Southerland, Inc. announced the purchase of the company by employees through an Employee Stock Ownership Plan (ESOP). The acquisition, which was announced March 1st, was completed May 17, 2010. It is a first for the company and, to a large extent, the furniture and bedding industry.
The new, employee-owned Southerland is being led by two co-presidents, David Corbin and Stephen Russo, and executive vice president and CFO Bryan Smith. Marty and Trey Southerland, as well as other Southerland family members, are remaining with the company in key roles.
"We’re proud of the products we make and the company we’ve become," said Herman Southerland, who has retired as Southerland’s chairman and CEO. "Southerland has operated as a family-owned enterprise for more than a century. During that time, we’ve become one of the leading independent bedding manufacturers in the U.S. Today, looking back at what we created together, I’m especially proud to be a company employees want to own and carry forward."
Over the past nine years, Southerland has grown into a three facility operation headquartered in Nashville, with additional facilities in Oklahoma City and Phoenix. These facilities offer scalability and capacity ideally suited for the company’s plans for further growth and distribution.
The move from family-owned to an ESOP-owned structure and recapitalization was led by the new executive leadership team. Under the new ESOP, employees own 100 percent of Southerland. The ESOP structure will offer tax efficiencies for the company as well as incentives and an exceptional retirement benefit for employees.
Under the new leadership team, Southerland will continue to develop its own brands as well as private label brands for regional bedding retailers. In addition to directing the day-to-day operations, Southerland’s new management team will focus on innovative and consumer-focused product development, a diversified licensed brand portfolio, optimization of its cost structure through lean practices, strategic sourcing and value-added sales efforts.
Corbin and Russo have been working as consultants with Southerland since mid-2009. Corbin is a marketing, new product development expert and brand management specialist with experience at Procter & Gamble, Pulaski Furniture Corporation and Chromcraft Revington. Russo is an operations specialist who successfully ran Latex International, Consolidated Bedding and Restonic Mattress. Bryan Smith is a CPA and finance/accounting specialist and a long-standing member of the Southerland management team.
About ESOPs: Though not as visible as they once were, several of today’s category-leading companies are managed through ESOPs. Those companies include: Publix Super Markets, Inc.; Procter and Gamble Co.; The Sherwin-Williams Company; and Anheuser-Busch Companies. Statistics published by the ESOP Association show that the majority of employee-owned businesses benefit from improvements in information sharing, increased communications and involvement.
A comprehensive study out of Rutgers University showed that ESOP companies stayed in business longer and were more likely to continue operating as independent companies over the course of several years. Research done by the Washington State Department of Community, Trade and Economic Development showed that ESOP not-publicly-traded companies paid better benefits, had twice the retirement income for employees, and paid higher wages than their non-ESOP counterparts.
About Southerland: Southerland, Inc. was founded in 1893 in Nashville, Tennessee, and, prior to being purchased by employees, was family-owned since its inception. Throughout its history, Southerland earned and developed its reputation as a quality producer of value-oriented bedding.
From the original manufacturing site in Nashville to the opening of new facilities in Oklahoma City and Phoenix, Southerland serves customers nationally as well as through regional focus areas throughout the East, Southwest and Midwest areas of the country. The company operates more than 274,000 square feet of combined production and distribution facilities and is one of the leading independent bedding manufacturers in the U.S.