Daily News Archive
Brought to you by Home Furnishings Business
May 2,
2011 by in UnCategorized 
By Home Furnishings Business in Mattresses on May 3, 2011
Bedding vendor Kingsdown Inc. will introduce its new Bedmatch technology at Interzum, May 25-28.
Based on documented sleep research, including the recent Mattress Matters study conducted in collaboration with Research Triangle International and Doctors Krystal and Edinger the company worked with Sleep to Live Institute scientists and engineers to develop a unique and innovative diagnostic system that uses statistical measurements and calculations to help consumers pick the best mattress for them, regardless of brand or price point.
Drawing on more than 15 years of research and development and 6 million profiles, the Bedmatch system uses 18 statistical measurements and over 1,000 calculations to assist the consumer in determining the best mattress and pillow options for their body type. By accommodating multiple mattress brands, Bedmatch is "brand agnostic" and its technology has been proven to boost consumer satisfaction. Printed recommendations give RSAs an easy reference guide to help consumers select the purchase option that best fits their postural support requirements. Retailers can offer the interactive technology in one of three in-store execution models.
"Bedmatch uses cutting edge technology to change the way people shop for mattresses," said Eric Hinshaw, chairman and CEO of Kingsdown, Mebane, N.C. "American retailers who have introduced the Bedmatch process in their stores have seen their close rate jump to 58 percent and their average sale increase to over $2,400. We are excited to have Bedmatch make its global debut at Interzum."
May 2,
2011 by in UnCategorized
By Home Furnishings Business in Acquisition on May 3, 2011
The sale of High Point's
International Home Furnishings Center is complete.
Bassett Furniture Inds.
(Nasdaq:BSET) announced today the total value of the deal was $275 million which includes $175 million in contemplated cash proceeds for Bassett and its partners, and the assumption of $100 million of existing IHFC debt by the acquirer.
After set-aside escrows for an ongoing tax audit of IHFC and representations and warranties, legal fees and other transaction costs, Bassett realized a pre-tax distribution of approximately $74 million from the sale.
In the transaction, Bassett invested $2.4 million in return for a minority stake in the newly formed company, International Market Centers, L. P. (IMC). IMC's initial portfolio of assets consists of a total of 13 buildings encompassing more than 10 million gross square feet, including the IHFC and the Market Square Complex in High Point as well as all of the
World Market Center buildings in Las Vegas. This platform constitutes the world's largest network of premium business-to-business home furnishings, gift, and home décor showroom space.
IMC is majority owned by funds managed by
Bain Capital Partners and a subsidiary of certain investment funds managed by
Oaktree Capital Management, L.P. Joining Bassett as investors in IMC are the
Related Companies and affiliates of Network World Market Center.
Bassett made an investment in the IHFC more than 25 years ago. That investment has paid off over the years, primarily in the form of IHFC dividends that were paid to its shareholders.
"This transaction represents a successful conclusion to that investment and is a testimony to the sound management practices employed by the IHFC leadership and its associates, especially in a difficult period for the home furnishings industry," said Robert H. Spilman Jr., Bassett president and CEO. "Despite the fact that most of its competitors were in financial disarray, the IHFC has remained profitable throughout the recession. On behalf of Bassett and its partners, I thank current and former IHFC management and associates for a job well done. I feel confident that as part of the newly formed International Market Centers, L.P. that the IHFC will carry on its long standing tradition as the world's most successful home furnishings wholesale showroom entity."
Bassett plans to adopt a series of strategies in utilizing the proceeds from the transaction designed to improve financial performance and enhance shareholder value. Management has considered and will continue to evaluate a number of options that can benefit the company and its shareholders.
"The IHFC has provided us with a unique ability to positively impact Bassett's future. Most of all, our board of directors and management acknowledge the responsibility we have to be good stewards of these funds and firmly believe that we should be measured in our deliberations in regards to our use of these liquid assets," Spilman said.
In the short term, a portion of the funds will be used to settle selected ongoing obligations pertaining to closed store real estate in cases where these actions will result in substantial cash savings for the company. Similarly, Bassett will seek to reduce or eliminate other various debts that are subject to interest rates that are unfavorable in today's rate environment and can provide additional opportunities to improve ongoing cash flow. In considering potential scenarios for the allocation of this capital, Bassett has engaged financial advisors and also received input from many of its shareholders.
Regarding future investments in operations and growth, Bassett plans to invest cautiously in the opening of two or three stores over the next several months. Since its inception in late 2007, the company's new store prototype has performed significantly better than its original store format.
"Because of the economic recession and capital restraints, we have been conservative with new store openings," Spilman said. "Furthermore, bank financing for most U.S. furniture companies is limited to nonexistent in today's environment. To date, we have opened seven of the new prototype and have converted a similar number of our old ones. Accordingly, we will continue to analyze the return generated by our new store prototype on a location by location basis until we are satisfied that a larger number of openings is justified and can be internally financed. We have learned a lot about operating our stores through these very tough past several years. And we are also very excited by a new smaller version of our store and the increased sales per square foot and the greater returns that it is generating. We know that our updated design center staffed with the right personnel provides a much better presentation of our custom furniture capabilities, thereby offering a shopping experience that is truly unique at our price point anywhere in our industry."
The company's statement went on to say that the past few years at Bassett have been characterized by the recession-related stress that severely compromised many of its licensees' ability to pay Bassett for the furniture shipped to them. As a result, many stores have been closed or moved into Bassett's corporate network. This has been an expensive but necessary process that is ongoing today. An analysis of remaining locations will identify performance potential and the capital upgrades necessary to reach that potential will be undertaken over the next few months. To date these retro-fits have consumed about $300,000 to $600,000 per updated location.
Once again, as a result of the IHFC transaction, Bassett's board has discussed the merits of various mechanisms of returning capital to shareholders. One such vehicle, a stock buy back program, has been considered as part of these discussions. Although no short term targeted amounts of stock repurchase have been established to date, the company's total share repurchase authorization currently stands at $23.3 million. Bassett plans to purchase shares on the open market in the coming months when the price of the stock provides economic justification in relation to the intrinsic value of the enterprise.
Finally, Bassett's Board of Directors today declared a quarterly dividend of $0.03 per share for the second quarter of 2011. The dividend will be paid on June 1, 2011 to shareholders of record at May 16, 2011. After paying an uninterrupted dividend for over seven decades, the company's dividend was suspended in January 2009 at the height of the recession.
"It is gratifying to be able to reinstate a quarterly dividend, even at a more modest rate, after the suspension of our long standing dividend over two years ago," Spilman said.
May 2,
2011 by in UnCategorized
By Home Furnishings Business in Bankruptcy on May 3, 2011
High-end upholstered furniture maker
Cisco Bros. has filed for Chapter 11 in Los Angeles as part of a restructuring plan.
In a prepared statement, the company said it was able to maintain its position in the marketplace during the recession and increased sales for the previous year but is now unable to meet certain real estate loan obligations.
"We've been through riots, survived fires and we will overcome this," said Cisco Pinedo, the company's founder and president. "There have been signs of recovery through increase of sales, and we're very thankful to our loyal customer base.
"However, prior to the economic turndown, the company guaranteed certain real estate loans," he added. "These real estate loans have been unable to meet their obligations, which have increased the company's cash demands. After reviewing the situation, it has become clear that a formal restructure is necessary."
"Many banks are using cross-collateral guarantees to call in outstanding commercial real estate loans and eliminate lines of credit in an effort to buoy their own balance sheets just at a time when many business need these funds to complete their restructuring," said Thomas Safian, a Cisco consultant. As a result, these companies suddenly find themselves without the resource reserve to meet ongoing costs and debt maintenance."
In statements to the court, officials said the company's revenues declined during the recession from $18 million in 2006 to $7.5 million in 2009, but rebounded to $9.7 million last year.
Cisco Bros. was one of the first upholstery companies to recognize the "green" movement and began using eco-friendly components in its line of fashion-forward upholstery. The company continued this movement by acquiring an old textile mill in High Point and turning it into a showroom using as many reclaimed materials as possible.
May 2,
2011 by in UnCategorized
By Home Furnishings Business in Acquisition on May 3, 2011
Real estate from the two largest home furnishings markets have come together to create one network of showroom space under the moniker International Market Centers and with a $1 billion investment.
That investment unites showroom assets in High Point, N.C., and Las Vegas.
IMCs portfolio, initially comprised of 13 buildings and encompassing more than 10.6 million gross square feet, includes the International Home Furnishings Center and the Market Square Complex (consisting of eight properties) in High Point as well as all of the World Market Center Las Vegas buildings. Financial details of the transactions were not disclosed.
IMC has also reached agreement to acquire five additional buildings encompassing nearly one million gross square feet including, Showplace, Showplace West and three North Hamilton Street showroom venues in High Point. Upon the closing of this transaction, IMC will own and operate a total of 18 showroom buildings spanning 11.5 million square feet. Closing is expected within 60 days.
IMC is majority owned by funds managed by Bain Capital Partners and a subsidiary of certain investment funds managed by Oaktree Capital Management, L.P. Related Companies, Bassett Furniture Industries (NASDAQ: BSET) and affiliates of Network World Market Center are also investors in the company.
We'll have more once the press conference in High Point wraps up.
May 2,
2011 by in UnCategorized
By Home Furnishings Business in Acquisition on May 3, 2011
Following months of speculation surrounding the sale of three of the largest multi-tenant properties at the
High Point Market, officials announced the launch of the worlds largest network of premium home furnishings, gift and home décor showroom and exhibition space today.
According to Robert Maricich, who will serve as CEO of the the newly formed International Market Centers, L.P. (IMC), the company has invested about $1 billion in an incredibly complex transaction to unite iconic showroom assets in High Point, N.C., and Las Vegas, with the goal to create an effective, efficient and compelling world-class business-to-business platform for both buyers and sellers.
Maricich characterized the deal as the dawn of a new age in collaboration and cooperation that will make the whole industry stronger, as well as the Market itself. He described the High Point Market as the soul of the community, a treasure, and an asset for the entire State of North Carolina, and added that IMC will seek to be great corporate citizens in building a great High Point Market.
IMCs portfolio, initially comprised of 13 buildings and encompassing more than 10.6 million gross square feet, includes the International Home Furnishings Center and the Market Square Complex (consisting of eight properties) in High Point, as well as all of the World Market Center buildings in Las Vegas. Through a series of transactions, all assets in the portfolio have been recapitalized with significant equity investments, providing for long-term stability and creating a growth platform for the industry. Financial details of the transactions were not disclosed.
IMC has also reached agreement to acquire five additional buildings encompassing nearly one million gross square feet including, Showplace, Showplace West and three North Hamilton Street showroom venues in High Point. Upon the closing of this transaction, IMC will own and operate a total of 18 showroom buildings spanning 11.5 million square feet. Closing is expected within 60 days.
IMC is majority owned by funds managed by Bain Capital Partners and a subsidiary of certain investment funds managed by Oaktree Capital Management, L.P. Related Companies, Bassett Furniture Inds. (NASDAQ: BSET) and affiliates of Network World Market Center are also investors in the company.
The company will operate from joint headquarters in High Point and Las Vegas. Rounding out the senior management team is Tom Mitchell, who will serve as president of home furnishings.
I believe with all my heart that the resources we bring to High Point and Las Vegas will invigorate the respective Markets and our industry by attracting new buyers and laying the foundation for our future, Mitchell stated. By bringing business partners together four times a year with new product, we will spur order writing on a scale that will deliver bottom line results for our tenants and fill retailers showrooms with the latest products.
Georgia Davis will lead the strategically critical gift industry initiative on an interim basis while a president of gift & home décor is identified. (Before joining World Market Center in 2007 as a consultant for its gift initiative, Davis was executive vice president of the Dallas Market Center for 20 years.)
Katherine Venezia will serve as chief financial officer. Venezia has been at World Market Center since 2004 and oversees day-to-day financial matters. Previously, Venezia was manager in corporate accounting and controller of the New York Development division of Related Companies.
Randy Eller will serve as IMCs chief integration officer and will be responsible for the transition and integration of the acquired companies into one effective, integrated operation.
The firm has engaged Price Waterhouse Coopers to assist the executive team in the strategic planning process over the next four to six months.
We have created a company that will deliver the most successful market experience for buyers and exhibitors from anywhere in the world, said Maricich. We are confident in the future of this industry and the unprecedented platform that the combination of High Point and Las Vegas Markets presents. We are bringing together the best minds in the business, the most coveted properties and the deep financial and operating resources of leading firms who share our optimism about our industrys growth prospects.
This significant and strategic investment creates the worlds greatest marketing stage for the home furnishings industry, said Phil Loughlin, managing director at Bain Capital. We are excited to support the industrys foremost leadership team as they enable ever more productive interactions between home furnishings suppliers and buyers.
International Market Centers will create a seamless market experience on both coasts and offer significant cross-category business opportunities, said Scott Graves, managing director at Oaktree. The companys plans include attracting additional traffic from international buyers, enhancing marketing efforts and creating new distribution and sales channels for exhibitors.
International Market Centers strong capital position enables it to invest in and vastly expand the strategically significant gift and home décor category, said Eller. We are uniquely positioned to tailor offerings to the thousands of buyers and sellers who are anxious to access world-class trade facilities and the most highly sought-after new products from domestic and international sources.
Davis added, This clearly positions Las Vegas as the pre-eminent gift and home décor market west of the Mississippi.
Upon closing all of the transactions, International Market Centers will own and operate the following facilities:
- Building A, World Market Center Las Vegas
- Building B, World Market Center Las Vegas
- Building C, World Market Center Las Vegas
- World Pavilions, World Market Center Las Vegas
- International Home Furnishings Center (IHFC), High Point (comprised of the Hamilton, Green, Commerce, Wrenn, Design Center and Main Wings)
- Historic Market Square, High Point
- Market Square Tower, High Point
- Suites at Market Square, High Point
- Plaza Suites, High Point
- Furniture Plaza, High Point
- National Furniture Mart, High Point
- Hamilton Market, High Point
- 300 South Main, High Point
- Showplace, High Point
- Showplace West, High Point
- 200 N. Hamilton, High Point
- 320 N. Hamilton, High Point
- 330 N. Hamilton, High Point