"Stanley management notes that its marketing strategy - the assurance to consumers of safe, healthful "Made in America" baby cribs and kid's furniture - was not enough to convince buyers to pay the higher price tag - twice as much as imports, according to Aeppel.
That price tag, it turns out, was not because manufacturing at its High Point, NC plant was inefficient. Stanley Furniture spent an estimated $10 million retooling its plant, and leaned-up its design and manufacturing steps. Winning a WMIA Wooden Globe Award in the process, Stanley Furniture became a low cost producer. Except for raw materials.
Because Stanley's U.S. sourced lumber supply was more costly, it was at a disadvantage to bigger buyers abroad, as U.S. lumber and veneer suppliers attended to exporting to Asian buyers."
My last post was swallowed by Yahoo for some reason. Anyhow, to recap, STLY currently shows $71.4M in tangible book value in its latest 10q filing. Subtracting $18M for the Robbinsville plant (assumes 100% loss) and dividing by shares outstanding leaves a tangible book value of $3.61 per share, some $.91 higher than the current share price. If Goldstein is the "great liquidator" you proclaim him to be, and if liquidation is the path STLY chooses to go down, what do you believe he can get for the company's assets?
Young American line was a great attempt to jump start the company! There are some tx breaks given that they have to pay back - our wonderful government at work!
Stanley Furniture is nothing more than an empty shell - they have sold all the assets/real estate to maintain operating cash....received tax incentives, some of which they will have to pay back.....I am afraid the writing is on the wall.. do some history on Goldstein - he is a great liquidator = he will come out smelling like a rose - watch
too bad....they make great solid wood furniture, and 400 employees - no job...
...sounds like Ashley was just kicking tires from the get-go with no real intention of ever purchasing.
(you can search on a snippet of text below to finds article. Yahoo won't allow me to post.)
"In an interview with the Triad Business Journal, Ashley Furniture Chairman and founder Ron Wanek said he likes everything about the plant — the facility itself and the 400 Stanley (NASDAQ: STLY) employees that Ashley would have added to its payroll.
But he said it would take several millions of dollars to get the Robbinsville facility up to where it would need to be for an Ashley operation. Wanek also said there is not a strong enough market to revive Stanley's Young America nursery and youth line that has been made there and the plant would need about 1,200 employees to run as efficiently as possible.
Wanek also said that Ashley already has "all we can handle at this time" with the completion of a more than 1-million-square-foot expansion of its Davie County manufacturing and distribution center by October. The Davie plant, which was delayed a year due to numerous delays, now has 400 employees and is expected to have at least 750 by the end of 2014."
I was under the impression that Stanley had already spent "millions of dollars" bringing the plant up to standards.
Why would they want to write off versus selling? And they must care about employees...they spent all that money attempting to make the Young American line work at Robbinsville.
I agree and one other thing. I don't know the time period but if it closes for over x number of days it can't be opened up again under its current conditions. It would have to be refitted to meet current EPA regulations. I have lived here all of my life and have seen it go from Burlington Carpets, Raleigh Road (furniture I think it was) to Stanley. It has been years since I have posted and will come back with I know more info.
That's unfortunate. I hope a buyer is found before all those 400 people are put out of work. Surely the plant is worth something to somebody at some price. It certainly does no body any good to sit there vacant.
So the plant here is still schedule for closing as Ashley is not interested. Some higher management has already bailed. There are a couple of others possibly looking but I would guess that would be wishful thinking. To think it was not all that long ago that the lumber yard was full at one time.
I agree with your analysis. I just don't sense current mgm is the group you want in place to execute this strategy. If they are serious about what they need to do firing the CEO is a must. The strategy failed. He goes. Bring in someone to streamline and it should have been already done.
But at today's price I am slowly buying. It looks like its trying to breakdown so let's hope for some good capitulation here breaking 2.50 which looks like a lifetime low.
To my mind, the relevant question for investors and the market is whether or not they can reduce SG&A quickly and efficiently enough to become cash-flow positive by the end of the year (excluding cash from the plant disposal). It was very worrying to me that they were not very forthcoming on the call about the margins for the Stanley brand. If they are truly confident in the Stanley brand's ability to be cash-flow positive, they should be buying back stock aggressively and explaining how they are going to get SG&A down.