The CFO is preparing to acquire a furniture manufacturer as the company faces sharply rising demand and long-term questions about how it will continue to grow once the housing renovation boom is over.
This week, a company in Monroe, Michigan, known for its regenerators…
his CEO, a long time, successful CEO.
who is retiring. The changes will take effect on June 25. April in operation.
Ms. Whittington has been Chief Financial Officer of La-Z-Boy since 2018 and previously held the same position at La-Z-Boy.
Allscripts Healthcare Solutions Inc,
Medical technology company. Robert Lucien, Vice President of Finance for the Company, will succeed Ms. Whittington as Chief Financial Officer.
The furniture industry has benefited from recent changes in consumer behaviour following the closure of shops and factories at the start of the pandemic. Due to virus restrictions and the shift to telecommuting, people are spending more time at home, which means they have to pay more for things like furniture.
Melinda Whittington, CFO of La-Z-Boy, will be named CEO on April 25.
At La-Z-Boy, chain-wide sales increased in the year ended March 23. The January quarter ended with an increase of 6.3% compared to the same period of the previous year. In the previous quarter, which ended on the 24th. At the end of October, it was up 34%.
Usually you’re trying to make an application. We’re trying to build furniture to meet that demand, Whittington said.
This is a challenge where Ms. Whittington represents as executive director. Covid-19 infections and employee quarantine requirements delayed production and exacerbated other pandemic-related problems, such as delivery delays. La-Z-Boy has plants in Tennessee, Missouri and Arkansas, as well as in Mexico. Operating revenue, a measure of sales from completed orders, fell 6.3% in the latest quarter from the previous year, and profit fell 15% to $29.2 million.
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La-Z-Boy and the industry were really impressed, said Bradley Thomas, Managing Director of investment bank KeyBanc Capital Markets. Sales of furniture and home furnishings rose 9.3% in January from a year earlier, according to the latest report from KeyBanc, which relies on data from the U.S. Census Bureau. This is up from 5.7% in December.
La-Z-Boy has taken measures to increase capacity. Last year, the company reinstated employees who were on leave and temporarily opened a tapestry shop in Newton, Miss. that was supposed to close permanently. But the company has limited options because it will take months to train the temporary workers and the facilities are already at full capacity, Whittington said.
The company is actively recruiting to increase capacity and eliminate the backlog, she said. At the beginning of the pandemic, the company laid off 6 800 workers and made 850 permanent layoffs, including closing the Newton plant. The current population is about 10,000, about the same as at the beginning of the fiscal year last April.
Our employees have already worked so much overtime that there are no extra shifts to make up for this, said Whittington, who added that it will take months for the company to catch up. Delivery times are now five to nine months, compared with four to six weeks before the pandemic, the company said.
Ms. Whittington chose a relatively unusual path to becoming CEO. Only about 7% of senior executives at Fortune 500 and S&P 500 companies were promoted to CFO by 2020, and that figure has barely changed in recent years, according to recruiting firm Crist|Kolder Associates. According to analysts and recruiters, many companies are looking for candidates with strategy and experience, such as B. from the business world.
Ms. Whittington stated that she gained this experience as CFO of La-Z-Boy. She stated that throughout his tenure, Mr. Darrow, the Company’s CEO, involved her in meetings on issues related to manufacturing, the supply chain and other business units, particularly as the succession plan took shape. He also presented it to industry leaders, suppliers and customers, she said.
Robert Lucien, Vice President of Finance for La-Z-Boy, will succeed Ms. Whittington as Chief Financial Officer.
La-Z-Boy is trying to maintain growth after consumers cut back on home improvement spending and increased vaccination, Whittington said. Number twenty-three. In January, the company had $393 million in cash, more than double the same period last year. This is mainly due to prepayments by customers on individual written orders, for which a 50% deposit is required in the company’s own stores, and online sales, some of which are paid in full.
Acquisitions are among the company’s options, she said. In 2018, La-Z-Boy bought Joybird, an online furniture retailer that caters to young shoppers. The company also buys individual stores from independent retailers who license the La-Z-Boy brand and sell their furniture. From the age of 23. In January, the Company owned 45% of a chain of 351 independent furniture stores.
This gives us the opportunity to decide what to do next, Ms. Whittington said of the company’s cash reserves.
How will the pandemic affect retail sales in the US? As states across the country try to revitalize commerce, the WSJ examines retail trends and how consumers can shop in a post-pandemic world.
Email Christine Broun at Kristin.Broughton@wsj.com.
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