From Home Furnishing Business
La-Z-Boy to Buy Arizona Stores
The stores compose the largest volume licensee operator within the 350-store network, from EBCO, Inc., owned by Edward O. Breunig, III, an independent dealer.
Included in the acquisition are six stores in the Phoenix metropolitan area, two stores in the Tucson market, and one store in Prescott. The stores had combined calendar 2017 revenue of $78 million.
The acquisition will provide continuity for the successful Arizona based business and its employees following the planned retirement of the independent dealer.
The nine stores will become part of the La-Z-Boy retail segment and will bring the total company owned store count to 155. The transaction is expected to close in August 2018, subject to customary closing conditions.
“We are excited to acquire this thriving business and see great prospects in the Arizona market for La-Z-Boy. We are grateful to the Breunig family for their unwavering dedication to our company and store network, and their 35-year commitment to building and developing the most successful independent La-Z-Boy licensee business in North America,” said Kurt L. Darrow, chairman, president and CEO of La-Z-Boy Incorporated. “As strong ambassadors of our brand, they have made meaningful contributions throughout the years to strengthen our store system while maintaining a focus on providing an excellent customer experience to thousands of clients. I would like to take the opportunity to thank Ed, who worked tirelessly to further build the Arizona La-Z-Boy organization and introduce new services within the market after taking over the business in 1999 from his father, who opened the first store in Arizona in 1983. Ed has been a tremendous leader and friend, and we wish him all the best in his well-deserved retirement.”
Breunig, CEO of EBCO, stated “I could not be more thankful to my parents, Ed and Claudia Breunig, for taking a big risk 35 years ago to start a retail furniture company. The business they started and the way they mentored so many people left an enduring mark. It has been my honor to continue their work by building and leading an incredible team of talented, passionate and hard-working individuals whose dedication to outstanding service to one another, to our clients and to the community is, in my opinion, unmatched in retail. I am proud of the business we have built together and I am confident that our long-time partner in progress, La-Z-Boy Incorporated, will continue our family tradition. La-Z-Boy will have an excellent team of leaders to continue the management of day-to-day operations, headed by Frank Neal, who has served as President for the last five years. Frank is a very accomplished retail leader who oversees all functions of the business and is largely responsible for our incredible sales growth.”
Darrow added, “Arizona is a vibrant market with one of the highest population growth rates in the nation, which bodes well for furniture sales. The top four highest sales volume stores in the 350 La-Z-Boy Furniture Galleries® store network are among those we are acquiring. Additionally, Arizona has great demographics with respect to the core La-Z-Boy consumer and, due to the market dynamics, we are excited about its potential and believe there could be room for additional La-Z-Boy Furniture Galleries stores in the future. The nine stores we are acquiring are profitable, will be quickly integrated into our retail segment and be accretive.”
As La-Z-Boy is already recording a portion of the Arizona store volume in its wholesale segments, the acquisition of the Arizona stores will contribute approximately $40 million annually of sales volume to the company on a consolidated basis.
Darrow concluded, “With a solid team in place, we expect a smooth and seamless transition for customers who will continue to enjoy the excellent shopping experience and service they have come to expect not only from the Arizona-based La-Z-Boy Furniture Galleries stores, but in all our stores. The future for La-Z-Boy Incorporated is bright and exciting and I am confident in our long-term prospects and uncompromising commitment to evolving and meeting challenges in the dynamic marketplace.”
Terms of the deal were not disclosed. La-Z-Boy will supply financial information relating to the transaction when it reports its fiscal 2019 first-quarter results in August.