Nexia's plan a no-go for now
By Clint Engel -- Furniture Today, February 16, 2003
Salt Lake City — Remember Nexia Holdings?
Last June, the investment company based here announced big plans to jump into furniture retailing, saying it would acquire about 50 retailers with combined revenues of $90 million, creating its own home furnishings retail network.
A few weeks later, thanks in part to what it said was a lot of interest from bigger-than-expected players, the plan grew to 50 companies with revenues of about $200 million, according to Wasatch Business Investors, an investment and consulting firm working with Nexia.
Wasatch set an aggressive goal of putting the network together within two years and anticipated having 10 deals done by the end of 2002.
It hasn't happened. Nexia hasn't closed its first furniture transaction.
"Everything is on hold at this point," said Nexia Chief Executive Officer Richard Surber.
He blamed market conditions and the fact that Nexia had difficulty raising sufficient capital. He said the company had identified three or four "viable target companies," but in some cases the revenues and profitability weren't attractive enough for Nexia.
That's a much different picture than Nexia and Wasatch executives were painting last year.
In June, Wasatch partner Shawn Hammond said Wasatch was evaluating stores in Utah, Oregon, California, Florida, Texas, New York and Pennsylvania, among other states, and was "concentrating on stores that have displayed consistent growth and profits, with owners and managers that have a track record for success."
"They see an opportunity to do more than what they're currently doing," Hammond said then. "They have expansion plans but don't have the capital to do it on their own."
Apparently, neither does Nexia, and Wasatch hasn't been able to capitalize on what it said were close investor relationships.
Nexia, a public shell company, was spun off from another penny stock company, Axia Group. Nexia reported a net loss in its third quarter ended Sept. 30 of $305,651 and a $744,943 loss in the first nine months.
The third quarter net loss, which compared with a loss of $39,441 in the comparable quarter a year earlier, was the result of acquisitions and associated costs, as well as "difficulty obtaining new consulting engagements due to the current economic climate," Nexia said in a report to the Securities and Exchange Commission.
Nexia's two primary businesses involve real estate and financial consulting, the report said. Last week its stock was trading for less than a penny per share.
Wasatch's Hammond said last year that Wasatch was responsible for financing the furniture store acquisitions and that the company "has the resources and commitment from investors to facilitate the entire project."
Late last year, when Furniture/Today sought an update on Nexia's progress, he said the company was working on finalizing its first deal with a retailer with revenues of about $40 million.
Hammond did not return telephone calls and e-mails for this story.
-
Nexia now looks to forge $200M retail venture
Jun 23, 2002
Featured Company
-
Wright Labels
Bill and Tom Wright founded Wright of Thomasville in 1961 on the idea that printing was a creative medium and the belief that "a promise made is a promise kept." The Wright brothers focused their attention on providing exceptional printing for the... more
VIEW ALL GALLERIES
