Bestar posts small loss as 4Q sales decline 9.8%

Michael Knell -- Furniture Today, March 31, 2011

LAC-MEGANTIC, Quebec - For the third consecutive year, ready-to-assemble and furniture component producer Bestar suffered declining sales in 2010 while posting a net loss.

Gross revenues for the fourth quarter of $7.5 million were down 9.8% from the same period of 2009. Bestar nearly broke even with a loss of C$1,752 or zero cents per share, compared with a loss of C$337,452 or three cents per share a year earlier.

For the full year, gross revenues of C$33.7 million were down 9.2% from the previous year, and the net loss was C$849,161 or seven cents per share, compared with a loss of C$64,226 or one cent per share for 2009.

Historically, 60% or more of Bestar annual volume has been shipped to retailers in the United States, making the company particularly sensitive to fluctuations in the currency exchange market. For most of 2010, the Canadian dollar flirted with par against its U.S. counterpart resulting in a gain of C$236,439 for Bestar, but that was down from a C$774,123 gain in 2009.

During the year, Bestar also won changes to the collective bargaining agreement with its employees. Coupled with concessions secured from non-unionized staff, the company said it was able to forgo planned layoffs while limiting the annual loss.

"The measures taken during the last year will also contribute to the improvement of the 2011 results," company President Daniel Mercier said in statement. "Thus, we foresee a return to profitability in the first quarter of 2011, in spite of sales lower than those registered for the same quarter in 2010."

Mercier also noted that Bestar has secured a financing agreement with Wells Fargo Capital Finance Corp. Canada, replacing a previous one with the Laurentian Bank.

On the merchandising side, Bestar launched its redesigned website as well as its new corporate image and logo. This year will see a renewed focus on its furniture business that began with recent introduction of two new modular collections for the home and small office, officials said.

Mercier also said Bestar is in the first steps "of a five-year process having the objective of offering to the market a totally renewed range of products."