Larry Thomas
MONROE, Mich. — La-Z-Boy announced Monday that it has sold its American of Martinsville contract furniture subsidiary to Hancock Park Associates, a Los Angeles-based private equity firm.


Terms of the deal were not disclosed, but La-Z-Boy said it probably will result in a small gain that will be reported when the company announces results for its fiscal first quarter on Aug. 15.

Kurt Darrow, La-Z-Boy chairman and CEO, said the company opted to sell the business in order to maintain its focus on residential furniture.

“While American of Martinsville is a great company and a leader in the hospitality arena, it is not core to our strategy as a residential company,” Darrow said. “We are confident American of Martinsville will maintain its leadership position in the hospitality industry under its new ownership.”

The contract furnishings company is based in Martinsville, Va., and was acquired by La-Z-Boy in January 2000 as part of its buyout of Ladd Furniture. Its sales for the fiscal year ended in April were about $96 million, or roughly 5% of La-Z-Boy’s total revenue.

American of Martinsville President Noel Chitwood, who is remaining with the company, said the transaction will give it the financial resources it needs to continue the growth it has experienced the past two years.

“The proven operational strengths and management support for which Hancock Park is known will mesh nicely with our business strategies going forward,” Chitwood said.

American of Martinsville makes case goods, upholstery and accessories for hotels, motels, assisted living centers and government installations.