The assets of Richter Furniture, a leading manufacturer of better upholstered furniture, have been acquired out of bankruptcy by an affiliate company of Buxbaum Group, the Calabasas, Calif.-based turnaround investor.
“Working in tandem with founder Braden Richter and other key members of his team, we will provide the operational assistance and funding necessary to allow this company to profitably grow its business,” said Paul Buxbaum, chairman and CEO of Buxbaum Group. “This is a young company whose excellent product line and solid client base led to rapidly growing sales. But like many other companies we’ve worked with, Richter was undercapitalized and not properly structured operationally to profit from that growth.”
Founded in 1997, the company was originally created to service leading interior designers in Los Angeles and New York. With its customer base subsequently expanding to include such major upscale retail chains as Crate & Barrel, Restoration Hardware, Pottery Barn, and Williams-Sonoma Home, the company shifted production from its 5,000-square-foot facility to a 150,000-square-foot plant on 49th Street in Los Angeles. Annual sales had grown to approximately $55 million in 2005, and the payroll had expanded to some 250 employees. But with cash flow insufficient to handle its mounting debt, Richter filed for Protection under Chapter 11 of the U.S. Bankruptcy Code on October, 5, 2005.
“We grew too quickly based on the huge success our products recently had on some of the finest retail floors in the country; it exceeded everybody’s expectations,” explained founder Braden Richter. “However, throughout this process, our customers and our vendors have been extremely supportive.”
The company’s assets were acquired from the court by Apex Design Group, LLC, a Buxbaum Group affiliate, through a 363 sale. Apex Design Group, LLC, d/b/a Richter Design, is the new operating company. David Ellis, president and chief operating officer of Buxbaum Group, will serve as CEO of the new operating company, while Braden Richter will continue to direct all design and creative work as president and creative director.
Additionally, Susan Marschke, has been recruited as chief financial officer. Ms. Marschke has worked with Buxbaum Group on a number of corporate turnarounds over the past several years, most recently as CFO of Rampage, the Los Angeles-based junior apparel manufacturer and licensor that was returned to profitability by the firm and sold earlier this year to the publicly owned Iconix Brand Group, Inc. Earlier in her career, Ms. Marschke served as CFO of Dayrunner and was previously with Deloitte & Touche.
“While we will also be looking to bring other highly qualified professionals on board to fulfill specific organizational needs, our intention is to keep the very talented team assembled by Braden intact and maintain the company’s creative corporate culture,” Mr. Buxbaum said. “In the months ahead, we will be working with Braden’s team to realign the company’s operations at all levels to more efficiently meet the delivery demands of its clientele, while maintaining Richter’s high standards for quality design, fabrics and craftsmanship. We expect that these measures will foster a return to profitability.”
“I am excited and honored to be able to work with David and Paul,” Mr. Richter said. “They have a strong history of success and bring experience and financial ability to a company that has immeasurable creativity and energy. I think the partnership could not be more perfectly balanced.”
About Buxbaum Group: Buxbaum Group, together with affiliate Buxbaum/Century, had built its reputation for over 30 years as one of the largest liquidators and appraisers of retail and wholesale inventories, as well as machinery and industrial equipment, across North America. While continuing to operate in those areas, the company has shifted its primary focus in recent years to turnaround investing along with specialty financing. Additionally, a subsidiary, Pathway Strategic Partners, LLC, provides turnaround, expansion and/or downsizing strategies, in conjunction with other advisory consulting and management services.
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