The two major shareholders of Cousins Home Furnishings on Monday said they have made an additional $4 million equity investment in the San Diego-based company, which last month changed the name of its 22-store furniture chain from The Brick Warehouse to Furnishings 2000.
The company also announced a $500,000 investment by Admarketing, a Los Angeles marketing firm that has handled Cousins' media campaign during the name change.
Cousins will use the additional $4.5 million to finance the change to the Furnishings 2000 chain, according to Daniel Selznick, director of Cousins' executive committee.
"We're totally satisfied that we're on right track (with the change to Furnishings 2000)," said Selznick, who added that Cousins now has "everything in place . . . to do business with the 80% of the (market) which has between $15,000 and $60,000 in family income."
The Brunton Corp., a U.S. corporation that owned 56% of Cousins' stock before Monday's announcement, has boosted its equity position in the company by $2 million. The principal owners of the Brunton Corp. are the Brunton family, principal owner of The Brick Warehouse furniture chain in Canada. Cousins officials said they had not yet calculated Brunton's new equity position in terms of percentage.
Warburg Pincus Capital Partners, a New York investment firm that last year invested $6 million in Cousins, also boosted its investment by $2 million. If the firm exercises all of its warrants, it would own about 20% of Cousins' stock, Selznick said.
Brunton, Warburg Pincus Capital Partners and Admarketing will receive convertible subordinated notes and Cousins stock warrants in exchange for their investment.
During the November annual meeting, Cousins' board of directors boosted its total number of shares available from 10 million to 20 million. About 2 million of those shares fulfilled last year's equity agreement with Warburg Pincus Capital Partners. In November, Selznick said the added shares would be used "for possible future financing and acquisition transactions."
Cousins' stock rose three-quarters of a point Monday, to 6 3/8. Bolstered by an $8-million, non-operating, pre-tax gain generated by the sale of a subsidiary, Cousins recently reported $6 million in net income and $23.2 million in revenue for the second quarter ended Dec. 31. That compared to a $4.6-million net loss and $28 million in revenue during the second quarter a year ago.