October 11, 2007-- Casual Living,
Homecrest closed its operations the first week in October after its efforts to refinance or find a buyer failed.
President and CEO John Sundet said the Wadena, Minn.-based outdoor furniture manufacturer did not intend to file for bankruptcy protection. “We’ll just go through a liquidation process,” he said. “We will be selling our machinery, equipment and inventory over the next several months.”
When asked what factors played into the company’s decline, Sundet noted challenges within the outdoor furniture channel. “But the cataclysmic event for Homecrest was the experience we had with slate and marble tabletops,” he said. “The cost to replace those tabletops that we purchased was several million dollars and we weren’t capitalized to withstand that kind of extraordinary expense we didn’t anticipate. We had significant warranty fulfillment we went through with those tabletops that was really devastating.”
Homecrest had been actively pursuing multiple options to refinance HC Holdings LLC. “We had received three bank financing proposals and had been moving forward with several potential equity investors, as well,” Sundet said. “All of the financing proposals were contingent upon securing an equity investor at a sufficiently high level, and despite the fact that we were optimistic and felt we were making real progress toward that end, those efforts proved to be unsuccessful.”
The company retained Alliance Management, Inc., to assist in the sale of its assets and to wind down business operations. An online auction of machinery and equipment, inventory and intellectual property is expected to be completed by the end of the year.