HIGH POINT, NC - Stanley Furniture recorded a $7.5 million gain after closing down its Young America youth furniture line.
Finding it couldn't compete with Asian factories, Stanley says it is now gaining ground from the design appeal in its residential furniture, sold under the Stanley brand, which saw its highest third quarter order volume in four years - traditionally a weaker period for orders, the company says.
The sale gives Stanley $20 million in cash as it finishes its third consecutive quarter operating only its Stanley brand. Still, sales declined 5 percent last quarter, while sales are flat year to date, and Stanley's operating loss declined to $378,000. (Its loss had declined $1.5 million, $1.1 million, and $665,000 sequantially in the past three quarters.)
“After sequential improvements in expense structure, adjustments of inventories to market value and successful management of our effort to discontinue roughly 40% of our company’s revenues in a customer-friendly manner, we expect to operate a cash positive business and exit the year profitably,” said Glenn Prillaman, CEO.
Production of Young America product line assets were sold or under contract. In addition to the $7.5 million, Stanley estimates another $3.5 million will come in from receivables and asset sales on the shut down of Young America.
Prillaman says he believes the prospects for Stanley Furniture sales through retailers is good.
“The demand for upscale wood residential furniture in the industry’s traditional channels of distribution remains relatively weak," Prillaman said. "The need for strong brands who market effectively and partner with retailers to attract and retain today’s consumer is greater than ever,” said Prillaman. “As an increasing number of the more efficient, entrepreneurial-minded wholesale customers in the marketplace regain confidence in our company and shop our product offerings, we expect slow but steady growth driving operating profits and generating cash.”
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