Furniture Business News

Creditors approve Distinctive Designs proposal

August 21st, 2007

Michael J. Knell — Furniture Today,
Canadian upholstery resource will pay some in full, give others share of profits

TORONTO — The creditors of Canadian upholstery maker and importer Distinctive Designs last week approved its restructuring proposal.


“By a vote of 98% in favor they demonstrated their belief in our proposal for improving business going forward,” said Paul Polding, vice president of sales for North America, in a letter to the company’s retailers in Canada and the United States.

The proposal, signed by Distinctive Designs President Alan Kornblum, promises to pay all creditors owed less than C$1,500 in full. Those owed more than C$1,500 will be issued payment certificates giving them a pro-rata share of the company’s profits over the five-year period 2008 to 2012.

Polding said the company’s immediate priority is to implement new product programs and win back floor space on retail floors. “I hope to convince you of the powerful improvements we have made with the reformulated product and merchandising strategy we unveiled at the Toronto Summer Furniture Show,” he said in his letter.

In mid-July, Consolidated Mercantile, a Toronto-based merchant banking and management company that owns 50.3% of Distinctive, said it would sell its stake. Kornblum is the other major shareholder.

In a release Consolidated said, “Distinctive’s sales for the six months ended June 30, 2007, continued to be impacted by a difficult retail environment due in part to the rise of the Canadian dollar and by competitive market conditions, primarily from offshore manufacturers.”

Consolidated said it is continuing to evaluate strategies that will allow it to sell its stake in Distinctive. DDFI, the operating company encompassing Distinctive Designs, has assets valued at C$8.8 million, including C$3.1 million in accounts receivable and C$4.4 million in inventory, and debts totalling C$6.8 million.

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