by With an estimated 2.5 million-plus square feet in capacity, the move gives the upholstery manufacturer its first US production, placing it closer to its 2nd-largest customer base
HIGH POINT — Motion upholstery specialist Man Wah’s addition of the Southern Motion and Fusion upholstery brands to its line through its $32 million acquisition of parent Gainline Recline Intermediate Corp. marks an evolution in its global manufacturing footprint that is expected to give the company an enhanced competitive edge in the future.
With an existing manufacturing footprint in countries such as Vietnam, China, Eastern Europe and Mexico, the acquisition gives Man Wah its first production in the U.S. This capacity includes motion and stationary manufacturer Southern Motion’s Pontotoc, Mississippi-based production and Fusion Furniture’s production facilities about 10 miles north in Ecru, Mississippi.
Southern Motion’s production is estimated at more than 2 million square feet, and Fusion’s production is estimated at more than 450,000 square feet.
This not only boosts Man Wah’s overall global manufacturing capacity, but also puts its production closer to its second largest customer base after China, at an estimated 27% of overall volume.
“We are very excited about the acquisition,” Gabriele Natale, managing director of Man Wah USA, said. “Having a base in the United States will help the overall Man Wah business a lot.”
While many will view the purchase as something driven by tariffs, Natale said this represents more of an evolution of Man Wah’s business and global footprint.
“Everything that happens globally has an impact on what we do,” he said. “But when you look at Man Wah you look at a global player, and if you look at how we do business with the world, it is a global approach.”
With the ink barely dry on the closing that occurred Thursday morning, Natale said it is too early to spell out details of the short- or long-term strategy, although the plan right out of the gate is to keep the Southern Motion/Fusion business as a separate entity.
Through the acquisition, Man Wah has acquired a 100% ownership in Gainline Recline Intermediate Corp., including assets and liabilities. According to a release issued Thursday, this makes Gainline and its core brands a wholly owned subsidiary of Man Wah, meaning that the financial results, assets and liabilities will be consolidated into the group’s statements.
The release went on to note that “concurrently with the acquisition, MW HK Trading granted an interest-free loan of $26,670,335.51 to the Target Group to repay a U.S. bank facility. The total acquisition value, including the debt retired at closing, amounts to approximately $58.7 million.”
With its new domestic production, the move positions the company to deliver quickly to its customers in the U.S. market, while also potentially offering more custom options in its line. It also adds volume beyond the limits of its direct container business.
“When it comes to direct containers, you will never hear me say we are maxed out, because there is always room for improvement,” Natale said. “But we are not going to find $250 million to $300 million dollars’ worth of business in direct containers. Having a U.S. base will have a major impact to the Man Wah business. It makes us a much more compelling vendor.”
