CASE STUDY: The Lozier/L&P deal
In July 2014, Leggett & Platt announced that it had engaged an
investment banker and was “exploring strategic alternatives for the
store fixtures business, including possible divestiture.” In Leggett’s
Nov. 3, 2014, announcement of the sale of the majority of its store
fixtures operations to Lozier Corp. for total
consideration of approximately $62 million,
Leggett Board Chair and CEO David S. Haffner
said the company “remains committed to
improving or exiting business that consistently
underperform our margin and return on
Lozier acquired Leggett operations located in Middlebury, Ind.
(Syndicate Systems and Capital Hardware); Fort Worth, Texas
( Tarrant Interiors); and Union, Mo. (Spartan Showcase). These
operations represented about three-quarters of the revenues
of Leggett’s store fixture business, at $140 million to $150 million.
President and CEO Sheri Andrews views the purchase as a way
to further diversify Lozier’s business, adding capabilities in custom
wood, showcases, metal cabinetry and checkouts, pharmacy
systems, and back room systems. Such diversification is necessary
as use of basic shelving and gondola units in stores declines in favor
of specialty fixtures, she notes, adding that the purchase will allow
Lozier to better serve retailers by supplying more of the full store.
The acquisition also includes sales and design staff that expands
Lozier’s design capabilities, and importing capabilities through
an import warehouse in San Bernardino, Calif., and a small office
in Chicago. Overnight, the number of employees increased by 700
from Lozier’s original 1,800.
The near doubling of manufacturing
capacity, from 2. 4 million sq. ft. to 4. 6 million
sq. ft., will allow the company to produce most
product lines in at least two facilities. “That
provides a secure supply chain to customers
and allows us to meet peak demand seasons
and opportunities so we can continue to
optimize delivered cost,” she says.
Andrews anticipates few changes to L&P’s Store Fixture Group
management and personnel. But the Leggett plants, which
operated as separate business units, will be integrated under the
Lozier name and operating systems within 12 months. Employees
from both sides are already meeting and sharing ideas, and the
IT department has begun integrating computer systems.
For marketing purposes, the company created a Specialty
Fixtures by Lozier brand that represents the merged operations’
expanded capabilities. The combined company made its debut
at StorePoint in January in Orlando, Fla. The company will exhibit
with combined products and staff in two spaces at GlobalShop in
Las Vegas in March.
See us at GlobalShop Booth SDO 3113.