Retailers strike positive note over FBI bankruptcy
Clint Engel -- Furniture Today, September 10, 2013
HIGH POINT — With Furniture Brands International's bankruptcy filing finally behind it and court pending financing lined up, retailers attending Premarket here were largely optimistic the news will lead to better times for Thomasville, Broyhill and FBI's other companies. (See video at bottom of page with Ray Allegrezza, editor-in-chief of Furniture/Today).
"It sounds all good - plenty of cash, plenty of capital," said Fred Hudson, CEO of Sanford, Fla.-based Hudson's, which does business with Broyhill, Lane and Thomasville.
"I think it's exactly what FBI would have hoped for."
In a release announcing its Chapter 11 bankruptcy filing, FBI said it's pursuing a sale to affiliates of funds managed by Oaktree Capital Management, which would acquire substantially all of the assets of Furniture Brands except Lane. Oaktree's $166 million bid would be the starting point in a court-approved auction process.
Oaktree also has committed to $140 million in debtor-in-possession financing,
Hudson and other retailers appeared pleased by the news, with Hudson noting he had some service issues prior to the filing, "but I think this will fix the problem."
Alan Kramer, vice president of merchandising for Houston-based Star Furniture, said the retailer hasn't experienced much disruption from its Furniture Brands sources, which include key resource Thomasville, but also Broyhill and Lane Venture.
"Hopefully, this will be a positive thing, that they'll be able to regroup and stay in business," Kramer said. "We've stayed with them, plan on riding it out and hope for the best."
Jerry Baer, senior vice president of Pompano Beach, Fla.-based Baer's, said that while bankruptcies are always a shame because some people are bound to get hurt, "I'm glad it's behind them and we can move forward without as much over their head."
Baer's, he noted, does a lot of business with FBI companies, including Henredon, Drexel Heritage, Thomasville, Broyhill, Lane and Maitland-Smith.
"From what I've heard and read, I think they've got it set up pretty well," he said, noting the plan the Oaktree acquisition.
"Having the bankruptcy behind them is a good thing," he said. "It should take a lot of the questions out of inventory flow.
"My hope is it works out really well. That's what I'm counting on."
Matt Huber, vice president of merchandising for Dulles, Va.-based Belfort Furniture, was more cautious in his early appraisal of the news. Belfort sells Broyhill, Lane, Drexel Heritage and Lane Venture, and the impact of limited communication from Furniture Brands prior to the filing has been felt all the way down to the retail floor, he said.
It's made it difficult to make merchandising decisions, adding, "We have savvy sales people who only want to sell things that can be delivered"
While Huber is hoping for the best, he still wants to know more about the proposed investor's vision for each brand going forward.
"I'm hoping by October market, everything will be settled, and that it's very clear how this is going to progress," he said.