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Furniture Brands Files For Bankruptcy

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Furniture Brands International Inc, which is one of the largest manufacturers of furniture in the US, filed for bankruptcy with a deal to sell assets to Oaktree Capital Management, an investment firm, for $166 million. The ST Louis furniture maker that makes brands such as Broyhill, Drexel Heritage, Lane and Thomasville is selling all of its assets apart from its Lane business to the Los Angeles Based Oaktree but subject to higher bids at the bankruptcy auction. The company said that it would consider alternative bids for the Lane business and added that it had received several signs of interests from probable acquirers.

Furniture Brands Files For BankruptcyFurniture Brand has listed assets worth $546.7 million and a debt of $550.1 million in the initial petition that it filed with the US Bankruptcy Court. Just like the other domestic manufacturers of furniture, Furniture Brands had been hurting from the persistent effects of foreign competition and the recession. In 2012, the company had sales of around $1 billion which is roughly the half of the total sales it was making a decade ago. In the last two financial years, the company had a loss of $91 million and analysts are also predicting another loss in the year 2013. Furniture Brands has not made profit since 2006.

The debt of the company includes a $50 million term loan from the Sycamore Partners affiliate, Pathlight Capital. Earlier this year, Pathlight assigned the loan to Oaktree. Oaktree is seeking to use some of the debt from the company that it controls so as to purchase the assets from Furniture Brands. Besides serving as the lead bidder, or the stalking horse, for most of the assets of Furniture Brands, Oaktree is also offering $140 million in bankruptcy financing for the funding of the company’s business as it restructures under the Chapter 11 protection.

The company expects to complete the auctioning of the Lane in the coming 30 days and the selling of the other assets to Oaktree or to a rival bidder in a period of 140 days. In a statement, Ralph Scozzafava, the Chief Executive, said that the process of Bankruptcy is the best solution in long-term for the company to address its liquidity challenges. He added that Furniture Brands’ portfolios included some of the most respected brands in the industry and that the company was pleased to be entering into a partnership with Oaktree, a company that has a lot of experience in working with Furniture Brands and also other companies in the furniture industry.

The company’s existing lenders include Bank of America Corp, Wells Fargo & Co., and General Electric Co which agreed to provide the company with up to 200 million dollars in financing in an asset-based revolving loan some months ago. The company also owes over $200 million in pension obligations that are yet to be paid. At the end of 2012, the company employed 3,500 people overseas and another 5,600 people in the United States. In the month of May, Furniture Brands started a stock split of reverse one-to-seven so as not to be delisted. However, the move was not enough to prevent the slide of the stock and the company’s stock was trading at 24 cents per share in the afternoon of Monday.

Mobile eCommerce growing twice faster than the traditional channels

| eCommerce | No Comments

A report from comScore has revealed that mobile eCommerce has been growing two times as fast as the traditional eCommerce and that one out of ten dollars in commerce are currently being spent on either a tablet or a smartphone. comScore, which has been tracking the mobile eCommerce since 2010, has reported that during that period, the spending has increased by sixfold to reach $4.7 billion in the 2nd quarter of 2013. This represents a 24% increase from the 2nd quarter of last year. Also, mobile commerce (mcommerce) spending has accounted for $10.6 billion in the 2013’s 1st half, a figure that represents 10 percent of the entire eCommerce during that period.

Mobile eCommerceSince spending always increases during the holiday seasons at the end of the year, comScore forecasts that the eCommerce haul for the year 2013 could hit $25 billion. In just 3 years, mobile commerce has risen from just a few billions to more than $20 billion in terms of sales annually. It is therefore not a surprise that many companies and organizations have been rushing to slot in as much mobile technology as they can and within the shortest time possible. The small fraction of the huge mobile pie has even become just too large to ignore. The figures could even be higher for the enterprise as comScore only uses a survey procedure to collect data meaning that they more often than not focus on consumers. While most of these consumers often use enterprise technology in one form or the other, most of the tickets being tracked in this case are for apparel, event tickets, consumer packaged goods and computer hardware.

In the space of B2B, mobile buying is in fact not that common but due to the fact that there are very many digital parts alongside sequence of events that result into sales for ecommerce, the players in the enterprise are raking in profits as well. There is therefore no doubt that mobile buying in the enterprise space will increase over time, but it will not be nearly as fast as it will grow in the consumer space.

During the survey, comScore has also found out that the smartphones are by far much more widespread than the tablets. This means that the smartphones are responsible for the bigger fraction of ecommerce. However, it was found out that the tablets are accountable for a more average spending per device. This has been ascribed to the fact the tablet owners are more likely to be rich and that the large screen size of the tablets produces an experience like that of the desktop. Owners of the tablet have been found to spend close to 20 percent more than the owners of smartphones in spite of being outnumbered by 2 people to 1. It therefore seems that a good deal of rise in the mcommerce can be attributed to the tablets given the fact that they are to some extent a more new phenomenon.

With an accurate breakdown of these sorts of mcommerce numbers, organizations are enabled to be more accurate when it comes to their mobile strategy, something whose importance will only continue to increase.