Ashley Furniture Industries Inc., reportedly studying the possibility of a sale, is sure to command strong interest from potential buyers, a leading industry analyst said Tuesday.
The Wall Street Journal reported that the family-owned Wisconsin manufacturer is working with investment bankers to explore a possible sale.
Ashley confirmed Tuesday afternoon that it is consulting with Goldman Sachs Group Inc. “in an evaluation of a variety of investment alternatives and other opportunities to enhance the future growth and continued success of Ashley.”
But the big furniture-maker’s statement, while leaving open the possibility of a sale, stopped short of saying it was under consideration.
“CEO Todd Wanek underscored that the conversations are very exploratory and that no decisions have been made to pursue any specific course of action,” the statement said.
If Ashley is indeed on the market, it will have no shortage of suitors, said Jerry Epperson, managing director of Mann, Armistead & Epperson Ltd., an investment bank in Richmond, Va., that specializes in the furniture and mattress industries. Mann, Armistead & Epperson is not involved with Ashley.
A resurgent housing market, stronger consumer confidence and rising employment all stand to benefit furniture companies, Epperson said.
“All those factors right now are very positive for us,” he said. “And if you look back five years ago, they were very negative.”
Further, he said, the 80 million-strong millennial generation — a group larger than the baby boomers — will be forming households over the next 20 years.
“We’ve got a lot of people courting home furnishing companies right now,” Epperson said.
Ashley could be the prize of the lot. With nearly $4 billion in sales last year in the U.S. alone — and perhaps another $1 billion in its rapidly growing overseas markets — Ashley is by far the country’s largest furniture maker.
It’s also the largest retailer, with about 550 Ashley Home Stores in the U.S., and more being opened abroad.
While much of the U.S. furniture-making industry suffered as Chinese imports began to soar in the 1990s, Ashley used a combination of domestic and Asian manufacturing to thrive. Over the last two decades, its sales have multiplied about 10 times over.
“It’s been the success story of the residential furniture industry for the last 20 years, outgrowing everyone,” Epperson said. “If I could have invested in it, I certainly would.
“I think that you’re going to find that the investment community, whether it’s a corporate buyer or private equity fund, is going to have a lot of interest in Ashley,” he said. “…If they do decide to put it up for sale, they’re going to get a premium price.”
Ashley is owned largely by the Wanek family. Ronald Wanek headed the company for many years, and remains chairman. His son, Todd, has been CEO since 2002.
Ashley’s roots are in Arcadia, a small city in western Wisconsin. The company has a 2.2 million-square-foot factory there — currently the firm’s largest — and corporate offices.
Ashley also maintains corporate offices in Brandon, Fla., near Tampa. Ronald Wanek and his wife, Joyce, own a house in St. Petersburg, Fla.
Beyond Wisconsin, Ashley operates manufacturing plants in Pennsylvania, North Carolina, Mississippi, California, China and Vietnam.