Rowe shuffles execs, adds division
By Gary Evans -- Furniture Today, January 15, 2006
McLean, Va. — Upholstery maker and retailer Rowe Cos. has created a third division and restructured upper management team as it prepares to undertake a refinancing plan.
In addition to Rowe Furniture and the Atlanta-based Storehouse retail chain, the Rowe Cos. will now include a division called Rowe Sourcing, focusing on the acquisition of raw materials and imported products.
Bruce Birnbach will step down as president and chief operating officer of Rowe Furniture to head the new division.
Gerald Birnbach, Rowe Cos. chairman and president, will also be president of the furniture division, although operational duties will be spread among key executives.
As part of the plan, the company filed notice with the Securities and Exchange Commission that it was terminating its chief financial officer, Gene Morphis, and had named Garry Angle, vice president and treasurer, as its principal financing and accounting officer.
Timothy Fortune, who had been vice president of human resources and strategy, has been named senior vice president of operations for the furniture division and will oversee human resources, information and technology, finance, process improvement and manufacturing.
Stefanie Lucas will continue as senior vice president of Rowe Furniture, overseeing marketing, sales and merchandising. Barry Birnbach will continue as vice president of corporate development and will oversee customer service and sales support.
Lucas said the international division was created because of the increasing importance of imports.
"To say the least, it has impacted us in a lot of different ways, in dealing with fabrics, which are now outsourced more often than not, and in dealing with cut-and-sew upholstery," Lucas said.
"We have two U.S. facilities, and we will continue to run those facilities and run them profitably. But we don't want to be blind to the fact that we have to determine the right mix of imported products and/or components for our business model," she said. "And we want to do it in a strategic and sensible way for us. It's a small percentage of what we do but we have to be properly positioned for the future."
The new division will concentrate on Rowe Furniture, but will on will be evaluated to see "how that integrates into the two divisions, being Rowe Furniture and Storehouse," Lucas said.
The changes follow an organizational review of the company by the Carl Marks Advisory Group, which said three of its consultants will assume full-time interim responsibilities with Rowe Furniture. Rowe Cos. announced in November that it hired the Marks group to perform financial and management consulting services.
Edward Spinelli will be interim vice president of manufacturing, Melvin Henson will be interim vice president of finance and Tyler Montague will be interim process improvement manager. All will report to Fortune.
Rowe also announced a new credit agreement with GE Commercial Finance for a secured credit line of up to $50 million and a secured loan of $7 million, to replace an existing credit line with Bank of America and capital lease with SunTrust Bank.
Under terms of the agreement, the company must raise equity capital of $9.5 million and secure a commitment for at least another $2 million in equity capital.
The company announced earlier that it had investment banker Morgan Joseph and Co. as an advisor and to assist in the possible issuance of additional debt or equity securities.
"We're well along with this process and we don't foresee it being a problem," Lucas said.
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