Today, FBN is the very definition of the term "brutal sell-off."
From time to time here I've seen intelligent comment from people who are (apparently) knowledgeable about the furniture industry. My investment here has been based upon a belief that the brands have value and, sooner or later, that value will be borne out -- either though a management change or a sale.
That said, I stumbled today on a September 2009 furniture industry report by a "turnaround management firm" that seems prescient, including this graph:
"This is a time to put a management team together that is focused on building a brand that will withstand the ups and downs of the economy and give the consumer of their products a reason to buy. The alternative is to compete with the low-cost producer and private label brands. In that type of scenario, the company’s destiny will forever be dictated by others such as suppliers and retailers that will put margins under continuous pressure. The ability to make money will be diminished and may mean the eventual liquidation of many within the furniture sector."
Kind of scary in light of today's earnings report. Housing and the economy are coming back, and others (Ethan Allen, for example) seem to have come out of the Great Recession of 2008-09 stronger than ever. This management team is clearly floundering.. So, I ask this: Do FBN's brands even matter that much anymore? Do they have real value? Are they damaged goods? Are they meaningful only to folks like me, baby boomer types (I'm 58) who recognize them?
Brand names that FBI owns mean very little to today's furniture consumer, especially when the product offerings are lacking in excitement and intrinsic value. To many better managed entreprenurial owned suppliers have captured the market share that FBI has lost. The discounted price that they paid for the Masco companies many years ago was not cheap enough when the businesses had already lost the talent that made them meaningful. Many of the spun off companies like Lexington and others have gone on to be great businesses. It's to late see anything meaningful happen at FBI. Hopefully the Thomasville independents will find a solution to break away from this sinking ship and recapture their destiny.
I believed they would at least have a good earnings report, considering there was so much destruction caused by hurricanes and tornados to homes last quarter; not the case. And not possible to ever believe in them again,good bye.
Cash Balance of $11.9 million and debt balance of $105. million, funding pension with stock, low margins, unsellable inventory, mismanagement at all levels. Sad situation to what at one time was some wonderful companies. Its time to write the epitaph.