New owners reveal details of High Point, Las Vegas venture
Jay McIntosh -- Casual Living, May 3, 2011
Officials unveiled the long-awaited $1 billion deal uniting the Las Vegas and much of the High Point home furnishings showroom real estate under a single ownership and management.
The new owners said that in a series of transactions, "all assets in the portfolio have been recapitalized with significant equity investments, providing for long-term stability and creating a growth platform for the industry."
The sale of Buildings A,B and C in Las Vegas, as well as the Pavilions and the Las Vegas Design Center and the 59-acre WMC compex closed on Monday, officials said. The IHFC deal, worth $275 million, also closed on Monday. The deal also includes the sale of Merchandise Mart Properties buildings, which closed in early April, and will eventually include Showplace, Showplace West and three Hamilton Street buildings, when that deal closes in the next 30-60 days.
The new owner, International Market Centers L.P., is majority owned by funds managed by Bain Capital Partners and a subsidiary of funds managed by Oaktree Capital Management. Related Cos. -- an investor in the World Market Center -- is a minority owner, along with Bassett Furniture and Network World Market Center and affiliates, the original WMC founders led by Jack Kashani and Shawn Samson.
The venture initially includes 13 buildings and 10.6 million square feet. When the acquisitions are completed, it encompass 11.5 million square feet in 18 buildings.
Bob Maricich, who has led the WMC, will be CEO of International Market Centers with joint headquarters in High Point and Las Vegas. Before becoming president and CEO of the WMC in 2008, he was president and CEO of manufacturer Century Furniture, where he spent 11 years.
Other executives of International Market Centers are:
+ Tom Mitchell, president of home furnishings. He has been president and CEO of the IHFC since 2008 and has worked in the home furnishings and trade mart business for 32 years.
+ Georgia Davis, who will lead the new venture's "strategically critical" gift industry initiative on an interim basis while a president of gift and home décor is identified. She has been a consultant to the WMC since 2007 and previously was executive vice president of the Dallas Market Center for 20 years.
+ Katherine Venezia, chief financial officer. She has overseen financial matters at the WMC since 2004 and previously was in corporate accounting with Related Cos.
+ Randy Eller, chief integration officer. He will be responsible for the transition and integration of the acquired companies into an "effective, integrated, world-class operation." He is president of Eller Enterprises and has worked more than 30 years in the gift and home sector.
"We are confident in the future of this industry and the unprecedented platform that the combination of High Point and Las Vegas markets presents," Maricich said in a statement.
"The International Market Centers (deal) is an unprecendented event not only for the furniture industry but for the state of North Carolina and for High Point," Maricich said at a press conference Tuesday.
Scott Graves, managing director at Oaktree, added, "International Market Centers will create a seamless market experience on both coasts and offer significant cross-category business opportunities. The company's plans include attracting additional traffic from international buyers, enhancing marketing efforts and creating new distribution and sales channels for exhibitors."
"International Market Center's strong capital position enables it to invest in - and vastly expand - the strategically significant gift and home décor category," said Eller in a statement. During the press conference, Eller said he would draw on his extensive industry experience in this transitional role, saying he would "relentlessly focus on the customer."
Mitchell said today's news represents "an exciting new day" for High Point.
"The resources that IMC brings to bear will clearly invigorate our market," Mitchell said. "The city of High Point is synonymous with the furniture industry. ... This significant investment represents a very firm and clear commitment to our buyers, to our sellers, to our industry, and especially to our community."
Upon closing of the various transactions, IMC will own World Market Center buildings A, B and C and the World Pavilions tents, and High Point holdings including the IHFC and:
+ Historic Market Square
+ Market Square Tower
+ Suites at Market Square
+ Plaza Suites
+ Furniture Plaza
+ National Furniture Mart
+ Hamilton Market
+ 300 South Main
+ Showplace West
+ 200 N. Hamilton
+ 320 N. Hamilton
+ 330 N. Hamilton
Maricich called the deal an "incredibly complex transaction" with four sets of owners and some of the properties in foreclosure.
"This is the dawn of a new age of collaboration that will make the industry stronger," he said.
Maricich said the management team has more than 90 years of industry experience and with the investment of more than $1 billion from the new owners, the deal represents "the most compelling B2B platform that the industry has ever known."
Maricich said the IMC is committed to "putting buyers and sellers together in an effective and compelling way."
The deal not only encompasses the furniture part of the business, but the gift and home décor aspects of the industry, he said. "These are different buyers with different value propositions." He cited an opportunity to build a powerhouse West Coast gift market, addressing a void in the current trade-show structure.
Overall, the deal represents an overwhelming confidence in the furnishings industry, he said.
"The thesis behind this really is confidence in the furniture industry," he said. "There are those who will say that we'll never be the same, but I don't believe that for one second." He said that the size of the industry has doubled each every 10 years for decades, and that's a trend that will continue.
"Our business was interrupted by the Great Recession, which for the furniture industry was a depression," he said. "But people's love for their homes endures."
And High Point as a market remains safe, he said.
"High Point is a treasure and an asset and it's in good hands with the people who will feed it, grow it and make it better," he said.
Specific financial details of the transaction were not disclosed. The IMC website is imcenters.com.