Bermex beefs up line
Hopes to reopen 13 Shermag factories
By Michael J. Knell -- Furniture Today, November 16, 2009
MASKINONGÉ, Quebec — With the acquisition of Shermag and its Jaymar upholstery division, Groupe Bermex is positioning itself as one of the largest furniture resources in North America, with estimated annual revenues of C$100 million.
Bermex President Richard Darveau has said his goal is to eventually reopen all of Shermag's 13 factories across Quebec and northern New Brunswick. Until the deal closed in late October, Shermag had been operating under the Company's Creditors Arrangement Act — bankruptcy protection it sought in May 2008 — and the plants were idled.
“We have sufficient funds to keep these plants intact for at least two years,” Darveau told the Canadian Press wire service. “I hope one day to have 3,000 employees, because that's what they used to have.”
While those ambitions will be not achieved immediately, the company is making organizational changes to take advantage of its new heft in the marketplace.
Daniel Walker, president of the group's BDM+ Furniture division, will add president and chief of commercial operations of Shermag Inc. — which includes Jaymar — to his responsibilities. BDM+ is the corporate parent to Bermex, Dinec and Mi-Di, all of which produce customizable bedroom, dining room, entertainment and occasional case goods in a variety of price points.
Under the group's new structure, Walker will be responsible for sales, marketing, product development, distribution and related issues while Darveau will be in charge of finance, production and administration.
“Shermag is going to stay the way it is,” Walker said.
Reporting to Walker will be Alex Adimari, who had been CEO of Shermag and now will be its vice president of sales and marketing. Taking on the same role for Jaymar will be Louis Bégin, who has served in a number of sales and marketing roles for the contemporary upholstery producer since before its acquisition by Shermag in early 2003.
Claude O'Reilly will return to Shermag as a senior factory manager.
“Our plan is to clean up the plants in Lennoxville and Granby and restart production in those factories with a new Canadian-made product line — the sooner, the better,” Walker said. The company expects the facilities to be operational in early 2010.
In the early part of this decade, Shermag's annual sales were more than C$220 million. But with more than 70% of its shipments destined for U.S. retailers, the Canadian dollar's rise in value from 63 U.S. cents to parity had a devastating effect on sales. However, Walker notes that Shermag's current business remains at a reasonably robust C$55 million annually, with a solid order book, healthy accounts receivable and inventory ready-to-ship valued at about C$18 million.
When coupled with Bermex's estimated annual sales of C$48 million, the new company has approximate revenues of C$103 million, making it one of Canada's largest furniture resources and one of a select group of 10 or so Canadian resources with revenues in excess of C$100 million.
Walker says that while Bermex's primarily business will always be manufacturing in Canada, imports will continue to drive Shermag's sales, particularly in bedroom and glider rockers.
The current priority is product development. “We have to start with a new product platform,” Walker said. “We're going to take a fresh look at all the products we make.”
Adimari is enthusiastic about the merger and believes it what Shermag needs to get back on track.
“We can now work on selling and development new product,” he said. “We are going back to the Shermag look and we're going to bring out a lot of wonderful new collections. We are going to open up domestic manufacturing once again while continuing to bring in the best imported goods.”
He said Shermag will return to its roots as a full-line case goods house, with full collections of bedroom, dining room, entertainment and occasional pieces.
Bégin, who joined Jaymar when it was still owned by its founder, George Reinitz, also said he is pleased with the new ownership.
“I'm very comfortable with the way they think,” he said, adding that Jaymar also wants to return to its roots as a “fashion forward” upholstery house. “We want to concentrate on special order and we're going to be a little more fashion forward than we have been in recent years. Our emphasis will be on what we do best — offer fabric and leather and a lot of styles.”
Quebec court approves Bermex buy of Shermag
08/13/2009Court approves sale of Shermag to Bermex
08/16/2009Court approves Shermag's reorganization plan
09/15/2009Court OKs Shermag deal
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