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Collezione Europa Filed for Chapter 11 Bankruptcy
March 3, 2008
Are you as shocked as I am?
Collezione Europa filed for Chapter 11 bankruptcy today, listing more than $5.2 million in unsecured debt to its largest creditors. Back in 2000, the company had $60 Million in revenues. In 2005,
FURNITURE Today wrote:
Case goods and upholstery importer Collezione Europa said its U.S. sales jumped 25.5% last year to $119.3 million. The company is planning for continued growth, and said last month that it intends to open a West Coast distribution center within two years to supplement its North Carolina facility, and also is shopping for a domestic upholstery plant.
Using my “Rule of 72”, if sales double in five years, that's a growth rate of approximately 14% compounded. An enviable growth rate for any company!
What put the fast growing company into hot water?
- The weak dollar that favors companies that export rather than import as did Collezione Europa
On Nov. 30, U.S. District Court for the Middle District of North Carolina issued a permanent injunction in a three-year-old case restricting Collezione Europa from imitating or copying designs from Universal's Grand Inheritance and English Manor collections, introduced in 2001 and 2002.
- Did the company expand too rapidly?
UPDATE: FURNITURE Today is reporting that
"Collezione Europa said in documents filed in U.S. Bankruptcy Court here that its sales fell sharply in the past three years, partly because of the failures of two of its biggest retail customers, Rhodes and Levitz."
[...]
"In court documents, the company said its sales declined from about $120 million in 2004 to $74 million in 2007. It blamed the rapid drop partly on the bankruptcies of two key customers..." Thoughts??? Email me at landfair3554@comcast.net.
Posted by Mike Landfair on March 3, 2008 | Comments (0)
