Zsemba acquires Distinctive Designs intellectual property

Will start making product under new labels this week

Michael J. Knell -- Furniture Today, August 24, 2011

VAUGHAN, Ontario — Private-label furniture producer Zsemba Apron & Upholstery has acquired the intellectual property rights of fellow Canadian upholstery maker Distinctive Designs Furniture.

Terms of the deal were not disclosed.

Gabor Zsemba, the company's vice president of sales and marketing, said the family-owned manufacturer has acquired the rights to the Kroehler, Kroehler Lifespaces, Distinctive Designables and Distinctive Designs brand names, merchandising programs, product designs (including styles and patterns), and catalogue as well as its customer list.

He said the first Zsemba-made products under those labels are expected to be rolled out at the end of this week.

Several industry sources have said Distinctive Designs Furniture is no longer in business. The company entered court-ordered protection under the Company's Creditors Arrangement Act in 2007 and was purchased later that year by its president, Alan Kornblum. However, no member of the company's senior management team could be reached for comment this week.

Zsemba did not acquire Distinctive's factory nor any of its equipment. The intellectual property of Reflections Furniture, the metal casual dining company Distinctive acquired in November 2009, also was not included in the deal.

Zsemba, founded in 1979, has maintained a low profile in the industry as a private label upholstery producer working with major retailers in Canada, including Ikea and Sears Canada. The company also once made foam products including mattresses and toppers, but sold its foam business to Vita Foam.

Zsemba now operates a 300,000-square-foot factory and an 80,000-square-foot frame shop here and is currently producing about 3,000 pieces a week.

"Our goal was to move away from being just a private label house," Gabor Zsemba said.

The process began when it hired industry veteran Paolo Macchione as sales manager 18 months ago. This week, Zsemba and Macchione will be contacting Distinctive Designs' 130 or so retail partners and assuring them that, other than ownership, nothing has changed.

"We have even agreed to assume all warranty work for Distinctive's existing customers," Zsemba said.

Most of Distinctive's independent sales agents will continue to represent the line, he said.

Over the coming weeks, Zsemba said his management team will be reviewing Distinctive's line while devising a strategic plan to grow its sales. The company also is considering getting back into mattresses. At one time, Zsemba shipped 150,000 mattresses annually and it currently designing a foam-encased, pocket coil line that will be unveiled in the not-too-distant future.

Neither Zsemba nor Distinctive have opened their showrooms for the annual Canadian Home Furnishings Market over the past several years, something that might change over the coming weeks.

"I'm in discussions with my management team about what we should be doing about the show," Gabor Zsemba said. "I imagine we'll have some sort of presence at the show this year."