La-Z-Boy
 | |
| Type | Public (NYSE: LZB) |
|---|---|
| Industry | Furnishings |
| Founded | 1927 |
| Headquarters | Monroe, Michigan, U.S. |
| Key people |
Edward K. Knabush Edwin J. Shoemaker |
| Products | Upholstered furniture and casegoods |
| Revenue | $2 billion |
| Website | www.la-z-boy.com |
La-Z-Boy, Inc. is a furniture manufacturer based in Monroe, Michigan, USA which makes home furniture, including upholstered recliners, sofas, stationary chairs, and sleeper sofas. The company employs more than 11,000 people.
La-Z-Boy furniture is sold in thousands of retail residential outlets in the United States and Canada, and is manufactured and distributed under license in other countries including the United Kingdom, Germany, Indonesia, Italy, Japan, Mexico, New Zealand, Turkey and South Africa.[1] La-Z-Boy holds US and international patents on more than 200 different styles and mechanisms.
La-Z-Boy Incorporated is divided into three reportable operating segments: the Upholstery Group, the Casegoods Group and the Retail Group. The Upholstery Group primarily manufactures and sells upholstered furniture to furniture retailers and proprietary stores. This includes recliners and motion furniture, sofas, loveseats, chairs, ottomans and sleeper sofas. The Casegoods Group primarily sells manufactured or imported wood furniture to furniture retailers, including tables, chairs, entertainment centers, headboards, dressers, accent pieces and some coordinated upholstered furniture. The Retail Group consists of 70 company-owned stores in the US. The Retail Group sells mainly upholstered furniture to end consumers through the retail network.
La-Z-Boy includes various companies and brands including La-Z-Boy Residential, La-Z-Boy Kids, La-Z-Boy Hospitality, Lea Furniture, American Drew, Kincaid Furniture, Bauhaus USA Furniture, Hammary Furniture and England Furniture Incorporated.
History
Early history
In 1928 cousins Edward M. Knabusch and Edwin J. Shoemaker partnered and invested in the furniture business in the small town of Monroe, Michigan. They set out to design a chair for what they called "nature’s way of relaxing."[1] Using orange crates to mock-up and refine their idea, they invented a wood-slat porch chair with a reclining mechanism. Knabusch and Shoemaker then upholstered their innovation and marketed it as a year-round chair. The chair was a success; they held a contest to name it—La-Z-Boy was the winner.[2]
In 1969, after years primarily as a manufacturer of recliners, La-Z-Boy started designing other products including reclining sofas, sleep sofas and modular groups.[2] 1981 sales were $150 million.[3] In 1983 La-Z-Boy introduced its first line of stationary sofas and occasional chairs, later offering a full line of home furnishings.[2]
The LADD Furniture deal, decline, and recovery
Richard R. Allen, Don A. Hunziker and William O. Fenn borrowed $70 million to buy Lea, American Drew and Daystrom from Sperry & Hutchinson in 1981. LADD, whose name came from the three companies, began trading publicly in 1982.[4] LADD was the third-largest American maker of furniture for homes, with over $600 million in sales, when it bought six Maytag businesses in 1990.[5] LADD Industries moved from High Point, North Carolina to Grandover in Greensboro, North Carolina in November 1997, becoming the first company to locate its headquarters there. At the time it was the fifth-largest American furniture maker, with $500 million in sales, and the brands American Drew, American of Martinsville, Barclay, Clayton Marcus, Lea, Pennsylvania House and Pilliod.[6] In September 1999, La-Z-Boy, at the time the largest American upholstered furniture manufacturer, bought LADD, the seventh-largest American furniture maker, for $197.8 million in stock and $101.5 million in assumed debt. Saul Cutler of BDO Seidman said the deal "sets up La-Z-Boy as an industry behemoth."[4][7] The deal, approved in January 2000, gave La-Z-Boy $2 billion in sales and made it one of the country's two largest furniture makers, Furniture Brands International being the other.
On July 23, 2001, La-Z-Boy announced the LADD name would cease to exist. John J. Case, president of La-Z-Boy Residential, moved to head the new La-Z-Boy upholstery group, which included Bauhaus, Centurion, Clayton Marcus, England, HickoryMark, La-Z-Boy, Sam Moore and La-Z-Boy Contract Furniture. Don L. Mitchell, who headed the LADD casegoods group, would take the same job at the La-Z-Boy casegoods group, including Alexvale, American Drew, Hammary, Kincaid, Lea, Pennsylvania House, Pilliod and American of Martinsville.[4][8]
Competition from China hurt many American furniture makers, and particularly La-Z-Boy's strategy of buying LADD to improve its casegoods position. In 2005, La-Z-Boy chairman Pat Norton called the LADD deal "the biggest mistake that I have ever made in the furniture industry."[9] Pilliod was the first LADD division sold, to Michels & Co. in December 2001. Barclay was closed. American of Martinsville was sold to Hancock Park Associates in November 2006.[10] Sixteen of the former LADD plants had been sold or closed.[9] On September 6, 2007, La-Z-Boy announced the sale of Pennsylvania House to Universal Furniture. Later that month came the sale of Clayton Marcus to Sun Capital affiliate Lexington-Rowe, leaving only American Drew and Lea among the LADD divisions. Also sold was the Sam Moore division, in February 2007 to Hooker Furniture. La-Z-Boy was still number three, with $1.5 billion in shipments.[10]
In November 2006, High Point offered $600,000 to the La-Z-Boy division that was formerly LADD to move its headquarters back.[11]
Late in 2006, La-Z-Boy had 7000 employees, down from 13,000 six years earlier. The company began working on its image, telling consumers the company offered more than recliners. The company reduced its warehouses from twelve to five and announced plans to add 50 New Generation stores to the 334 the company already had; half of those used the new format already.[3]
Licensed manufacturers
In 1970 Morgan Furniture of Takapuna, New Zealand, founded by Jack Morgan, commenced manufacture of the La-Z-Boy recliner for Australia and New Zealand. In September 2007 his son Graham Morgan announced that the company was to import the furniture from China and Thailand with the loss of around 200 Auckland manufacturing jobs.[12]
References
- ↑ 1.0 1.1
- ↑ 2.0 2.1 2.2 "Our History - Official La-Z-Boy Website". La-z-boy.com. Retrieved 2012-04-28.
- ↑ 3.0 3.1 "La-Z-Boy Feels Energetic about Future: Company Is Restructuring to Return the Brand to Profitability," Winston-Salem Journal, August 30, 2006, p. D1.
- ↑ 4.0 4.1 4.2 Mark Binker,"LADD Takes La-Z-Boy Name: Former LADD Companies Will Now Work Under One of Two La-Z-Boy Divisions," Greensboro News & Record, July 24, 2001, p. B7.
- ↑ David Mildenberg, LADD's Plant-Closing to Eliminate 240 Jobs," Greensboro News & Record, February 21, 1990, p. A8.
- ↑ Scott Andron, "LADD Celebrates New Headquarters," Greensboro News & Record, December 5, 1997, p. B8.
- ↑ "La-Z-Boy to Acquire Ladd Furniture". Los Angeles Times. Associated Press. 1999-09-30. Retrieved 2012-10-26.
- ↑ Fran Daniel, "Restructuring of La-Z-Boy Creates Two New Groups," Winston-Salem Journal, August 2, 2001, p. D1.
- ↑ 9.0 9.1 Richard Craver, "The End of an Era: Furniture Manufacturing in the Triad Has Suffered Thousands of Job Losses in Face of Rising Tide of Imports," Winston-Salem Journal, October 9, 2005, p. D1.
- ↑ 10.0 10.1 Richard Craver, "Sun Gets New Deal: La-Z-Boy to Sell Clayton Marcus to Lexington-Rowe," Winston-Salem Journal, September 14, 2007, p. B6.
- ↑ Sue Schultz, "La-Z-Boy gets incentive from High Point," Greensboro News & Record, November 7, 2006, p. B2.
- ↑ Taylor, Cliff (16 September 2007). "La-Z-Boy shifts to China". The New Zealand Herald. Retrieved 13 October 2011.