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HOM Furniture to Acquire Gabberts Design Studio & Fine Furnishings

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HOM Furniture announced that it has signed a definitive purchase agreement to acquire Gabberts Design Studio & Fine Furnishings, the region’s premier, high-end furniture retailer and one of the strongest, independent furniture brand names in thecountry. HOM President and CEO Rod Johansen confirmed the company will continue operating Gabberts in Edina’s Galleria and has plans to grow the Gabberts brand across the upper Midwest.Both companies are based in the Twin Cities and are privately held. Purchase terms will not be disclosed in the asset-based sale, which is expected to close Aug. 29. The combined organization is projecting retail sales of more than $200 million in 2008 and more than 1,000 employees. Gabberts currently has about 110 employees in its retail, distribution and corporate operations. As a result of the acquisition, duplicate positions incorporate operations will result in employee reductions in these areas. Jim Gabbert, chairman of the board and son of company founder Don Gabbert, will leave the company. “It’s our intention to retain as many current Gabberts employees as possible,” said Johansen, who projected a reduction of approximately 10 percent. Minimal changes among the interior designers and customer service associates are expected. Johansen said Gabberts employees not retained will receive first consideration for open positions at HOM locations. HOM approached Gabberts several times over the last five years about a possible acquisition, and the Gabberts board agreed that now was the right time to sell, according to Jim Gabbert. “The home furnishings industry has gone through dramatic changes over the last decade, making it very difficult to sustain a single-store, independent retail operation even in a great economy with great people doing great work,” Gabbert said. “It’s become impossible for us to do it in today’s economy.” “Our family has been in the furniture business for more than six decades,” said Gabbert.“While it’s been a difficult decision, we’re pleased Gabberts will continue to be independently owned and operated by a Minnesota-based, family-built brand. We can’t think of a betterorganization to carry on the Gabberts legacy.” HOM is the regional home furnishings leader at the “good” and “better” merchandise levels. The Gabberts brand adds the “best” merchandise tier to HOM’s portfolio and delivers awhole new audience to the company. “HOM was ready to expand our business portfolio with a retail brand in the high-endhome furnishings segment,” said Johansen. “Rather than build a brand, we acquired the best high-end retail brand in the upper Midwest. We plan to honor and leverage 62 years of Gabberts brand heritage and an award-winning interior design team to markets currently underserved at the premium level.” Growing Gabberts HOM’s strong infrastructure, buying power, distribution network, extensive service footprint and marketing strength will help Gabberts better service current customers, reach new customers and grow the brand regionally in outstate HOM operating markets. “We’re excited to grow the Gabberts brand. We see many opportunities to deliver Gabberts’ design expertise and product selection to more customers in the Twin Cities — and across HOM’s five-state service area,” said Johansen. Under HOM’s direction, Gabberts will continue to focus on upscale home furnishings brands, and customers can expect the same high level of customer service and in-store experience. Customers with pending orders and related service commitments can expect aseamless transition in ownership and experience no disruption, according Johansen. HOM will leverage its 500,000 square feet of warehouse space to make more in-stock merchandise available, meaning faster delivery times for customers. The Gabberts Odds & Ends store in the Galleria will continue operations and HOM will assume Gabberts’ lease on its Bloomington warehouse. Initial changes will include the return of a full-service sleep center at the Galleria store.-more- About HOM Furniture: HOM ranks as one of the nation’s largest furniture retailers, serving customers in 13 showrooms throughout Minnesota, South Dakota, North Dakota, Iowa, and Wisconsin. HOM Furniture hasfurniture stores in the Minneapolis and St. Paul, Minn., area, including Plymouth, Lakeville,Roseville, Woodbury, Bloomington, and Coon Rapids with additional showrooms in Hermantown/ Duluth Minn., as well as Eau Claire, Wis., Sioux City, Iowa, Fargo, N.D., and Sioux Falls, S.D.With its 110 percent low price guarantee and rapid delivery promise, HOM Furniture offers the finest selection and value with the largest in-stock inventory on sofas, accents, accessories, mattresses, game room, bar furniture and stools, passages fine furniture, uptown urban furnishings, adult and kids bedroom, dining, area rugs, patio and outdoor, home theater, entertainment and home office furniture in the upper Midwest. HOM Furniture has developed product brands for “Uptown” urban furniture, “Passages” finefurniture, “Theater Rooms” entertainment and cinema seating, “Sleep Express” mattress department, “The MARKET” decorative accessories, “Kids LIFE” youth bedroom and mattresses,and the 2008 National Rug Retailer of the Year “World Rugs” area rug department. About Gabberts Design Studio & Fine Furnishings Gabberts Design Studio & Fine Furnishings is the region’s premier, high-end furniture retailer and one of the most successful, independently owned and operated home furnishings retailers in the country. Founded in 1946 in Minneapolis, Gabberts is recognized throughout the industry as an innovative and visionary leader in retail, education, merchandising, marketing, service and design. The flagship store is a 63,000 square foot retail showroom located in the Galleria in the Twin Cities suburb of Edina. www.gabberts.com

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