Competition, delays hamper American
Larry Thomas -- Furniture Today, March 11, 2013
ECRU, Miss. - Promotional upholstery producer American Furniture Mfg. reported a 13.2% sales decline in 2012, but the company reduced its operating loss to $1.52 million.
In a Securities and Exchange Commission filing by parent company Compass Diversified Holdings, the upholstery company's sales were listed as $91.5 million, down from $105.3 million in 2011.
Compass said the continued soft retail environment and increasing competition in the promotional furniture segment contributed to the sales decline. In addition, a delay in receiving cut-and-sewn fabric kits from American's Chinese supplier resulted in about $1 million in lost sales in the first quarter of 2012.
American's two largest retail customers, Value City Furniture and Big Lots, each accounted for about 12% of the company's sales, according to the filing.
During the year, the company worked with a consultant to develop a new system of ordering fabric kits to provide a more efficient flow of goods and reduce the chances of having obsolete inventory.
In addition, American hired former Bauhaus USA president Al Wiygul as its CEO in October and named furniture industry veteran Randy Spak as vice president of sales in November.
The 2012 operating loss was well below the $35.2 million operating loss reported in 2011, a year that included $26.7 million in non-cash asset impairment charges.