Sales fall 29.5% at upholstery producer American Furniture
Company cites weak retail environment, competition
Larry Thomas -- Furniture Today, August 17, 2011
ECRU, Miss. — Upholstery producer American Furniture reported that second-quarter sales tumbled 29.5% amid a weak retail furniture environment and increased competition in the promotional upholstery segment.
The company, which is owned by publicly traded Compass Diversified Holdings, said the decline was evident across all of its furniture categories - stationary upholstery, motion upholstery and recliners.
In a filing with the Securities and Exchange Commission, Compass listed American's sales for the quarter ended June 30 as $23.5 million. That's down from $33.3 million in the same quarter last year.
The filing noted that approximately $8 million of the decline was due to reduced sales to Value City Furniture, American's largest retail customer.
The quarterly operating loss for American totaled $1.6 million, reversing an operating profit of $1.19 million in last year's second quarter.
For the six months ended June 30, sales were $59.4 million, down 23.1% from $77.3 million in the first half of 2010.
The first half operating loss totaled $9.6 million, including a $7.7 million writedown in the value of goodwill. In the first half of last year, American had an operating profit of $3.9 million.