Samelson Buys Coral, Adds Corporate Sales
April 17, 2000
Chicago, Ill. – Coral Fabrics Inc., a contract distributor/jobber, was sold during the first week of April to Charles Samelson Inc., the owner of Samelson/Chatelane Inc., an estimated $25 million converter and wholesaler of contract fabrics based in New York.
Bernard Lieberman, who confirmed the sale and Mary Albarado were the principals of Coral Fabrics and are expected to remain with the combined firm in the immediate future.
Principals of Samelson Chatelane are Gerry Kane, Harry Samelson and Mark Teppel.
The purchase price was not disclosed but there was speculation that the price was in the "couple of million dollar range." Samelson/Chatelane specializes in novelty fabrics for bed, window and furniture. The company also transfer prints on 20 different basecloths and offers a line of both printed and woven Crypton® fabrics for the contract market.
"At the end of the day, this puts Samelson on a direct basis they didn't have before," an industry source said. "Samelson has not been selling directly to the A&D market or to the cut-order contract customer. With this acquisition, Samelson will be able to go after this business. All of the Samelson product can also be priced to reflect the same profit margin that Coral enjoys. Mark my words, this is only a beginning of the consolidation in the U.S. contract market.
Converters will buy jobbers and jobbers may buy converters. The mills – like Burlington and Milliken are already going direct in the hospitality and contract seating industry. Only the biggest will survive in the contract business unless you have a niche with a high profit margin," the source pointed out.
Coral Fabrics was founded in 1968 by Bernard Lieberman as a specialist in drapery and cubicle curtains for the contract industry. Coral was a leading player in the contract fabric marketplace in the '70s with sales in the $20 million range but with the influx of hard window treatments, Coral had to find new ways of marketing itself. Its business prior to the sale to Samelson was reportedly in the $10 million range.
In the '80s Coral found itself in a mature business with little growth. Eventually, Lieberman took the reins of the company over from his then partner Barry Rice who left. Lieberman then redirected Coral into new markets such as contract upholstery and wall covering in order to compete with full-line contract jobber specialist/giants like Maharam and Designtex.
In the past decade, Lieberman has been credited with rebuilding Coral at the same time Charles Samelson was growing its business. Samelson made a decision to change its marketing plan and switch from selling jobbers directly in the hospitality market and instead selling directly to the end user. Coral was a key hospitality jobber/customer for Samelson. Coral continued to do business with Samelson in spite of the change in Samelson's marketing efforts.
Samelson moved further into direct sales in the hospitality market and in the late '90s added the healthcare market. With the acquisition of Coral, Samelson was able to add the corporate contract market to its growing business. It also was able to add Coral's direct national sales force under Steve Cooper calling directly on the A&D community in all three areas.
"On the surface, the match makes sense," a supplier to Coral said. "The real key is whether or not the parent company can generate the enormous dollars needed to add continuous product and sampling to a never-ending need by designers and architects to see new and more product. It boils down to dollars. Every time you put an exclusive book out for contract, you spend $150,000-plus between sampling, fabric and labor for sampling. These are non-inventory expenses just to get started. The industry will have to continue its current big growth to make the acquisition pay off," the source said.
In addition, Coral purchases from converters who compete directly with Samelson may decline. One converter commented on hearing about the sale: "Jobbers are a dying business for the converter in the contract business. Everyone is going direct – both converter and the jobber.
"Can all of these jobber/distributors continue to fund the increasing appetite of the design community? Will the product development money run out before there's a slowdown in projects?
"It wouldn't be outrageous in years to come to see that jobbers in the contract industry will be absorbed by one another. It's not necessarily the whale eating the minnow. A small jobber can also find a way to buy a big converter.
"Can the industry continue with all of the converters serving the design community or perhaps will you see consolidation? A hot designer with venture capital can easily enter this business. Put all of the small boutiques together – about 25 in this business today – these are becoming a significant part of the business and eating into the business of the major players."
Said another Coral supplier: "It's a smart move on Samelson's part. They are in the hospitality and healthcare markets but not in the corporate contract business. Coral puts them closer to the customers – architects, designers and contract seating buyers. For example, Coral won out over bigger competitors in securing the contract seating business at La-Z-Boy with Crypton wovens. Also with Coral, Samelson gains a sales group of around ten people calling on the A&D market."
The source also pointed out that Coral could benefit from the guidance of Samelson's Tony Tedesco who used to run Fantagraph, the contract division of Standard Textiles in Cincinnati. "Tony has an incredible knowledge of the healthcare market. He can definitely enhance Coral's business."
Bernard Lieberman, who confirmed the sale and Mary Albarado were the principals of Coral Fabrics and are expected to remain with the combined firm in the immediate future.
Principals of Samelson Chatelane are Gerry Kane, Harry Samelson and Mark Teppel.
Mark my words, this is only a beginning
of the consolidation in the U.S. contract market.
of the consolidation in the U.S. contract market.
The purchase price was not disclosed but there was speculation that the price was in the "couple of million dollar range." Samelson/Chatelane specializes in novelty fabrics for bed, window and furniture. The company also transfer prints on 20 different basecloths and offers a line of both printed and woven Crypton® fabrics for the contract market.
"At the end of the day, this puts Samelson on a direct basis they didn't have before," an industry source said. "Samelson has not been selling directly to the A&D market or to the cut-order contract customer. With this acquisition, Samelson will be able to go after this business. All of the Samelson product can also be priced to reflect the same profit margin that Coral enjoys. Mark my words, this is only a beginning of the consolidation in the U.S. contract market.
Converters will buy jobbers and jobbers may buy converters. The mills – like Burlington and Milliken are already going direct in the hospitality and contract seating industry. Only the biggest will survive in the contract business unless you have a niche with a high profit margin," the source pointed out.
Coral Fabrics was founded in 1968 by Bernard Lieberman as a specialist in drapery and cubicle curtains for the contract industry. Coral was a leading player in the contract fabric marketplace in the '70s with sales in the $20 million range but with the influx of hard window treatments, Coral had to find new ways of marketing itself. Its business prior to the sale to Samelson was reportedly in the $10 million range.
In the '80s Coral found itself in a mature business with little growth. Eventually, Lieberman took the reins of the company over from his then partner Barry Rice who left. Lieberman then redirected Coral into new markets such as contract upholstery and wall covering in order to compete with full-line contract jobber specialist/giants like Maharam and Designtex.
In the past decade, Lieberman has been credited with rebuilding Coral at the same time Charles Samelson was growing its business. Samelson made a decision to change its marketing plan and switch from selling jobbers directly in the hospitality market and instead selling directly to the end user. Coral was a key hospitality jobber/customer for Samelson. Coral continued to do business with Samelson in spite of the change in Samelson's marketing efforts.
Samelson moved further into direct sales in the hospitality market and in the late '90s added the healthcare market. With the acquisition of Coral, Samelson was able to add the corporate contract market to its growing business. It also was able to add Coral's direct national sales force under Steve Cooper calling directly on the A&D community in all three areas.
"On the surface, the match makes sense," a supplier to Coral said. "The real key is whether or not the parent company can generate the enormous dollars needed to add continuous product and sampling to a never-ending need by designers and architects to see new and more product. It boils down to dollars. Every time you put an exclusive book out for contract, you spend $150,000-plus between sampling, fabric and labor for sampling. These are non-inventory expenses just to get started. The industry will have to continue its current big growth to make the acquisition pay off," the source said.
In addition, Coral purchases from converters who compete directly with Samelson may decline. One converter commented on hearing about the sale: "Jobbers are a dying business for the converter in the contract business. Everyone is going direct – both converter and the jobber.
"Can all of these jobber/distributors continue to fund the increasing appetite of the design community? Will the product development money run out before there's a slowdown in projects?
"It wouldn't be outrageous in years to come to see that jobbers in the contract industry will be absorbed by one another. It's not necessarily the whale eating the minnow. A small jobber can also find a way to buy a big converter.
"Can the industry continue with all of the converters serving the design community or perhaps will you see consolidation? A hot designer with venture capital can easily enter this business. Put all of the small boutiques together – about 25 in this business today – these are becoming a significant part of the business and eating into the business of the major players."
Said another Coral supplier: "It's a smart move on Samelson's part. They are in the hospitality and healthcare markets but not in the corporate contract business. Coral puts them closer to the customers – architects, designers and contract seating buyers. For example, Coral won out over bigger competitors in securing the contract seating business at La-Z-Boy with Crypton wovens. Also with Coral, Samelson gains a sales group of around ten people calling on the A&D market."
The source also pointed out that Coral could benefit from the guidance of Samelson's Tony Tedesco who used to run Fantagraph, the contract division of Standard Textiles in Cincinnati. "Tony has an incredible knowledge of the healthcare market. He can definitely enhance Coral's business."