HOM plans to buy Gabberts store in Minneapolis
Will expand the upscale brand across the upper Midwest
Clint Engel -- Furniture Today, August 28, 2008
MINNEAPOLIS - HOM Furniture plans to buy Gabberts Design Studio & Fine Furnishings here and expand the upscale brand across the upper Midwest.Both companies, based in the Twin Cities, are privately held. The purchase price was not disclosed. Gabberts Chairman Jim Gabbert will leave the company.
The deal is expected to close Friday. The combined businesses would have projected retail sales of more than $200 million in 2008 and more than 1,000 employees, HOM said in a release. HOM had estimated sales of $184.7 million at 11 stores in 2007, according to Furniture/Today's Top 100 ranking.
Duplicate positions in corporate operations will result in employee reductions, HOM added.
"It's our intention to retain as many current Gabberts employees as possible," said HOM President and CEO Rod Johansen, projecting a reduction of about 10%.
HOM said it approached Gabberts several times over the past five years about a possible acquisition, and the Gabberts board agreed that now was the right time to sell, Gabbert said.
Gabberts, once a Top 100 company, has struggled in recent years. In 2006, it shut down its remaining operations in the Dallas-Fort Worth market, where it once operated three stores. The following year, it completed a multimillion project to reposition and redesign its remaining store in Minneapolis to better appeal to today's upscale consumers. Among other changes, it scaled down the showroom from more than 90,000 square feet to 63,000 square feet.
"The home furnishings industry has gone through dramatic changes over the last decade, making it very difficult to sustain a single-store, independent retail operation even in a great economy with great people doing great work," Gabbert said.
"It's become impossible for us to do it in today's economy. While it's been a difficult decision, we're pleased Gabberts will continue to be independently owned and operated by a Minnesota-based, family-built brand. We can't think of a better organization to carry on the Gabberts legacy."
HOM, now with 13 mid-priced stores in Minnesota, South Dakota, North Dakota, Iowa and Wisconsin, was ready to expand its business portfolio with an established retail brand into the high-end segment, said Johansen. "Rather than build a brand, we acquired the best high-end retail brand in the upper Midwest. We plan to honor and leverage 62 years of Gabberts brand heritage and an award-winning interior design team to markets currently underserved at the premium level."
