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Retailer still plans to sponsor Detroit’s Thanksgiving Day parade
Art Van Furniture will sell itself to a private equity firm after 58 years of ownership by its founder.
The Warren-based retailer on Wednesday announced a tentative deal to sell to Thomas H. Lee Partners, a private equity firm in Boston. The deal is slated to close in February; the sale price was not disclosed.
Art Van Furniture was started in 1959 with a single store on Gratiot Avenue in what is now Eastpointe. Founder Art Van Elslander, 86, has remained the chairman and sole shareholder of the furniture and bedding company.
Today Art Van is one of the largest independent furniture retailers in the country with more than 100 stores in five states, a franchising program and about 3,700 employees. The company’s current executive team will stay on after the sale, including Art Van CEO Kim Yost, president Gary Van Elslander and David Van Elslander, the president of Art Van PureSleep.
“I am proud of Art Van Furniture’s history and what we have accomplished,” Art Van Elslander said in a statement. “The time for an ownership transition is right and the opportunity presented itself. There is still much I want to do, and I feel confident knowing the company and its people will be in the very best of hands for continued growth and success.”
Although private equity deals can often entail aggressive cost-cutting and store closures, Art Van’s future owner is planning to keep expanding the store and employees counts, said Gary Van Elslander, the eldest of Art Van Elslander’s 10 children. New stores are already planned for several Midwest markets including Chicago, Indianapolis, Columbus, Cincinnati, Cleveland and Pittsburgh.
“The trajectory is going to continue to be upward, and maybe even at a faster pace,” Gary Van Elslander said.
The private equity firm also will keep Art Van’s sponsorship of the Thanksgiving Day parade in Detroit and continue the company’s decades-long legacy of charitable giving, the executives said.
Asked why the company put itself up for sale, Yost emphasized the opportune timing of the decision.
“The timing is right from the perspective of the industry,” the chief executive said in a phone interview. “We have been on an amazing growth curve since post-2009. The stores, the brand, some 3,700 employees are all doing the right things. And the sale is a great opportunity when you have positive momentum.”
Yost said Art Van considered multiple other potential buyers before settling on Thomas H. Lee Partners.
“We started the process by looking for great partners and we were very selective,” he said. “The chairman (Art Van Elslander) did not want to transition the business to anybody who didn’t love it and wasn’t going to continue to grow it and look after the employees.”
Thomas H. Lee Partners was started in 1974 and has acquired several hundred companies through the years, mostly in consumer goods, health care and financial services. Its current companies include Snapple, Dunkin’ Donuts, Safelite Glass and MoneyGram. Art Van will be the firm’s only portfolio company retailing furniture and mattresses.
Jeff Swenson, managing director at Thomas H. Lee Partners, said his firm will help move Art Van Furniture into its next growth phase.
“Over nearly six decades, the company has continuously realized Mr. Van’s vision and set the standard for excellence in furniture retail in the Midwest,” Swenson said in a news release. “We look forward to working with the entire team at Art Van as we continue to aggressively grow this outstanding brand.”
Art Van’s new owner is unlikely to be its owner for the next 58 years.
Pat O’Keefe, CEO of the Bloomfield Hills-based O’Keefe consulting firm, said private equity firms typically hold a new acquisition for about five to 10 years before putting the company up for sale again.
“Very few private equity firms have long-term plays,” O’Keefe said.