U.S. Leisure expanded its plastic furniture business June 23 by acquiring U.S. Industries Inc.'s Stanley, N.C.-based operation.
The deal represents the third sale of the Stanley operation in about three years. Its original owner, Rubbermaid Inc., sold it to Sunbeam Corp. in 1994. About three months ago, U.S. Industries of Iselin, N.J., acquired it as part of Sunbeam's outdoor furniture business. The Stanley business had an operating loss of about $3.7 million on sales of $37 million last year, according to a U.S. Industries news release.
Stanley will help U.S. Leisure keep up with growing furniture demand among mass merchandisers and will give it an additional distribution point to help cut costs, Bill Echols, U.S. Leisure president, said in a telephone interview. U.S. Leisure injection molds outdoor furniture, juvenile monobloc furniture and lawn and garden items at Alexandria, Ind. Its furniture business is ``significantly larger'' than the one in Stanley, he said.
Echols said U.S. Leisure can use the excess capacity, and Stanley complements U.S. Leisure because its products, sold mainly to mass merchandisers, are midpriced while U.S. Leisure has focused on low-priced furniture.
U.S. Leisure is owned by Resin Partners Inc. of Carmel, Ind., which in turn is owned by Keter Plastics Ltd. of Herzlia, Israel. Echols said the U.S. Leisure name ``has been around for years'' but the current owner bought it out of bankruptcy about five years ago. Roughly 10 percent of U.S. Leisure's sales are imported large products such as tables from its Israel affiliate.
U.S. Leisure paid $10 million in cash and a $2 million secured note due Sept. 15 for most of the Stanley operation. Not included was about $1.5 million worth of injection molding equipment U.S. Industries will move to Parkersburg, W.Va., where its Ames subsidiary operates Southeastern Plastics. U.S. Industries expects to net another $6 million in cash and tax benefits from disposal of other assets of the plastics furniture business excluded from the sale.
David Clarke, U.S. Industries chairman and chief executive officer, said the sale eliminates an unprofitable operation and allows the company to focus on its market-leading metal outdoor furniture products. Since U.S. Industries classified Stanley as a ``discontinued operation'' when it bought it, U.S. Industries will not record a gain or loss from the transaction with U.S. Leisure.
U.S. Industries paid $84.5 million for Sunbeam's entire outdoor furniture business earlier this year. The Stanley-based business was part of its Sunlite Casual Furniture Inc. subsidiary.