|OREGON RUG AND MATTRESS PUTS A SUCCESSFUL RESTRUCTURING PLAN TO BED|
|, Feb 22, 2012
Name of Project: Oregon Rug & Mattress Company
Name of Borrower: Oregon Rug & Mattress Company
Name of Lender: West Coast Bank
Loan/Grant Type: 80% Business and Industry Loan Guarantee, 2% guarantee fee
Loan/Grant Amount: $1,500,000
Date closed: December 20, 2010
Project Location: Newberg, Oregon
Outline of Need:
Oregon Rug & Mattress is a manufacturer, wholesaler and retailer that has been in business in Oregon since 1932. As the housing market deteriorated over the recent years, however, a decline in furniture purchases threatened to pull the rug out from under the company and its 38 employees.
The company responded to the demands of a difficult economy by looking closely at their business model and instituting a major restructuring plan. In late 2009, Oregon Rug & Mattress decided to reestablish their own retail stores (BedCo Mattress Superstores). At the same time, they streamlined production processes, instituted new operating procedures and quality standards, and adopted innovative training and management methodology.
How Rural Development Helped:
Another necessary component of the strategy to move forward was a USDA Rural Development Business and Industry (B&I) guarantee, which allowed them to secure a $1.5 million loan from West Coast Bank. With the financing, Oregon Rug & Mattress Company was able to restructure debt, improve terms and increase cash flow.
As a result of the B&I guarantee, Oregon Rug & Mattress Company has experienced a significant decrease in monthly debt. In turn, they were able to further expand their retail operations to five stores, with another two stores opening in the spring, to trigger strong, gradual growth. The effort has solidified 38 existing jobs with the company, and allowed them to add another 12 employees in 2011.
"In 2011 Oregon Mattress Company / BedCo Mattress Superstores enjoyed a significant sales increase,” said Mike Vanier, President and CEO.
“The bank deal we were able to put in place through the USDA program allowed us to put our plans in motion and achieve these results. We are very pleased with our relationship with West Coast Bank and the USDA. The year 2012 has started very strong for Oregon Mattress Company, and we are looking forward to adding more jobs and doing our part in growing the Oregon economy.”