Sure Fit's new era: Shlensky out, Grosfeld in
Michael J. Knell -- Furniture Today, August 23, 2004
New York — Former Sure Fit President and CEO Bert Shlensky has officially left the company now headed by JR United President Salo Grosfeld, effective Aug. 19.
At the 11th hour, Grosfeld and DE Shaw purchased the slipcover manufacturer for $16.5 million in cash plus $4 million in operating liabilities in an auction that was approved by the U.S. Bankruptcy Court of the Southern District of New York on Aug. 5.
"We mutually decided it was better for me to pursue my future and them to pursue their own directions," explained Shlensky, adding that he hopes to stay in the textiles industry. The new investors had originally hoped he would stay on in an advisory capacity through the transition.
"With DE Shaw's financing, I think the company is poised for a turnaround," he added. "The company has shifted enough to imports and cut expenses to be able to return to profitability."
Shlensky confirmed that his stepping down as CEO and the appointment of Grosfeld as the new Sure Fit head was part of the deal with investors from the onset. "I am very confident in Salo's abilities and think Sure Fit will be in good hands under his leadership," he continued.
"I am very proud of all the people at Sure Fit and hope they stay in it. I think this industry definitely lacks creativity and innovation, and I worry that what happened to Sure Fit will serve as yet another example of our industry being forced to chase price," he described.
One of DE Shaw Group's affiliates completed the acquisition of substantially all of Sure Fit's assets on Aug. 11 after submitting the winning bid at a court-approved auction on Aug. 3.
The acquired assets include Sure Fit's inventory, receivables, equipment, intellectual property and certain leases.
In addition, a wholly owned subsidiary of DE Shaw — Laminar Portfolios — agreed to provide a $10 million line of credit to the new Sure Fit Inc.
"This is a wonderful niche business. We're excited at the prospect of returning the Sure Fit business to profitability by expanding relationships with customers and suppliers," said Max Holmes, a managing director of DE Shaw & Co., LP and head of the firm's distressed securities group. "Leveraging Salo Grosfeld's expertise, we also plan to explore opportunities for product-line extensions."
Sure Fit will continue operating out of New York and the Allentown, Pa., area. The company will continue to operate call and distribution centers in the Allentown area, and will maintain marketing, sales, sourcing, product development, administrative, and financial staff in New York and Pennsylvania.
The new Sure Fit Inc. will operate as a subsidiary of DE Shaw Laminar Portfolios, LLC.
Furniture Today's Ray Allegrezza Speaks with Stephen Bogart about Fine Furniture's New Bogart Line