100% Of Arbek Furniture Inventory, Machinery And Equipment Sold Yielded Return To Secured Lender Nearly 50% Above Projections

Furniture World Magazine

The recent going-out-of-business sale and auctions directed by Buxbaum/Century of Arbek Oak Furniture’s merchandise inventory, machinery and equipment resulted in the sale of all items on hand, yielding a return to the manufacturer’s secured lender that was nearly 50% above original projections. Buxbaum/Century of Calabasas, Calif., was retained by the bank to dispose of Arbek’s inventory, machinery and equipment following a foreclosure. Founded in 1982, Chino, Calif.-based Arbek had sold its oak furniture through more than 1,000 retailers nationally, ranging from the Haverty, Wickes and Levitz chains, to independent merchants. Arbek’s merchandise inventory consisted of 3,500 pieces of beds, mirrors and replacement parts valued at $2.5 million (at retail). All merchandise went on public sale at the Chino plant starting September 13, and all but 450 pieces were sold. This was followed by an on-site auction on October 18 of 1,500 lots of Arbek’s machinery and equipment, which ranged from woodworking machines to warehouse equipment and office furnishings. More than 500 bidders from as far away as Pennsylvania, Canada and Mexico snapped up everything in sight. Finally, the remaining 450 pieces of furniture were sold at auction on October 19. Buxbaum/Century is a joint venture between Buxbaum Group of Calabasas and Century Services, a leading specialist in industrial equipment appraisals and liquidations, headquartered in Calgary, Alberta. Buxbaum/Century Services was formed in 2000 to provide machinery and equipment appraisal and auction services for financial institutions and corporations throughout North America. “This project showcased the unique combination of strengths this joint venture brings together: The consumer goods expertise of Buxbaum Group and the machinery and equipment (M&E) expertise of Century Services,” explained Buxbaum/Century regional manager Joseph Seigo, who directed the Arbek sale and auctions. “As opposed to a scenario under which one company would handle the merchandise sale and another the M&E auction, the efficiencies inherent to this single-source approach allow for significantly higher return to the secured lender, both from an initial offer perspective as well as on a net recovery basis. “Among other things,” Seigo continued, “we were able to leverage the retail sale advertising to promote the M&E auction. When it came time to close the liquidation and go to auction with the M&E, we had a forum to market the remaining merchandise and generate a higher return than ‘bulking out’ the balance of the inventory. At the end of the day, we were able to increase the net returns to the lender by almost 50%.” Buxbaum Group provides inventory appraisals, auctions on both fixed and liquid assets, turnaround and crisis management, as well as other consulting services for banks and other financial institutions with retail, industrial, wholesale/distribution and consumer-product manufacturing clients. The firm also provides liquidation services on an equity or consultative basis for consumer-product inventories, machinery and equipment. Additionally, Buxbaum buys and sells consumer-product inventories on a closeout basis.