McCONNELLSVILLE — Harden Furniture CEO Gregory Harden remains hopeful that the company’s operation will continue long into the future despite a lender seeking bids on the company’s assets.
On Monday, Harden, who is the fifth generation of Hardens who have been at the head of the company, spoke to the company’s approximate 175 employees about the situation. The company has been around since its start on the banks of Fish Creek in 1844 by Charles S. Harden Sr.
Gemcap Lending is in the midst of selling the company’s assets through what’s known as an Article 9 auction. In 2016, Gemcap financed Miramar Capital Partners’ taking a controlling interest in the furniture maker. Harden, who has been the chief executive officer since 1992, retained a small ownership stake. The Gemcap loan was secured by assets like the machinery and accounts receivable.
The Miramar transaction was intended to give Harden the opportunity to stabilize the operation and allow for plant modernization. The complex totals about 450,000 square feet.
However, the company has had a hard time paying back the Gemcap loan.
“We’ve been struggling to service the debt,” Harden told the Sentinel Tuesday. Under the financing terms, Gemcap had the option to sell the secured assets in the event the furniture company defaulted on the loan, a situation that has occurred. With the company falling behind, the lender pulled the trigger on the auction option, according to Harden.
He said biggest obstacle facing the company was the capital structure — too much money going to pay down debt and not enough going back into the company’s operations — and not a lack of business.
“Our problem has not been a lack of orders,” he said. “Our problem has been our onerous capital structure.”
In fact, he said there was a 30 percent gain in commercial orders last year and “...we’re off to great start in 2018.”
He noted that the company has received a million-dollar order for a bank project.
Although the employees were cautioned that the winning bidder could liquidate the local operation, Harden believes his company’s valued brand name and the skilled workforce turning out high-end solid wood and upholstery furniture justify keeping the business a going concern in Oneida County.
“Our feeling is that this is going to allow us to reset our capital structure,” said Harden.
It is by no means certain that Harden would be part of a winning bid although he said he’ll be part of a group making an offer. Furniture Today, which reports on the furniture industry, said Tuesday that Harden could lose his stake in the business unless he is among the successful bidders. Harden is currently the sole family member with an ownership stake in the company.
The CEO told the furniture industry trade site, “My hope is that we wind up with a new ownership group that is willing to make the investment that needs to be made in the company so we can enjoy additional growth and another 174 years. It is a tough business these days, but the commercial business has been especially good in the last 12 months.”
He did not predict how the auction would turn out when he addressed employees two days ago or when he spoke with a Sentinel reporter for this story.
Bids are being accepted through Jan. 31. One offer has already been submitted, according to Harden.
“There is a bid on the table now that would satisfy the Gemcap loan,” he said.
In 2015, the company announced it had terminated discussions with a Taiwanese furniture maker about a possible sale of the company. At the same time, the company said it planned to move forward with a factory modernization — upwards of $4 million — with the help of government grants.
In support of the factory update, the company received 1.38 megawatts of power through ReCharge New York, a state program that provides lower-cost hydropower to eligible companies.
in Washington, D.C.
Harden said the U.S. State Department is the company’s largest customer. The White House is third.
A few years ago the McConnellsville furniture maker beat out other bidders to create a 16-foot-long black cherry conference table for the White House’s Roosevelt Room. It was specially designed to meet the narrowness of the room and built in pieces that can be easily moved out of the room when it’s needed for reception space,
Harden also made 1,000 chairs for the Capitol Visitor Center, which opened in 2008, and the chairs in the caucus rooms in the House and Senate.
Closer to home, Harden products can be seen in several Oneida County government buildings, including the desks used by 23 county legislators at the County Office Building and some of the furnishings in the adjacent County Courthouse.
Harden Furniture also had a hand in furnishing the renovated Marriott Syracuse Downtown, formerly known as the Hotel Syracuse, several years ago. It restored about 200 antique chairs.