Healthy Back acquires JoAnne's Bed & Back
By Clint Engel -- Furniture Today, May 25, 2008
Lorton, Va. — Retailer Healthy Back has acquired the assets of JoAnne's Bed & Back out of bankruptcy and plans to keep half of the 16 stores operating.
According to bankruptcy court papers, the purchase price was $600,000 cash and other considerations, including fulfilling orders on which JoAnne's customers had placed deposits.
Plans for the deal were announced in April. Beltsville, Md.-based JoAnne's said it had filed for Chapter 11 protection to effect the transaction.
At the time, JoAnne's expected 13 of its stores in Maryland, Virginia and Washington, D.C., would remain open.
But Healthy Back spokeswoman Barbara Martin said some stores were too close to existing Healthy Back units, and that only eight will stay open.
The JoAnne's stores remaining open will assume the Healthy Back name around July 1, after a liquidation period. They will then feature the Healthy Back lineup of bedding, chairs and other back-related goods.
Key suppliers to Healthy Back include Tempur-Pedic, Herman Miller, Human Touch and Steelcase. The stores also stock a private-label line of back pillows, accessories, bedding, furniture and other goods.
In addition to Tempur-Pedic, JoAnne's key suppliers include Sealy and Leggett & Platt.
JoAnne's, a longtime rival of Lorton, Va.-based Healthy Back, had annual revenues of about $10 million, according to a press release on the acquisition. Healthy Back said it has annual revenues of more than $40 million through its e-commerce division and 18 stores in Maryland, Virginia, New Jersey, North Carolina, Kentucky, Colorado and California.
The acquisition fits with Healthy Back's strategy of expanding its footprint in existing markets, the company said.
"By growing the number of stores in our key strategic markets, we increase our overall efficiency, which leads to smart growth and better service for our customer," said Tony Mazlish, Healthy Back CEO.
"This is a tough time to be a retailer, particularly in and around the furniture industry," he added.
"We feel very fortunate to be in a position to acquire these very valuable assets and to continue to pursue growth in the niche back- store industry and help find product solutions for people with back pain."
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