Hooker Furnishings to sell two brands for $4.8M

Martinsville-based Hooker Furnishings is selling its Pulaski Furniture and Samuel Lawrence Furniture case goods brands to Magnussen Home Furnishings for approximately $4.8 million.

The company announced the sale Monday. Pursuant to the terms of the asset purchase agreement, an estimated purchase price will be determined and paid at closing based upon the net book value of the assets being sold in the transaction. As of the end of Hooker’s fiscal third quarter on Nov. 2, the currently estimated purchase price is approximately $4.8 million subject to final adjustment to closing values, pursuant to the terms of the asset purchase agreement.

Hooker Furnishings also will shed approximately $4.8 million in Home Meridian International (HMI) showroom lease liabilities and related expenses, as Magnussen will assume the lease of HMI’s High Point showroom.

“[This] announcement is a major step in our multiyear effort to streamline our portfolio and strengthen profitability by sharpening our focus on brands that generate consistent earnings,” Hooker Furnishings CEO Jeremy Hoff said in a statement. “We are excited to move forward as a nimbler business with an efficient cost structure and clear growth priorities.

“We have promising growth opportunities on the horizon following the launch last month of our Margaritaville licensed collection,” he continued. “Together with our remaining portfolio and ongoing cost reductions of over $25 million, we are more confident than ever that we are well-positioned to enhance shareholder value.”

Hooker will retain the Samuel Lawrence Hospitality brand, which is expected to become part of its “All other” segment.

The transaction is subject to customary closing conditions, including third party consents, and is currently expected to close by mid-December. Ten percent of the purchase price paid at closing will be subject to a holdback for 210 days for customary indemnification and final purchase price adjustments.

In connection with the transaction, Hooker expects to record $5 million to $6 million in non-cash impairment charges, net of expected lease gains upon termination.

Stump & Co. served as financial adviser to Hooker, and McGuireWoods served as legal adviser in connection with the sale transaction.