Furniture Brands heading toward bankruptcy?
Shares of Furniture Brands International Inc., which has a major presence at the High Point Market and in North Carolina home furnishings, continued dropping this week after an analyst said he believes the company is headed toward liquidation or bankruptcy.
The St. Louis Post-Dispatch reports that John Baugh, an analyst with Stifel Nicolaus, said Wednesday his firm believes some form of liquidation or a bankruptcy filing is “imminent” for Missouri-based Furniture Brands.
Furniture Brands is the parent company of key home furnishings lines such as Thomasville, Drexel Heritage, Henredon, Hickory Chair, Maitland-Smith and Pearson. Its brand names have a significant showroom presence at the High Point Market.
The company’s shares dropped 12 percent Wednesday and had fallen 17 cents to $1.20 a share by market close. The price was $1.16 at mid-day Thursday. Furniture Brands shares had also fallen 38 percent Tuesday on a report of a second-quarter loss of $41 million.
Furniture Brands says it doesn’t comment on analysts’ reports and would not comment beyond what was already stated in Tuesday’s second-quarter earnings announcement.
In its earnings release, Furniture Brands said “that in order to address its liquidity challenges and improve business performance,” the company would implement moves to reduce costs, pursue sale of assets and negotiate with its lenders to modify its credit.
“Our financial performance in the second quarter was below our expectations,” said Ralph Scozzafava, chairman and chief executive officer. “Continued solid top and bottom line performance of our designer brands and improving sales and order trends at our
Thomasville owned retail stores were once again significantly overshadowed by the challenges we are facing in stabilizing sales and profitability in our wholesale businesses.”
Scozzafava said that Furniture Brands is conducting a full strategic review of its business and has engaged outside advisers on the effort.