Reactions mostly upbeat
Clint Engel -- Furniture Today, September 16, 2013
HIGH POINT -Furniture Brands International's bankruptcy filing, along with the news that it has financing lined up and investors ready to buy the businesses, has retailers and others in the industry largely optimistic this will spell better times for Thomasville, Broyhill and FBI's other storied brands.
That's not to say there are happy faces all around. Some expressed sadness for how far FBI and its core businesses have fallen and concern for the workers and for mer employees, some of whom may lose their jobs or see a cut in pension benefits.
Wolf Furniture of Bellwood, Pa., carries both Broyhill and Lane, and while it didn't drop the lines in the midst of FBI's troubles, it did grow cautious in its buying, avoiding special orders from these lines, for example, said CEO Doug Wolf. He said the filing and proposed asset sales were good news.
"It makes us hopeful there could be some future for some of these brands in our company, so it does make a difference for us," Wolf said. "We view it as positive whereas before it was looking pretty bleak."
In 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 and a rival bidder already has emerged.
In a hearing this past week, the court gave interim approval to Oaktree's proposed $140 million in debtorin-possession financing, and in court documents, FBI said it has received interest in the Lane business, which it expects to sell within 30 days.
"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."
Hudson added 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."
He said Baer's 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 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 salespeople 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.
Some in the industry commented on the brands' reputations and the troubles that may still await some FBI employees as it works through the bankruptcy process.
"It is a sad day for the furniture industry to see a once great stable of companies filing for bankruptcy," said Roy Calcagne, president and CEO of a competing manufacturer, Craftmaster Furniture.
Calcagne recalled buying from many of the FBI companies during his buyer days at Macys in the'80s and '90s. He also sold fabric to some of the FBI companies while at Joan Fabrics and worked at Broyhill for five years.
"These companies were all great individually at one time," he said. "They represented the best of the best within the furniture industry. They had recognized brand names and were known for the best quality, fashion and service."
Ben Radoll, director of sales operations for Broyhill, said at Premarket that he is confident about the brand's future.
"We've had very positive conversations with buyers. They like the idea of clarity; no one likes ambiguity," he said.
"We're in total go-forward mode," Radoll added. "We've got an action plan and the idea is to execute it."
Radoll said Broyhill had one of its strongest premarkets in years, with about 70 dealers coming in over the two-day event. In addition to product for the fall market, the company had some introductions to preview for April.
"We're doing a lot of things for a lot of people and are playing it pretty wide open," he said. "There is something here for everybody. We are certainly on a path where we want to be."