Gabberts may buy Arizona's Ladlow's
By Clint Engel -- Furniture Today, April 13, 2003
High Point — Gabberts is in discussions to buy one-store Ladlow's Fine Furniture in Scottsdale, Ariz., a move that would bring the Top 100 company to its first new market in 15 years.
Minneapolis-based Gabberts is in the midst of due diligence, investigating distribution and other issues and hoping to come to a final agreement in 90 to 120 days, Chief Executive Officer Jim Gabbert said during the furniture market here.
He would not say how much Gabberts is considering paying or what projected sales would be in Scottsdale, which is in the Phoenix metro area.
The high-end Ladlow's has been in the market for years and operates a store it opened in May 2002 on the hot North Scottsdale Road — near another upscale retailer, Robb & Stucky. The Ladlow's store has 75,000 square feet of showroom and a 60,000-square-foot attached warehouse. It replaced a 17,000-square-foot store in the heart of the Paradise Valley residential and resort area.
If the deal closes, it would represent the first new-market expansion for the four-store, high-end Gabberts since it entered Fort Worth, Texas, in 1987. The retailer currently operates its headquarters store in Minneapolis, the Fort Worth store and two Dallas-area stores, including a Gabberts Furniture Outlet.
The Arizona city also would be the second market in which Gabberts is competing head-on with Fort Myers, Fla.-based Robb & Stucky, which opened a 115,000-square-foot Dallas-area store in Plano in 2000.
Gabbert said many great retailers are in the Phoenix area, and "we're certainly not going into Phoenix to compete with Robb & Stucky. It's a great, vibrant market. The opportunity was there." Ladlow's has lines similar to Gabberts and a comparable customer base, which Gabbert said makes the acquisition appealing. Word of the pending deal got around the furniture market as Gabberts investigated distribution issues with key suppliers.
"We've had a very successful business for 27 years," said Dan Roark, Ladlow's president and owner. "And even though we just built a new facility, these discussions potentially provide an exit strategy that is appealing."
Roark said the culture, business model and vendor structures of Ladlow's and Gabberts "match about as well as any potential successor. I like the way all those things line up."
Key Ladlow's suppliers include Bernhardt, Henredon and Fine Furniture Design & Marketing as well as some West Coast upholstery sources, including RC Furniture.
Ladlow's was founded by the Ladlow family in 1954 and acquired by Roark in 1976. Roark also was a partner with Steve Mehagian in a successful Mehagian's Drexel Heritage store in Scottsdale, which closed in March.
Mehagian's had been a Drexel dealer since 1945, but Drexel changed its distribution policy with a plan for multiple stores under one owner in the market, and Mehagian decided to pursue other opportunities outside of the industry, Roark said. Mehagian is not a partner in Ladlow's.
If the Ladlow's-Gabberts deal closes, Roark said the plan is for him to remain in a high-level management position there.
The deal is being worked out during an extended period of tough business for furniture retailers, particularly at the high end. Gabbert said business has remained soft this year. Last year, the company had estimated furniture, bedding and accessory sales of $85.8 million, down from about $98.5 million the year before, according to Furniture/Today estimates.
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