Levitz lands credit line
Plans to open 6 stores in coming months
By Clint Engel -- Furniture Today, April 9, 2006
Woodbury, N.Y. — Levitz Furniture has secured a three-year, $89 million credit line and will begin opening stores as part of its post-bankruptcy revitalization effort.
The revolving credit facility through Banc of America Securities and Back Bay Capital Funding replaces a $55 million facility dating from December, when Levitz — formerly Levitz Home Furnishings Inc. — was purchased by Prentice Capital with Great American Group for about $92 million.
Prentice subsequently closed some 34 stores and dismissed Levitz top management. Tom Baumlin, who previously had worked with Prentice, was named interim CEO and is now CEO of the retailer, which has about 78 stores, primarily in the Northeast and on the West Coast.
"This is an important milestone as we begin to aggressively implement our revitalization plans for this respected brand," Baumlin said in a press release. "We have further expanded our liquidity position, roughly doubling the company's potential borrowing ability to ensure we have ample funds to continue to execute our vision to make Levitz Furniture the premier specialty furniture retailer in the markets in which it competes."
Baumlin, who most recently operated his own consulting firm, Achilles Research, could not be reached for additional comment.
Before Achilles, Baumlin was CEO of Norstan Apparel Shops, which operates the Fashion Cents retail chain. He also spent five years with retailer Footstar, where he was senior vice president of finance, and several years with Deloitte & Touche Consulting Group.
Levitz said it is opening stores in Paramus, N.J., and in New York City's Staten Island and the Bronx this spring; in Summerlin, Nev., in early summer; and in Murrieta, Calif., in the early fall. A permanent Valley Stream, N.Y., store will replace a temporary location in late fall.
In addition, Levitz is renovating stores in Elmhurst, N.Y., Paramus, N.J., and Anaheim and Victorville, Calif.
"This is the most recent of many important markers we have hit since we bought the assets of Levitz from bankruptcy," said Prentice Managing Director Jonathan Duskin. "We have surpassed every major objective we have set since we've owned the company."
LHFI filed for Chapter11 bankruptcy protection Oct. 11, owing furniture industry creditors more than $61 million.
Duskin said Levitz's new management "has made tre-mendous strides in only a few months, restoring trade confidence and rebuilding the Levitz consumer franchise.... We are confident all our partners will prosper as we deliver on our promise to reinvigorate this great retailer."
In a letter sent in March to suppliers, Levitz highlighted initiatives it has implemented since the acquisition, including aggressive advertising and customer research.
The retailer said it expects to have advertising, mostly television, almost every week this year, and said sales have exceeded expectations in five of six recent weeks. Levitz also said it has made headway in merchandising and said costs are "being aggressively attacked."
The company also pointed to a better financial structure with the just-announced credit facility and Prentice's commitment to invest more than $75 million to rebuild and reposition the company.
For the most part, suppliers said their first impressions of the new Levitz have been favorable.
J.B. Davis, president and CEO of Kluassner, said his company has been impressed with Levitz management, both the new people and those who remained.
"We're doing a nice job with them, and we look forward to growing our business with them," he said.
Kevin O'Connor, president and CEO of key supplier Legacy Classic, said he is also impressed with the early steps. He had just been through the soft-opened, 53,000-square-foot Staten Island store, and said it was bright and colorful, with furniture displayed in appealing lifestyle environments that addressed a variety or consumer tastes.
"Prentice appears to be willing to put money where its mouth is," O'Connor said. "There's more money being spent on accessories, store décor and layout, and making it easier for a consumer to shop."
He added that Levitz's "principles have come in as people who understand retailing — not necessarily furniture retailing — and are applying some good business principles, but also not being so smug that they're saying they know how to run a furniture business. For that, they're turning to the talent they have both kept on and acquired."
Jeff Cook, president and CEO Magnussen Home, said Levitz appears to be making a "conscientious effort to get a handle on operating costs" through moves such as closing poor-performing stores.
-
Levitz secures credit line, plans to open stores
Apr 7, 2006
Specialty retailer LoveSac introduces new store design
Belfort Furniture, Lawrance Furniture are NHFA Retailers of Year
Kincaid Furniture honors Jimmy and Rosalynn Carter for Habitat work
Singapore furniture show expecting increased turnout
Furniture, mattress sales boost Conn's sales 37.6% in recent quarter
Featured Company
-
Brandwise Inc.
Brandwise serves a model - not just an industry - by integrating, automating, and optimizing the entire sales channel, from wholesale Suppliers to their Reps and the Retailers they service. In short, our software helps Reps and Suppliers sell more and create... more
VIEW ALL GALLERIES
