Nationwide sale closes
Investors expect chain to grow, prosper
By Clint Engel -- Furniture Today, May 27, 2002
NORCROSS, Ga. — NORCROSS, Ga. — The majority owner of Nationwide Warehouse & Storage has teamed with Sun Capital Partners to buy the remaining 63 stores and other assets of the bankrupt retailer for $10.7 million.
The move will breathe new cash and perhaps new life into the highly promotional Top 100 company, which filed for Chapter 11 bankruptcy protection in October.
U.S. Bankruptcy Court approved the sale to Nationwide Furniture, an affiliate of Boca Raton, Fla.-based private investment firm Sun Capital Partners. FF Funding, Nationwide's post-petition lender and an affiliate of its controlling owner, Quad-C of Charlottesville, Va., "has committed to be a nonvoting, equity participant with Sun Capital in connection with its bid," according to court documents.
Nationwide Furniture was to pay $900,000 in cash at closing plus assume certain liabilities valued at about $9.8 million, the documents said. The deal closed last week.
Nationwide, which had more than 160 stores in the United States and Canada at the end of 2000, collapsed the following year, shedding scores of stores and bringing in new management including Rick Meiser as chief executive officer.
But business worsened after the Chapter 11 filing. The company closed more stores, defaulted on a loan and asked the court to allow it to auction off its remaining 63 stores in 20 states, its Norcross, Ga., headquarters and other remaining assets as a going concern.
The move originally was opposed by a group of prepetition lenders led by BNP Paribas. Under the order granting last week's sale, BNP was to receive $200,000 for unpaid fees and expenses and "has agreed not to assert its liens or claims against the sale."
Steven Liff, Sun Capital vice president, said his company is "very enthusiastic" about Nationwide, "a retailer with a valuable niche."
He said the management is expected to remain on board.
He would not disclose Quad-C's investment, but said it is a minority position. Some proceeds from the sale will be used to pay Nationwide creditors, Liff said, but he wouldn't elaborate on the terms.
"Our ability to purchase the best stores of what used to be a much larger franchise will allow us to capitalize on the selected markets that make the most sense for the business," he said. He wouldn't say how much money Sun Capital is putting in, but said it will "provide the needed capital to both increase the inventory per store and grow the chain."
"We like the idea of clustering stores," he said. "We're in very good markets now and by expanding in these existing markets, we'll be able to take advantage of economies of scale through freight, advertising, etc."
Key suppliers to Nationwide include Pilliod, Lifestyle, Elite, Standard Furniture, Dynamic, Mantua, Tailor Made, Spring Air, Belco and Palm Bedding. All have been supportive, Meiser said.
He called Sun Capital a "perfect fit."
"The whole model has tremendous potential, and it's a proven winner," Meiser said. "We now have an opportunity to re-prove that, and we're excited about it."
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