Sauder Woodworking To Acquire Studio RTA

Furniture World Magazine

In a move to broaden its contemporary offering and further strengthen its global strategy of supplying dealers with world-class products made in the most cost-efficient way, Sauder Woodworking Co., North America’s largest manufacturer of ready-to-assemble (RTA) furniture, announced plans to purchase Studio RTA. The company is a rapidly growing importer and distributor of innovative, patented designs in home office, entertainment, art and hobby RTA furniture. The transaction is expected to be finalized by early June. Sauder said that it intends to keep the Studio RTA brand and operations intact, with all employees remaining in their current jobs. Owners Paul Reitzin, president and CEO, and Bob Hughes, executive vice president, will continue in their leadership roles. Financial terms were not disclosed. Started in 1985 as a manufacturer of drafting and art tables, the company is headquartered in Los Angeles, California, where it employs 110 people. Studio RTA specializes in product design and development, and works through partner organizations in Taiwan and Southern China for sourcing. In addition to its design group, the Los Angeles-based operations center includes accounting, sales and marketing, and a customer support department along with a 200,000-square-foot state-of-the-art warehouse. Major customers include Office Depot, Office Max and Best Buy. Sales of the Studio RTA brand grew from $40 million in 2001 to a projected range of $65 to $70 million in 2003. When the negotiation is complete, combined sales for the Sauder family of companies, which also includes Progressive Furniture Inc., are projected to total nearly $750 million. “This strategic acquisition provides an excellent opportunity for sales growth in complementary product lines and gives us a significant jump start on our global strategy,” said Kevin Sauder, president and CEO of Sauder. “Studio RTA is a well-respected and fast growing brand with established sources in Asia for mixed media parts for Sauder furniture, which will make us more competitive with contemporary and non-traditional furniture. Acquiring Studio RTA is one more step in our aggressive search to supplement our domestically produced RTA furnishings with imported materials that will give Sauder a world-class product offering, while leveraging our brand and distribution strength.” The Studio RTA acquisition also will expand Sauder’s opportunities to sell its products into new customers and new distribution channels, such as art and hobby retailers. Additionally, it will improve the company’s capability to serve large customers who are buying products from around the world and putting new stores in foreign countries every day. Studio RTA’s success has been built on innovative, fashion-forward and affordable designs that anticipate changing marketplace trends in style, color and finishes. Its wide range of patented product offering using metal, glass, solid wood, laminates and rattan retail from $49.99 to $499.99. Studio RTA collections will continue to be sold under the company’s brand name, and sales efforts will be coordinated between the Sauder and Studio RTA sales staffs. “We welcome this opportunity to align with a broad-line vendor capable of serving the world’s largest retailers and providing the financial strength to support our rapid growth strategy,” said Reitzin. “We also will gain access to more and broader customer channels and expect to achieve substantial synergies in logistics, information systems, distribution, marketing and finance.” “Our goal throughout the years has been to provide high quality, value-based furniture solutions to the world,” Sauder said. “Studio RTA has excelled in finding ways to source the best materials from around the globe. The combination of our strengths will help us succeed as a highly efficient world-class company in an increasingly competitive global marketplace.” Based in Archbold, Ohio, Sauder Woodworking currently employs 4,200 people company-wide and is the sixth largest manufacturer of residential furniture in North America. The company operates a distribution facility in Salt Lake City, Utah, but all RTA manufacturing is located in Archbold. Company subsidiaries include Progressive Furniture, Inc., Archbold Container, and Sauder Manufacturing, the nation’s largest manufacturer of church seating. Total company revenues for 2002 were nearly $700 million.