One of the nation's biggest carpet makers filed for bankruptcy today in federal bankruptcy court in Rome, Ga.
Beaulieu Group LLC said it will reorganize its finances under a chapter 11 court-supervised debt restructuring plan afters suffering losses from its traditional carpet business.
The company said its existing lenders, which Beaulieu said are owed between $50 million and $100 million, have agreed to continue to support the company by providing debtor-in-possession (DIP) financing. Such debt will be combined with cash from operations to ensure the company continues operations while it restructures its debt and finances.
"Beaulieu family members and our board of managers believe pursuing a restructuring through chapter 11 is the best path forward at this time," Michael Pollard, president of Beaulieu Group LLC, said in a statement today. "We have evaluated alternatives to address Beaulieu's capital structure, and believe that restructuring through the chapter 11 process will best position all of Beaulieu Group LLC's businesses for future success."
The 40-year-old company was once the third biggest carpet maker in America, but its industry's position has slipped as Mohawk, Shaw, Engineered Floors and Interface have grown and consumers have shifted more floor covering to hard surfaces rather than carpet.
In 2016, Floor Focus Magazine estimated the privately-held Beaulieu had $449 million in sales, or 5.6 percent of the carpet market.
Pollard said Beaulieu is changing the carpet industry's business model and client base to sustain business.
"This restructuring will allow us to invest in the business going forward and emerge a stronger organization," Pollard said. "We remain steadfast in our commitment to our customers and employees throughout this process. I am confident that we have the talented and committed team capable of executing the reorganization plan. We appreciate the support of our vendors and customers as we move through this process."