ST. LOUIS, MO

— Furniture Brands International (NYSE: FBN) said sales rose $296.2 million, an increase of 2.3% versus the second quarter of

 Furniture Brands Q2 sales rise, but loss grows
 Furniture Brands Lane semi-truck promotes the brand for home entertainment furnishings across the country.

2010, but it lost $6.6 million in the quarter, versus earning $4.2 million during the year prior quarter, largely resulting from a net tax benefit of  $5.3 million from tax loss carrybacks exercised in the 2010 period.

A bright spot for Furniture Brands were sales at 45 company-owned stores owned more than 15 months, where sales rose 8 percent. This was the sixth consecutive quarter of same-store sales growth. Furniture Brands owns 66 stores, down from 71 a year ago.

CEO Ralph Scozzafava says Furniture Brands will complete manufacturing facilities in Indonesia and Mexico to deliver components and finished product at lower costs; and invest in a 2012 SAP computer system roll-out to create centralized information systems

"The initiatives we have implemented to drive our sales are gaining traction, including increasing consumer tested product, new product introductions that are resonating with customers," said Ralph Scozzafava, Chairman and CEO.  Net sales were roughly flat versus the first quarter of 2011.

Margins declined slightly  to 24.8% from 25.7% the year prior "largely due to increased raw material costs and higher inventory charges," the Furniture Brands said in its SEC filing.

"We are making investment decisions that we believe are critical to the longer-term health of our Company," Scozzafava said. "These include investing to complete our manufacturing facilities in Indonesia and Mexico, both of which will deliver components and finished product at a lower cost than would otherwise be possible. They also include expenditures related to our 2012 SAP first-phase implementation that will ultimately create centralized information systems, timely access to business information, more rapid read and response time, as well as reduced costs to operate the business."

Over the past two years, Furniture Brands has been transforming the company from a holding company to an operating company., so its  multiple brands (Broyhill, Lane, Thomasville, Drexel Heritage, Henredon, Hickory Chair, Pearson, Laneventure, Maitland-Smith, and Creative Interiors) can take advantage of synergies that come from having a $1 billion worth of purchasing leverage for raw materials, transportation, sourced products, and support services.

Consolidating common functions into a single shared services organization include supply chain management, human resources, finance and accounting, credit and collections, information technology, consumer insights and marketing. This the firm says allowed elimination of redundant staffing and resources, and longer term benefits from sharing best practices and achieving increased speed and agility in decision making.

Furniture Brands has a global supply chain of 17 company-owned domestic and international furniture manufacturing plants, in addition to its Asian and South American contract furniture manufacturers

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