Amid falling sales and stiffening competition, Dalton, Ga.-based flooring manufacturer Beaulieu Group has sought Chapter 11 bankruptcy protection as the business seeks to restructure.
The carpet colossus, with more than 2,500 workers and a dozen plants and distribution sites, on Monday didn't announce any layoffs or closings. Operations are ongoing while it reorganizes, but the company is expected to eye efficiencies and cost savings.
"This is a necessary process as we continue to execute our long-term strategic plans for the business," said Michael Pollard, Beaulieu Group's president, about the filing. "Our business model has changed with the industry and our client base since our current capital structure was put into place."
The privately held company that has been trying to shift more into hard flooring sales said existing lenders have agreed to continue to support Beaulieu by providing debtor-in-possession financing. That, combined with cash from operations, would support the 40-year-old venture, the business said. Beaulieu said it owes between $50 million and $100 million.
Kemp Harr, publisher of industry magazine Floor Focus, said he's not surprised by the filing in U.S. Bankruptcy Court in Rome, Ga.
Beaulieu sales have toppled from more than $1 billion in 2005 to a rate so far this year that would generate about $385 million on an annual basis, he said.
Harr said that Beaulieu, which once had 6,500 employees, has seen revenues fall while competitor Engineered Floors has taken market share.
"What's happened is Engineered Floors came out in 2009 out of nowhere," he said about the company started by longtime flooring magnate Bob Shaw. "The majority of the share Bob Shaw captured came from Beaulieu."
Dalton-based Engineered Floors' annual U.S. sales in 2016 were put at $659 million by Floor Focus.
Ken Ryan, senior editor for Floor Covering News, said there has been an industry shift from carpet to hard flooring surfaces by consumers and Beaulieu was late to respond.
"They have a very limited hard surface presence right now," he said. "The sense is that Beaulieu has been rather late to the game."
Harr estimated Beaulieu sales are about 80 percent carpet and the remainder hard flooring.
"They've been slowly repositioning themselves," he said.
Beaulieu is primarily owned by the family of company co-founder and Olympic equestrian competitor Carl M. Bouckaert.