BusinessTN

Upholstered furniture maker Berkline/ Benchcraft geared up to announce its IPO, but ten months after its registration filing, there’s still no sign of BLBC listed on Nasdaq.

Now well beyond a standard 90-day quiet period, president and CEO C. William Wittenburg Jr. chose not to comment, yet a company insider did confirm that the initial public offering has been postponed, leaving those in its Hamblen County home only to speculate on why one of Tennessee’s rising stars would suddenly hit the snooze bar.

Business Tennessee first reported in June the company’s intentions to raise as much as $138 million with proceeds to be used to repay debt, redeem securities and to pay cash to former owners who have certain tax liabilities stemming from their earlier stakes. Any number of reasons would lead Morristown born-and-bred Berkline and Mississippi-based BenchCraft, best known for recliners and motion furniture, to put on the brakes. (The two merged to form Berkline/BenchCraft Holdings about four years ago, headquartered in Morristown.)

University of Tennessee’s head of finance James Wansley speculates one possible indirect cause for an IPO delay was Berkline’s need to absorb the cost after a major customer, New York-based specialty retailer Levitz Home Furnishings, filed for Chapter 11 last year. “This could be a one-time event that Berkline is wanting to get behind them and wait two or three quarters for things to improve,” he says. This might also be tied to Berkline’s credit rating slip to “negative” on Standard and Poor’s, which had ranked Berkline a “B+” for most of 2005.

With few furniture companies publicly traded, it may be difficult to set a favorable stock price at the most advantageous time, he adds. Furniture market conditions in general have been lackluster and plagued with bankruptcies, according to Larry Thomas, business editor of the industry trade weekly, Furniture Today. Recliners are the exception, he says, adding that Berkline flourished in that $3.5 billion niche in the number three slot behind La-Z-Boy and Lane. Berkline/BenchCraft reported total revenues of nearly $500 million in 2004 and is Hamblen County’s largest employer with 1,625 workers.

The mere rumblings of an IPO bodes well for Greater Morristown, which had been well-known as a hub for hard goods furniture manufacturers before overseas competition forced them out. A decision by Berkline to go public may spark new interest in a region often overlooked by new development.

Couple that with Morristown’s recent metropolitan statistical area designation, and this could be the beginning of Tennessee’s furniture renaissance.