Beaulieu president says bankruptcy ‘a necessary process’
Published 9:18 am Tuesday, July 18, 2017
- Beaulieu Group President Michael Pollard, left, and Stan Bouckaert, senior vice president of special projects, stand outside the company's headquarters in Dalton in this file photo.
DALTON, Ga. — Beaulieu Group’s bankruptcy and restructuring will likely have little impact on its approximately 2,500 employees or its operations, say some industry experts.
“I do think they are going to reorganize and work out their debt,” said Dave Foster of TalkFloor.com, which covers the floorcovering industry.
Dalton-based Beaulieu Group filed for chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the Northern District of Georgia in Rome. Chapter 11 is often called reorganization bankruptcy because it allows a firm to reorganize its debt, as opposed to Chapter 7 bankruptcy in which a company is typically liquidated. In most Chapter 11 cases, the court does not appoint a trustee but allows the debtor to continue to run the business.
“Beaulieu family members and our board of managers believe pursuing a restructuring through chapter 11 is the best path forward at this time,” said Michael Pollard, president of Beaulieu Group, in a press release.
Pollard had been scheduled to be interviewed Monday afternoon but cancelled.
“This is a necessary process as we continue to execute our long-term strategic plans for the business. Our business model has changed with the industry and our client base since our current capital structure was put into place,” said Pollard. “This restructuring will allow us to invest in the business going forward and emerge a stronger organization. We remain steadfast in our commitment to our customers and employees throughout this process. I am confident that we have the talented and committed team capable of executing the reorganization plan. We appreciate the support of our vendors and customers as we move through this process.”
According to the press release, the company’s lenders have agreed to provide financing that will be combined with cash from operations “to ensure and support continued business operations.”
The 40-year-old company is privately owned and manufactures and distributes carpet, engineered hardwood and laminate and luxury vinyl tile (LVT) flooring. It has some 2,500 employees in 12 locations, mostly in northwest Georgia, including corporate headquarters in Dalton and three plants and a distribution center in Whitfield County. As a privately owned company, it does not report revenues.
Beaulieu was once the third-largest carpet manufacturer in the United States but has been pushed to fourth place by Engineered Floors, which was founded by carpet industry veteran Robert E. “Bob” Shaw in 2009, according to analysts.
Jim Gould, president of the Floor Covering Institute, an industry consulting group, said the bankruptcy shows what can happen to manufacturers who are focused too much on one segment of the floorcovering industry. Beaulieu has made some moves into other products but is still primarily a carpet manufacturer, he said.
“No matter how good they are in their product category, (single-product manufacturers) are not able to compete as effectively as multi-product floorcovering suppliers,” he said. “Beaulieu purchases its LVT from US Floors, which was acquired by Shaw Industries recently.”
Greater Dalton Chamber of Commerce President Rob Bradham called Beaulieu “an important part of the community.”
“We hope that they can get themselves back to financial health quickly,” he said. “The floorcovering industry is very healthy now. They have been growing slowly but steadily over the last few years, so I am not concerned about the industry.”