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Office Depot Expands Retail to South Korea

By Home Furnishings Business in on February 2006 Office Depot has acquired controlling interest in Best Office Co. Ltd., one of the top office supply companies in South Korea.

Best Office, which has annual revenues of more than $44 million, operates a network of more than 70 franchised and company-owned retail stores, along with a complementary delivery sales business.

"This transaction strengthens Office Depot's global presence in a rapidly growing area of the world," said Steve Odland, chairman and chief executive officer of Office Depot. "Our investment in Best Office, with its demonstrated history of sustainable and profitable growth, not only allows us to continue our geographic expansion, but extends our ability to deliver innovative products and services to customers of all sizes in the South Korean market."

Jang-Duk Sun, president and chief executive officer of Best Office, said the new relationship will allow us to further differentiate their business from the competition by offering customers more value and unique assortments.

The transaction is subject to normal regulatory approvals.

Serta Announces New Headquarters Plans

By Home Furnishings Business in on February 2006 A state-of-the-art 90,000-square-foot facility, located in the Chicago suburb of Hoffman Estates, Ill., will serve as the new home for Serta International, the mattress manufacturer announced this week.

With a construction start scheduled for this spring, Serta expects the new larger building -- which will replace its existing 17,000-square-foot headquarters -- to open in the summer of 2007.

According to Serta, the new facility will not only house the company's 110 corporate employees, but also include a cutting-edge showroom and a research center where new designs and components will be tested and evaluated.

"We are especially excited to be breaking ground on our new international headquarters right now because this year marks Serta's 75th anniversary – a year in which we are celebrating all that Serta has achieved since its founding in 1931," said Barbara Bradford, senior vice president of marketing for Serta International. "This new space also signals the next phase of Serta's global growth."

Hooker Restates 4Q Earnings

By Home Furnishings Business in on February 2006 Hooker Furniture announced this week that it understated net income for its fourth quarter, that ended Nov. 30, 2005, by approximately $658,000.

The revision to the Jan. 12 news release, resulting mostly from an overstated advertising program costs and group insurance expense for the 2005 fourth quarter, states a combined $1 million of additional pretax income.

Hooker's revised net sales for the 2005 fourth quarter are $90.2 million and $341.8 million for the 2005 fiscal year. Net income for the 2005 fourth quarter as revised is $4 million, and revised net income for the year is $12.5 million.

Hooker accounts for certain of the advertising program allowances in question as a reduction in net sales. When accounting for these programs, the company recorded some of those costs before an actual liability was incurred. The effect of this error was not material to results of operations in the current or any prior period.

The decrease in group insurance expense was the result of a correction to the accrual for the month of November 2005.

In addition, Hooker revised its 2006 first-quarter net sales estimate to a range of 2 percent lower to 2 percent higher than its strong first quarter sales in 2005. The revised forecast is based upon better-than-anticipated shipments thus far in the quarter.

Hooker will hold its annual shareholders meeting at 2 p.m., Friday, March 31, at Piedmont Arts Association, 215 Starling Ave., Martinsville, Va.

Quaker Loses $25.4 Million in 2005

By Home Furnishings Business in on February 2006 Quaker Fabric Corp. reported a $4.8 million loss in fourth-quarter 2005 on sales of $50.1 million, compared to a $1.9 million loss on $68 million in sales during the prior-year period.

For fiscal 2005, the leading woven upholstery manufacturer and largest jacquard producer in the world had sales of $224.7 million and a loss of $25.4 million, compared to $289.1 million in sales and a $2 million loss in 2004.

"Last year was a major disappointment for Quaker. Our biggest problem was sales," said Larry Liebenow, president and CEO. "The continued strength of imported leather, faux suede and woven fabrics in the U.S. market led to a 22.3 percent fall-off in our total revenues -- with domestic and international fabric sales for the year of $173.6 million and $29.3 million, down 25.4 percent and 18.4 percent, respectively."

Net yarn sales, he added, were up 6.7 percent to $21.8 million for the first eight months of 2005, but craft yarn orders slowed in September and remained weak.

Liebenow said the company did achieve some important objectives in 2005: an annualized cost-structure reduction of $40 million; consolidation of four manufacturing and warehousing facilities into a fifth location; a new senior secured credit facility; total funded debt reduction of $2.1 million; and a price increase in March and surcharge in October to offset increases in energy and raw material costs.

"At the end of the day, however, the 22.3 percent drop in our revenues outpaced the cost reduction measures we were able to implement," Liebenow said.

In 2006, Liebenow said Quaker would focus on stabilizing revenues from its core domestic residential business, while complementing that with new products, including the launch of its first sourced fabric collections; development of outdoor and contract fabrics best-produced domestically; and continued cost reduction through consolidating operations in its Fall River, Mass., operations.

Ikea Comes to Florida

By Home Furnishings Business in on February 2006 After several years of searching for the right location, the world's most popular Swedish home furnishings retailer's first store in the Sunshine State will open next year.

The future site will be Sunrise, Fla., Ikea officials said earlier this week.

Ikea announced Tuesday its plans to open a 293,000-square-foot store in the southern Florida location in summer 2007, with construction scheduled to begin as early as this spring on their 20 acre site.

The popular retailer currently operates 26 of its 225 stores in the United States.
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