Kohler Co. has agreed to sell its luxury furniture lines – Baker, McGuire and Milling Road – to a Chinese firm.

The sale to a U.S.-based subsidiary of Samson Holding Ltd. for as much as $35 million will take Kohler out of furniture manufacturing, an industry that has been wracked by overseas competition.

Kohler has owned Baker, which includes the Milling Road brand, since 1986. Kohler acquired McGuire, which offers “casual luxury” furniture with a California sensibility, in 1990.

Spokesman Todd Weber said by email that Kohler had evaluated its furniture business “and determined that it no longer aligned with the company’s strategy and core focus moving forward.”

Best known for its bathroom fixtures and its golf courses, privately held Kohler’s businesses also include its interiors group. While it is shedding the group’s furniture operations, Kohler continues to hold decorative product brands selling tile and stone; luxury plumbing; and cabinets, lighting and vanities.

With the furniture brands, Kohler is selling Baker’s 750,000-square-foot factory in Hildebran, N.C., which employs more than 200 people; a smaller plant in High Point, N.C.; two factories in Indonesia; and potentially a distribution center and 36 acres of land in Hickory, N.C.

Under the sale agreement, Samson will pay $29.5 million, plus another $5.5 million if it exercises its option to buy the distribution center and surrounding property.

Baker is a high-end brand that dates to the 1890s. A couple of years ago, the firm custom made chairs for the State Dining Room in the White House, the Washington Post reported.

“It’s what I hope to have when I grow up, and I’m 69,” joked veteran furniture-industry analyst Jerry Epperson, a managing director with Richmond, Va.-based investment banker Mann, Armistead & Epperson.

But domestic production of luxury furniture has suffered as Asian manufacturers have been able to make pieces that look the same but cost far less. While the imports may be inferior structurally, the manufacturers “put so much look and what the trade calls ‘face’ on the product, so it looks like the good stuff,” Epperson said.

The businesses Samson is buying from Kohler recorded losses in each of the last two years, Samson said in a disclosure statement posted on the web site of the Hong Kong, China stock exchange.

Within the past 10 years, Baker has closed two other factories in North Carolina – a 175,000-square-foot upholstery plant and a 188,000-square-foot case-goods facility, said Terry Bralley, president of the Davie County Economic Development Commission.

That sort of thing isn’t unusual in the industry. From 2001 through 2015, more than half of the household-furniture manufacturing jobs in the U.S. disappeared. The number of factories shrunk by 43%.

But Samson, based in Dongguan, a major industrial city of 7 million in south China, said in its most recent annual report that it wants to expand its U.S. furniture-making.

The company already operates an upholstered-furniture plant, also in North Carolina, and employs more than 800 people in the U.S.

Wisconsin-based Kohler employs 32,000 people worldwide and has annual revenue of nearly $6 billion.

(Source:jsonline.com)