FBI's plans take shape
High hopes for high-end acquisitions
By Powell Slaughter -- Furniture Today, April 28, 2002
High Point — In their first market as Furniture Brands International companies, the long-term roles of Drexel Heritage, Henredon and Maitland-Smith came into sharper focus here.
Buyers sensed a rejuvenated atmosphere at the three high-end resources because of the financial stability Furniture Brands brings to the table.
Drexel Heritage and Henredon in case goods, and Maitland-Smith in statement pieces, occasional and accessories join Thomasville's top-range divisions for a powerful lineup at the high end. They complement the clout of sister companies Broyhill and Lane at medium prices.
FBI in turn offers its newest companies, acquired at the end of last year from LifeStyle Furnishings International, solid financial backing and what management at the corporate and operational levels describes as an open atmosphere conducive to the sharing of expertise.
"I don't think opportunities like the one we had to acquire these companies surface very often, particularly in an industry going through a massive period of consolidation," said Mickey Holliman, Furniture Brands chairman, president and chief executive officer.
"We're hanging our hat on our brands for the long haul, and we thought the brand was invaluable with the companies we already had," he said. "This (acquisition) sets the stage for our brand story to be even further enhanced."
Holliman said FBI got "two extremely well-run businesses and a third that needs some work."
The work is well under way at Drexel Heritage, where Jeff Young took over as president and CEO just before market. Young's aim is to mix in more imports with domestic product.
In addition to using FBI's sourcing partner, Outlook International, Drexel will build a tighter relationship with Maitland-Smith, which will develop a line of accessories for Drexel Heritage Home Inspirations stores.
Young said buyers at market could sense a changed atmosphere.
"I think it's part of what's re-energizing this whole company," he said. "Drexel Heritage's increased potential under FBI is something every dealer is very aware of. Everybody is very forward-looking right now."
Watch for the three new FBI divisions to swap ideas as well as product among themselves and other FBI companies, said Holliman, a firm believer in sharing best practices.
"Within three weeks after the acquisition took place, all three of these companies had in their possession raw materials costs for every company we have," he said. "(Best practices) is an open forum, and we encourage management to visit among all the showrooms. There are no off-limits here."
Henredon President Michael Dugan said best-practice exchanges already have been beneficial, and that FBI provides a supportive environment that will help the division reach its potential.
"I guess you could say we're still in the honeymoon period, but I think it's much more than that," Dugan said. "It's really the start of a great marriage."
He praised Furniture Brands' attitude, atmosphere and operating philosophies, and said the chemistry is good.
"Mickey Holliman's understanding of the furniture business and, most of all, his passion for the business is the difference," he said. "It permeates the organization and makes us all more effective."
Seamus Bateson, president of Maitland-Smith, also credited Holliman's leadership as a new plus for his company, which includes high-end occasional source La Barge. He called FBI's strong financial resources a "breath of fresh air" and a morale booster for employees who'd been worried about the security of their jobs.
"Also, our experience is that we have a very small overhead component," Bateson said. "That's the entrepreneurial philosophy we see at FBI."
That philosophy emphasizes operational independence and what Holliman calls ground-up generation of goals, ideas and business practices.
"We are accountable for goals … (and) we're very free to operate the way we think best," Bateson said. "The industry is very fragmented, and it's extremely difficult to run different businesses in the same, highly centralized way. Companies have to explore their own niche."
| Holliman |
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