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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.

La-Z-Boy Earnings Drop Slightly

By Home Furnishings Business in on February 2006 La-Z-Boy posted a slight decrease in fiscal third-quarter earnings as it continued to deal with slower sales, but its profits still beat analysts' expectations, the company announced this week.

Earnings for the quarter ended Jan. 28 slipped to $10.5 million, or 20 cents a share, from $11.1 million, or 21 cents a share, during the same period last year. The earnings included 1 cent a share in restructuring costs.

The earnings topped the company's own forecast, as well as Wall Street's expectations. In November, La-Z-Boy forecast earnings of 13 cents to 17 cents a share, including the 1-cent restructuring charge. Analysts polled by Thomson First Call had an average estimate for earnings of 15 cents a share.

La-Z-Boy's sales, however, fell to $502.3 million from $507 million, just missing analysts' expectations of $503 million.

"Overall, we are encouraged with our results for the quarter, as they indicate that the execution of our strategy in our two largest business segments, upholstery and case goods, is progressing with the acceleration and speed we expected," said Kurt Darrow, president and chief executive officer.

La-Z-Boy, noting uncertainty about the overall economic environment, forecast flat fourth-quarter sales and earnings of 26 cents to 32 cents a share. Analysts target earnings of 31 cents a share and sales of $562 million for the fourth quarter. In last year's fourth quarter, the company earned 35 cents a share from continuing operations on sales of $565.6 million.

O'Sullivan, Creditors Agree on Reorganization Plan

By Home Furnishings Business in on February 2006 Ready-to-assemble furniture manufacturer O'Sullivan Industries Holdings Inc. has reached an agreement with a committee of unsecured creditors and controlling holders of secured notes due in 2008 on the company's plan for Chapter 11 reorganization.

Last Friday, the company also received approval for its amended disclosure statement from the U.S. Bankruptcy Court for the Northern District of Georgia. Later this week, copies of O'Sullivan's disclosure statement and reorganization plan, along with full details of the procedures for voting on the plan, are expected to be mailed to all parties entitled to a vote in the case.

O'Sullivan's plan incorporates a cash payment for general unsecured creditors and a potential additional settlement for all vendors and utility providers electing to participate, a warrant offering for senior subordinated notes due 2009, and the conversion of the secured notes into substantially all of the equity of the reorganized company and $10 million of new secured notes.

A confirmation hearing on the plan is scheduled for March 16.

"We are very pleased to have reached this consensual agreement on our plan of reorganization and the court's approval of our amended disclosure statement," said Rick Walters, O'Sullivan's interim CEO. "This is an important milestone in our Chapter 11 process and continues on our timeline to emerge from bankruptcy within the next few months."

Roswell, Ga.-based O'Sullivan has been in business since 1954 and had filed for Chapter 11 reorganization in October.

Global Furniture USA Moving Headquarters, Expanding Showroom

By Home Furnishings Business in on February 2006 Contemporary import specialist Global Furniture is moving into a new, 150,000-square-foot headquarters and warehouse in New Jersey to better accommodate growing sales.

The company's move from a 65,000-square-foot facility in Edison, N.J., to the new location in East Brunswick, N.J., will be completed by the end of February. Alex Rubinshteyn, managing director for the company, said the expanded warehouse will give the company the ability to provide its independent retail customers with immediate access to contemporary furniture.

"Although Global Furniture is known for its container shipments, our by-the-piece sales to independent retailers are growing significantly," Rubinshteyn said. "Our decision to expand our headquarters was made primarily to accommodate sales to our independent customers in the region, as well as to enlarger our international headquarters operation."

In other moves, the company has completed renovation of its new, 10,000-square-foot showroom in High Point at 118 W. Commerce St. The company will celebrate the opening during the April market.

"In spite of a challenging year for the industry, our business has enjoyed double-digit growth," Rubinshteyn said. "We made the decision to expand so we could have a place to showcase many more new products, as well as to accommodate a significant increase in retail traffic."

Donna Gunn Joins The Media Matters

By Home Furnishings Business in on February 2006 Donna Gunn has joined Lexington, N.C.-based public relations and communications agency The Media Matters in the new position of communications manager.

Gunn will direct all levels of client communications, including press releases, Web site copy and development, public relations communications, brochure and catalog copy and facilitation, and press kits.

Gunn has almost 20 years of administrative and marketing experience and most recently worked as an administrative and marketing assistant for Whitewood Industries in Thomasville, a furniture import/manufacturing company. Previously, she held administrative and marketing positions with both Lexington Furniture Industries (currently Lexington Home Brands) and Sealy, where her duties included communications for key executives, corporate catering and event planning for markets and other events, facilitation of marketing materials, and working with various shelter magazines to provide product for photo shoots.

"Donna brings us a broad range of skills and experience," said Kathy Wall, president and founder of The Media Matters. "She will round out our team with her strong written and verbal communications abilities. Our clients will benefit from having her involved in the creation and facilitation of their marketing materials."

The Media Matters' clients include home furnishings manufacturers, retailers, and well-known brands whose products are primarily supported by female consumers. The firm also provides services to non-profit organizations, technology, and brand management firms.
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