, home furnishings manufacturing employment fell 6.7 percent. On the retail side, employment inched up 0.1 percent in May versus April, to 570,100 jobs. That’s a decline of 1.8 percent from May of last year, BLS reported.
• On Friday, the Dow Jones Industrial Average fell nearly 400 points, finishing at 12,209.81, off 3.1 percent. The price story on furniture stocks was mostly down, although some companies, such as vendor Hooker Furniture, managed to gain in this unsteady economic climate. Hooker closed at $20.62 per share, a 1.08 percent increase in price.
• Oil prices, after appearing to stabilize earlier in the week, finished at nearly $140 a barrel on Friday. According to one pundit, the increase in the cost of a barrel of oil last week equaled the total cost of a barrel in 1999.
At the pump, AAA and the Oil Price Information Service reported that the national average price for a gallon of regular gas rose to $4.005 on Sunday from $3.988 the day before. This is the first time the average hit $4 a gallon, and some economists are predicting $5 gas by summer’s end.
• More than 1 million homes are now in foreclosure, the highest rate ever recorded, according to a Mortgage Bankers Association (MBA) report. After studying first quarter figures, MBA said that a record 2.5 percent of all loans serviced by its members are now in foreclosure. Doing the math, that means the loans on about 1.1 million homes are in trouble. That’s up from 2 percent of home loans in foreclosure at the end of 2007.
According to the report, homeowners holding nearly 3 million home loans, or 6.4 percent of all loans, have missed at least one mortgage payment.
Weekly Review of Economic News (WREN) reports are summaries of recently-released economic statistical data that affect the home furnishings industry. WREN reports are compiled by
HFB Research Editor Janice Chamberlain.
June 8,
2008 by in UnCategorized
By Home Furnishings Business in Home Theater on June 2008
Upholstery manufacturer Berkline and Brunswick Billiards are teaming to create a new line of home theater seating for Brunswick that represents the company’s first effort in this fast-growing home entertainment category.
“Home theater seating is the most exciting and explosive growth segment in upholstered furniture today,” said Grey Hunsucker, Berkline vice president and national sales manager. “Dedicated rooms with flat screen TVs and upscale video equipment are becoming commonplace in the housing market both in new construction and remodeling.”
Installed home theaters and multi-room audio systems are expected to grow from $6 billion in 2007 to more than $11 billion in 2012, according to Parks Associates.
“We know home entertainment,” said Debbie Groshek, managing director, Brunswick Billiards. “The home seating category is an ideal fit for Brunswick’s dealers and customers.”
Three home theater seating styles will be built by Berkline for Brunswick. Two versions will be contemporary styling, the third a transitional model. Prices will start at $1,249 MSRP per seat and will be available for shipment in early summer 2008.
The product was unveiled April 22 at Brunswick’s Business Enrichment Conference. The conference is an annual convention of Brunswick’s dealer network, which will sell the product in Brunswick’s more than 300 dealer locations throughout the United States and Canada.
The product will also be available for purchase through Brunswick’s Web site, www.brunswickbilliards.com
The Berkline-Brunswick home theater seating partnership combines Berkline’s reputation and depth of manufacturing experience with Brunswick’s extensive marketing expertise, brand-name recognition and strong dealer network.
“Berkline is by far the largest producer of home theater seating in the industry,” said Hunsucker. “Our history of success in this product line was a major factor in bringing Berkline and Brunswick together. Our partnership with Brunswick is a tangible example of Berkline’s focus on staying on the leading edge of industry innovation and creativity.”
Hunsucker added that Brunswick’s dealers will be a key factor in the success of the new line.
“The Brunswick retail format is exciting,” he said. “The company’s dealers create an experience for the consumer, and their sales associates are well-trained and knowledgeable of their products. We believe Brunswick’s desire to enter this new business, coupled with their proven marketing capabilities and Berkline’s strength in the home theater seating category, are winning formulas for all parties.”
June 8,
2008 by in UnCategorized
By Home Furnishings Business in Case Goods on June 2008
Case goods manufacturer Crawdford Furniture, Jamestown, N.Y., opened its fourth Western New York store in Williamsville on Friday, according to a report in the
Jamestown Post-Journal.
The 20,000-square-foot store, which should employ up to 25 people, will specialize in Crawford’s bedroom, dining and occasional furniture in solid oak, ash, maple and cherry.
The store also carries upholstery from Simmons, Masterfield, Best and England; and bedding from King Coil, which includes the Jaclyn Smith and Laura Ashley collections.
Crawford Furniture also has three 25,000-square-foot stores in the Jamestown, Hamburg and Amherst areas carrying the same lines as the new Williamsville location.
June 8,
2008 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on June 2008
Pier 1 Imports is on the prowl and looking to acquire one of its primary competitors, Cost Plus.
Pier 1 Imports sent a letter to Cost Plus over the weekend proposing to acquire all outstanding shares of Cost Plus common stock in a stock-for-stock transaction. Pier 1 said a transaction could be completed in the third quarter of this year.
Under the terms of the proposal, Pier 1 Imports Inc. would issue 0.6 shares of its common stock for each share of Cost Plus common stock. Based on the closing prices of Pier 1 Imports and Cost Plus on June 6, 2008, the proposed exchange ratio implies a value of $4 for each share of Cost Plus common stock.
The offer represents a premium of approximately 31% over the Cost Plus closing price on June 6, 2008, and a premium of approximately 34% over the average closing price of Cost Plus shares for the last 30 trading days.
Cost Plus has 292 stores in 33 states. As of March 1, Pier 1 operated 1,117 stores in the United States and Canada.
“We believe that the combination of Pier 1 Imports and Cost Plus is extremely compelling and would create significant value for the stakeholders of both companies,” said Alex W. Smith, president and chief executive officer. “Given our similar customer bases and broadly similar business models, but distinct market positions, we believe Cost Plus is an excellent fit with Pier 1 Imports. We are confident that combining our two companies would create a stronger and more competitive company that is better positioned for future growth.”
Cost Plus has confirmed it received the bid and called the offer to buy the company as a “non-binding, highly conditional proposal.” The retailer’s board will review and discuss the offer “in due course,” according to a statement released this morning.
Pier 1’s Smith went on to say a merger would result in improvements to Cost Plus’ operating margins and create synergies, including organizational efficiencies in supply chain management, shared services, store operations and other general administrative costs.
“Given our track record of execution and our sound financial condition, we are confident that our management team can deliver long-term growth and profitability to shareholders of the combined company,” Smith said. “We are committed to working together with the Cost Plus Board of Directors to promptly execute a definitive agreement, and look forward to capitalizing on the exciting prospects this combination will create.”
Pier 1’s fourth quarter results released in April showed net income for the quarter of $13.7 million and a $96 million loss for the fiscal year.
In its letter to the Cost Plus board, Pier 1 outlined the benefits it sees to such a merger. They include:
• While Pier 1 has made significant progress since its current management team was augmented in 2007, Cost Plus results have continued to deteriorate through multiple management changes to date. As a result, Cost Plus’ stock price has declined as the company has struggled unsuccessfully to restructure its business, while Pier 1’s stock has retained its value in the face of the same challenging environment. In fact, over the last six months, Pier 1’s stock price has appreciated 64.7 percent, while Cost Plus’ stock price has declined 13.1 percent;
• Absent a transaction, Cost Plus is likely to face increasing liquidity problems. Pier 1’s financial condition is sound and it has a committed $450 million asset-based lending facility that should be sufficient to provide future operational liquidity for both companies. Pier 1 is confident that Cost Plus’s shareholders would prefer a combined company focused on long-term growth and profitability rather than a stand-alone Cost Plus preoccupied with simply reaching positive cash flow;
• Over the last year, Pier 1 management has achieved about $160 million in cost savings as a result of efforts to reduce marketing expenses, payroll and other general administrative costs. Based on publicly-available information, and Pier 1’s expectation of the combined benefits of a Pier 1-Cost Plus transaction, Pier 1 believes that it can achieve cost savings in the range of 5 percent of sales of Cost Plus (approximately $50 million), which is consistent with comparable retail transactions. Pier 1’s management is confident that the combination would result in improvements in Cost Plus’ operating margins, providing an opportunity for Cost Plus shareholders not only to participate in the turnaround of Cost Plus’ business, but also to reap the benefits of a larger, more efficient company that has the potential to once again achieve our companies’ historically high operating margins, and
• Pier 1’s management team is well equipped to implement a speedy turnaround at Cost Plus. Pier 1’s senior management has experience operating multi-divisional companies, both at Pier 1 and externally, and can leverage our current systems to effect a smooth and efficient integration of our businesses.
The proposal is subject to due diligence, which Pier 1 said it is prepared to begin immediately, negotiation of a definitive acquisition agreement and shareholder and regulatory approval.
Pier 1 also said it is ready to deliver a draft merger agreement to Cost Plus and begin discussions immediately.