Family-owned Slumberland Furniture is getting into the real estate business.
The 49-year-old company acquired a 122-acre Oakdale campus from Imation Corp., the struggling data-storage company that last week announced the sale of $21 million in assets, including its headquarters campus.
It looks like Slumberland got a pretty good deal for a 550,000-square-foot complex and an adjacent 70 acres of woods. Washington County property records show the parcel was acquired for $11.5 million. The land was assessed last year for tax purposes at $17.3 million.
In an interview, President Kenny Larson, 51, said Slumberland has outgrown two locations in nearby Little Canada where it runs its headquarters, distribution, marketing and other central-office functions. Larson said there will be no rush into the new space of what eventually will be 130 to 150 employees at the new Oakdale headquarters, probably by the second half of 2016.
“We’re going to hire a design firm,” he said. “There are several office areas we could move into. We’re going to take our time and get this right. We have been looking for awhile to get everyone together.”
Larson, who succeeded his dad, Ken Larson, as president in 2008, said a large portion of the Imation complex will continue to be leased by current tenants. The future of Imation at the site is unknown. The company did not return a phone call last week.
Slumberland employs 2,000 people at 125 stores in 12 states. It plans to open seven stores this year in Illinois, Wisconsin and Missouri. Larson said sales grew last year from corporate and franchised stores by about 5 percent to more than $400 million.
“Slumberland is somewhat unique in that we started as a mattress specialty store and added other lines of furniture,” Larson said. “We’ve added bedroom, dining room and other furniture, but still have our core anchor of mattresses. Any good retailer has one product category that stands above everything else. We have spent a lot on supply-chain management. We do our marketing in house, including TV and preprint advertising.
Larson, who spent a couple of years elsewhere after graduating from business school, works with two brothers at Slumberland. Another brother and sister are not involved.
“There’s a lot of first-generation businesses that don’t make the transition, and I give a lot of credit to my dad,” Larson said. “He said success without ‘succession’ is not success. I just grew up in the business.”
Ken Larson, 73, and still active in Slumberland, was 25 when he opened the first Slumberland store in Richfield in 1967.
Another ‘solid year’ for Minnesota venture capital
The late-December closing on a $17 million round of venture capital for virtual-doctor-visit health company Zipnosis, also closed out a strong fourth quarter for Minnesota companies on the hunt for early-stage equity capital from institutional investors.
Mark Scholtes, who tracks venture capital in the region for PricewaterhouseCoopers, said there was more than $160 million in deal value announced by several companies in the fourth quarter. Yet 2015 is unlikely to surpass the $360 million raised in 2014, the best year since the Great Recession spooked investors in 2008-09. The final numbers won’t be released for a couple weeks in the year-end MoneyTree Report by PricewaterhouseCoopers (PwC).
“2015 is turning out to be another solid year for Minnesota ‘VC’ activity,” Scholtes said. “Venture capital is one of several funding options. I think it’s important because venture capitalists have been historically on the cutting edge, the ground floor of the next big thing. This also is an indicator of business confidence going forward and a broader indicator of confidence in our Minnesota economy.
“We’ve also noted a trend in Minnesota: growth of software, including health IT software, and that’s consistent with a national trend. Software has been the number one industry at the national level. There are some disruptive technologies, game-changing businesses that are software based. And we’re seeing software getting more of the Minnesota pie. Medical devices will always have a strong foothold here because of our history and the giants in town. We think it’s good to see some variety and balance.”
Marshall, Minn., solar project gets support
A 515-acre solar project proposed 3 miles east of Marshall, Minn., that will be state’s second largest solar generator has cleared a key regulatory hurdle.
The project costing $100 million to $130 million will be built and operated by NextEra Energy Resources, which will sell the electricity to Xcel Energy of Minneapolis. NextEra, based in Juno Beach, Fla., is the largest generator of wind and solar power in North America.
State Administrative Law Judge Barbara Case, who reviewed environmental and other issues, recommended the Minnesota Public Utilities Commission grant a permit for the farmland site. Her Dec. 31 report said the nearest home will be 1,054 feet from solar panels. NextEra bought one home that the project will surround. Panels will be 8 to 12 feet off the ground, the report said.
The power output will be 62 megawatts. The state’s largest solar project will be a 100-megawatt array near North Branch. Both projects are to be built in 2016. A megawatt is 1 million watts.
Wal-Mart tabs former Target CMO Francis
Wal-Mart Stores hired former Target marketing chief Michael Francis as a consultant as Wal-Mart searches for a replacement for soon-to-retire Chief Marketing Officer Stephen Quinn.
Wal-Mart is trying to rebound from a U.S. sales slump, which has dampened profits and contributed to a 2015 decline in the stock price.
“The company needs to more narrowly focus on fewer, but the most meaningful, businesses in its mix,” Michael Exstein, an analyst at Credit Suisse Group AG, said in a December report. “The changes in marketing revealed seem to be just another piece of the puzzle that the company appears to be trying to navigate.”
Some analysts say Wal-Mart needs to tap more affluent customers.
Quinn, 56, led the company’s rebranding in 2008 and helped develop the slogan, “save money, live better.”
Francis, 53, worked for Target from 1985 until 2011, a period generally marked by growth and attracting upscale customers through designer collaborations and the “cheap chic” trend.
Francis subsequently had short tours at J.C. Penney and DreamWorks Animation.