Krause's names Ploy president
By Clint Engel -- Furniture Today, November 11, 2001
| Ploy |
Brea, Calif. — Krause's Furniture has named industry veteran Martin Ploy president as the new owners work to revive the Top 100 company after its bankruptcy filing and store liquidations.
Ploy, most recently senior vice president of sales at upholstery producer BenchCraft, will take over day-to-day operations at Krause's, a maker and retailer of custom upholstery. Former President Herb Friedman has left the company after working temporarily as a consultant with the Hakakian Group, Krause's new owner, said Alex Hakakian, Krause's chief executive officer.
Hakakian called Ploy's 35 years of industry experience in manufacturing and retailing "essential" for a new leader at Krause's.
"That's the kind of experience you need to run a factory and then sell the merchandise yourself," he said.
Ploy got his start in 1966 in the warehouse of former retailer RB Furniture in California. He left RB as executive vice president in 1983, then became vice president of national sales for Kanowsky Furniture, a former northern California upholstery manufacturer. In 1990, he was named key accounts manager for BenchCraft and eventually was promoted to senior vice president of sales in April 2000.
Ploy was the City of Hope's "Spirit of Life" honoree from the industry in 1989.
After years of losses, Krause's filed for Chapter 11 bankruptcy protection this summer. It had shut down some of its 89 stores and was liquidating the remainder when the Hakakian group announced it would acquire the company's assets and reopen the Brea, Calif., factory and about 40 stores.
The new owners, who received court approval for the deal in October, expect to reopen most of the stores, including some Castro Convertibles units on the East Coast, by January. They plan to form alliances with certain industry suppliers, supplementing Krause's mix with additional goods.
Under the court-approved plan, the Hakakian Group has invested about $9 million, with $1.6 million going to Krause's former debtor-in-possession lender to acquire the assets. The rest will be used as working capital to restart the business, Alex Hakakian said.
Buxbaum Group is handling the final going-out-of-business sales at Krause's and expects to wrap up on Nov. 11. The new owners plan to clear out old merchandise from the factory beginning Nov. 15 and gradually open stores with new samples.
Under the court agreement, Hakakian also has agreed to fill up to $25 million in backlog orders from previous customers.
Hakakian said that all but the finance department will report to Ploy. Hakakian will handle real estate issues and will play an ancillary role in merchandising and marketing plans.
Ploy said that in the past, Krause's had tried to force stores into areas where they couldn't be supported with adequate advertising, and struggled with logistics issues as it served its widespread markets from one West Coast factory.
"Many times a retailer feels it needs to grow to satisfy stockholders rather than establish an intelligent rate of growth," he said.
Nevertheless, Ploy said he sees great potential for Krause's, particularly on the West Coast, which has been without a dominant player since the days of RB and Barker Bros.
"I'm very excited about having the opportunity to take a company and a name the consumer recognizes — with great locations — and trying to reposition it with a refined, or tweaked, business model," he said.
BenchCraft has not yet named Ploy's replacement, said Greg Henderson, BenchCraft president and CEO.
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