La-Z-Boy to sell 3 units
Hooker to acquire chair maker Sam Moore
By Larry Thomas -- Furniture Today, February 18, 2007
Monroe, Mich. — La-Z-Boy said last week it has signed a letter of intent to sell occasional chair producer Sam Moore to Hooker Furniture, and said it is talking to potential buyers for its Pennsylvania House and Clayton Marcus units.
La-Z-Boy said the three companies don't mesh with its longterm strategic direction.
"We will strive diligently towards a smooth transition for both our customers and employees," La-Z-Boy President Kurt Darrow said in a statement accompanying the company's latest quarterly operating results.
The company has owned Bedford, Va.-based Sam Moore since 1998. It would become part of Martinsville, Va.-based Hooker during the second calendar quarter.
"This acquisition would help us attain one of our strategic goals to further diversify into fabric upholstery," said Paul Toms Jr., chairman, president and CEO of Hooker. He said Sam Moore has a niche- and item-oriented line like Hooker, and has a similar dealer base.
Hooker acquired upscale leather seating producer Bradington-Young in 2003. Toms said the two upholstery companies will have combined revenues of nearly $100 million annually.
Hooker said Bradington-Young had sales of about $62.9 million for the fiscal year ended Nov. 30, but La-Z-Boy declined to disclose a sales figure for Sam Moore.
Hooker is closing the last of its U.S. wood furniture factories, but Toms said he doesn't see domestic upholstery production meeting the same fate.
"We believe there is a good future for domestically produced upholstery, especially for a company that offers customization," Toms said, noting that 60% of Sam Moore's business is special order.
Under terms of the agreement, Sam Moore President Mike Moldenhauer would remain in that post.
The proposed acquisition price was not disclosed.
During a conference call with securities analysts, Darrow said the product lines of Sam Moore, Pennsylvania House and Clayton Marcus generally are not found in La-Z-Boy's dedicated stores. Pennsylvania House, in particular, has not been profitable, he said.
"Each company has a number of positive attributes ... and we expect they will be very appealing to a prospective buyer," Darrow said of Pennsylvania House and Clayton Marcus.
In recent years, La-Z-Boy has moved virtually all of Pennsylvania House's production offshore.
Last year, La-Z-Boy combined Pennsylvania House and Clayton Marcus under one umbrella and named industry veteran Mac McCall as president of both units.
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