RIVER OAKS BOARD MAJORITY PURCHASES NEW STOCK
By Stephen Singer
A majority on the board of directors of River Oaks Furniture Inc., demonstrating their belief in the company's future, have purchased 300,000 newly issued shares of stock.
"The real reason for the stock purchase is to show confidence to shareholders and the investors community about River Oaks and the industry," said Stephen L. Simons, chairman and chief executive officer.
"Most public furniture companies have been beaten up" in stock prices, he said.
River Oaks is no exception to the assault on stock prices. Seven of the board's nine directors purchased River Oaks stock Feb. 22 at $3.75 a share. Although River Oaks stock has risen since, closing at $4.75 on Monday, its price in the past year was as high as $14.25 a share.
The stock sale brings to 5.6 million the number of River Oaks shares, Simons said.
Fulton plant temporarily shut
River Oaks announced two weeks ago it was temporarily shutting its Fulton plant. Although company president John Nail at the time blamed a "downturn in business nationally," Simons said that that "was not totally the case."
River Oaks opened a 325,000-square-foot manufacturing plant in New Albany in September. River Oaks "could be more efficient and cost-effective" using two plants rather than three, Simons said.
River Oaks also operates a manufacturing plant in Baldwyn.
In addition, the company uses a Belden site for fabric cutting and storage and delivery operations. Company officials on Wednesday will celebrate the completion of their corporate office relocation from Fulton to Belden.
River Oaks will reopen the Fulton plant when company officials "see a significant increase" in business, Simons said.
Nail had said that the company would try to relocate about 70 of the 170 employees at the Fulton plant. Company officials will try to relocate "as many workers as we can," Simons said. "Certainly not all of them."
"We foresee this as temporary," he said.
In a prepared statement, Simons said 1995 was a "difficult year" for River Oaks. Although profits were down, he said sales increased in 1995 to more than $140 million from $107 million in 1994.
The CEO said there is "some weakness in the furniture industry and in retail as a whole." But, he added, "we're looking for a mild pick-up."
He said he sees no evidence that economy overall is slipping into a recession.