Rowe sale completed
Upholstery maker looking to rebuild
By Gary Evans -- Furniture Today, January 28, 2007
McLean, Va. — With its sale complete, Rowe Furniture can begin rebuilding a company that tottered on the edge of extinction.
"I think that we appear to be aligned with people who are solid, and they want to see us succeed as much as we do," said Gerald Birnbach, president and CEO of the midpriced upholstery company headquartered here. "I think they will restructure us so there will be incentives for us to do that."
Birnbach referred to Sun Capital Partners, a Florida-based investment fund that officially bought Rowe last week in federal bankruptcy proceedings for $30 million.
Sun Capital also counts furniture suppliers Lexington Home Brands and L. Powell Co., and retailers Wickes Furniture, Mattress Firm and Nationwide Furniture as part of its investment portfolio. A Sun Capital affiliate was the sole bidder in a U.S. Bankruptcy Court auction for the company. Rowe has been operating under Chapter 11 bankruptcy protection since September.
Birnbach said he was relieved that the company's 850 or more employees will be protected by the sale.
"People have gone through the past year with us pretty good," he said. "It hasn't been easy for anyone."
Birnbach said that any restructuring of the company would take place in the next several weeks, and he is evaluating his options. "They've asked me what I want to do," he said. "I love the company and the people. It's very important to me that the people have jobs and it looks like they will. I think in a few weeks we'll have the answer."
He said that Rowe is expected to maintain its identity with no plans to consolidate with any of Sun's other companies.
In recent years, Rowe encountered problems with production and delivery when it switched to new manufacturing technology during a time of slowing business conditions. In addition, the company faced a large and unexpected rise in the cost of raw materials due to chemical shortages caused by Hurricane Katrina and other weather disasters.
The company filed for Chapter 11 on Sept. 11, listing assets of $130.8 million and liabilities of $93.3 million. Shortly after, the company closed and liquidated its Atlanta-based Storehouse retail chain.
Despite its problems, Birnbach said the company, which had 2005 sales of over $290 million and losses of $5.3 million, was not abandoned by its dealers.
"It's interesting. A lot of people don't understand it. It's not that we lost accounts as much as we lost floor space," he said. "In other words, if we had 14 groups on the floor, we went down to nine. People were nervous.
"They liked us, they respected us and we got a lot of calls," he said. "But you're in business to make money and if you can't deliver and service the way you're supposed to, it's a problem."
PEOPLE MATTER MOST
06/28/2009Sun invests in Berkline
08/30/2009Rowe creditors back sale process
12/21/2006Sun Capital sells some of its FBI stake
03/16/2009Sun Capital eyes Rowe
12/09/2006
