Danker, Sheffield owners buy Gallahan's store in Va.
By Clint Engel -- Furniture Today, February 11, 2007
Fredericksburg, Va. — The owners of high-end Danker Furniture in Gaithersburg, Md., and Sheffield Furniture in greater Philadelphia have acquired the name and lease of retailer Gallahan's here.
Severegn Furniture Management bought the name and other Gallahan's assets from Stone-Lee for an undisclosed sum.
Stone-Lee was led by Phil Kennett, whose other furniture retailing business, High Point-based Wood Armfield, filed for Chapter 11 bankruptcy protection last summer and subsequently closed.
Severegn is led by CEO and majority stakeholder Jim Shrawder. The other owners are Gerard Kvasnovsky, former owner of Danker, and Schrawder's other business partners, Mike Holmes and Dave Zartman. This fall, Shrawder acquired a stake in Danker, which was later transferred to Severegn, now the owner of Danker, Sheffield and Gallahan's
"It's a beautiful store," Shrawder said of the 82,000-square-foot Gallahan's, twice the size of the Sheffield showroom in Malvern, Pa., and the largest of the four Danker stores in Maryland and Virginia.
It will be run separately as Gallahan's, but, "It's going to take several months to get it fully back up to speed," he said.
Gallahan's faltered last year as a result of the Wood Armfield bankruptcy, as common suppliers to both stores "cut back hard," Shrawder said.
Severegn didn't buy Gallahan's inventory. Instead, that is being sold on consignment, with proceeds held in escrow for distribution to the former Gallahan's creditors in order of priority, much as they would in a bankruptcy proceeding, he said.
The new Gallahan's of Fredericksburg company expects to eventually bring back all the retailer's key suppliers, including Henredon, Drexel Heritage, Hickory Chair, Maitland-Smith and Stanley (all Danker suppliers) as well as add Stickley, just as Shrawder did at the Danker stores late last year.
He projected Gallahan's sales could reach $20 million this year, and said Severegn, through the three chains, should top $60 million.
Kennett declined to discuss the reasons for the sale other than to say, "For our customers and our people and the future of Gallahan's, this just seemed to be an excellent fit."
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