Covington Now a Kahan Family Affair
April 7, 2008,
The assets of decorative fabric supplier Covington Holdings LLC, including the Covington name, have been purchased by the Kahan family.
The retailer was started in 1948 by the late Herb Kahan, father of Robert Kahan who today heads the retailer. Herb Kahan's son, Mark S. Kahan will become chairman of the new entity, which will be known as Covington Fabric & Design LLC. Mayer Kahan, Robert's son and Mark's nephew, becomes evp. Mark's son Jonathan will work on the company's computer system upgrade.
Several other Kahan family members, spouses and in-laws are also investors.
Roger Gilmartin, an owning partner in CH LLC, remains with the company as president and ceo. Gilmartin said, "I think the industry knows that I have been searching for a strategic investor for Covington for some time. I am excited by the opportunity that this transaction will create for all the constituents in our business and I look forward to becoming a textile guy again after two years of dealing with bankers and lawyers."
Gilmartin noted, "The whole team will be the same, and we will be at furniture market in High Point and we have a new line in the pipeline for introduction at Showtime in June." In the next few months, he added, "We will be introducing members of the family to key customers and to key vendors around the world."
In addition, Covington will show at one of the off-site locations during Proposte in Cernobbio; at HD in Las Vegas; and Decosit in Brussels in September.
Gilmartin, with other investors, bought Covington from the founding Gilmore family in January 2006. The company originated in 1940 and grew to be one of the largest decorative fabrics converters in the marketplace. In October 2007, Covington was refinanced.
Mark Kahan told HTT, "My family have known and been a customer of Covington for over 40 years. We were very excited when the opportunity to acquire a business with Covington's name and reputation became available."
He added, "We know that the last few years have been difficult for the company, but the underlying fundamentals of the business are strong with loyal customers, vendors and associates, and we believe that properly funded, the company can continue to be a major player in the home furnishings market."
"The idea for our involvement originated with Bob and Mayer. They were aware that the original LBO wasn't working out, and intersected with Roger," said Mark Kahan, the retired head of Spirit Airlines and an attorney. "We got the impression that the business could be fixed and there was no doubt it could operate on eight cylinders vs. the four cylinders it was currently on. It is a franchise that could be rebuilt."
He added, "I don't claim to be an expert on decorative fabrics, but I'm not here because I'm an expert — Mayer is: he has five years experience at retail in fabrics. He has a lot of energy and will help restore the credibility in the market and in the product. We will restore the company's reputation for delivery."
Mark Kahan does bring financial, legal and regulatory acumen. Intellectual property protection "is very important. If businesses in the 21st century don't find ways to protect design, they will have problems," he emphasized.
Relating his family retail experience to Covington, Mayer Kahan said, "We're a roll up the sleeves type of place. We're going to stock a lot of goods, which is the Covington reputation, and we're going to be a fashion business — we have to be on the cutting edge and adapt to new markets." Among these are a renewed emphasis on prints and outdoor fabrics — "a first step."