Harlem set for growth
Buyout will allow chain to double in size
By Larry Thomas -- Furniture Today, February 13, 2005
Lombard, Ill. — Three private equity firms have teamed with Bruce Berman, CEO of Harlem Furniture, to acquire the assets of the 93-year-old Top 100 retailer.
Terms weren't disclosed, but Berman said the deal would give the 15-store chain the capital to at least double in size in the next three to four years.
"We are excited about the opportunities this funding offers," he said. "It will allow our company to grow geographically, as well as expand our product offerings."
Berman said he expects to open stores within a 250- to 350-mile radius of Chicago. Some of those will be in Harlem's traditional Chicago market, but others will be outside the immediate area in Illinois, Indiana and Wisconsin.
Currently, Harlem has only one store outside Illinois, a 40,000-square-foot unit in Merrillville, Ind., that opened last year.
Last year, the company also expanded its distribution center in Woodridge, Ill., to 300,000 square feet, and Berman said all new stores could be serviced from that facility.
The retailer had estimated sales of $150.7 million in 2003 and $167.1 million in 2004. The 2003 figure put Harlem at No. 44 on Furniture/Today's list of Top 100 furniture stores.
Berman said he may look outside the company to fill a few new management posts needed with the expansion, but most will be filled by promoting current employees.
Under Harlem's new structure, Berman said he is "a significant investor" and will remain CEO. The private equity firms are Pouschine Cook Capital Management, Bear Growth Capital Partners and Mercantile Capital Partners.
Berman's mother, Marilyn, and his brother, Ron, are no longer with the company. Bruce and Ron Berman's grandfather, Sam Berman, founded Harlem in 1912. The retailer takes its name from its flagship store location on North Harlem Avenue in Chicago.
All three equity firms specialize in middle-market companies. Principals of New York-based Pouschine Cook have made investments in the Planet Hollywood restaurant chain and piano maker Steinway.
Bear Growth Capital Partners, an arm of investment firm Bear Stearns, focuses on companies valued at $10 million to $100 million. Mercantile Capital Partners focuses on consumer segments such as retail, restaurants and apparel.
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