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SUBSEQUENT EVENT | 12 Months Ended
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Apr. 29, 2012
SUBSEQUENT EVENT | 24. SUBSEQUENT EVENT In order to expand our product offerings and keep pace with the changing customer demand trends within the bedding industry, we entered into a joint product development, sales and marketing agreement with A. Lava & Son Co. (Lava) on May 21, 2012. This agreement forms a new business named Culp-Lava Applied Sewn Solutions and will provide us the opportunity to enter the business of designing, producing, and marketing sewn mattress covers. As we enter the business of sewn mattress covers, we will be able to leverage our design capabilities and expand our product offerings from mattress fabrics to finished covers. In connection with this agreement, Lava will provide us with technical assistance and know-how for the start-up of the business and will work with us on the design, sales and marketing of sewn mattress covers. As part of the agreement, the new business will be fully funded and 100% owned by us. We plan to establish a manufacturing facility located in the Southeastern U.S. that will be selected by us. As a result, we will have two mirrored manufacturing facilities to better serve our customer base and meet current and expected demand trends in the bedding industry. We will have responsibility for all operating control of the new business, including capital expenditures and production and operating costs. We are projecting capital expenditures to start the business to be approximately $500,000 for fiscal 2013, as sewn products are a different business than our current normal operations and do not require large investments in plant and equipment. Lava is not required to invest capital into the Company. We are expecting production to start in the second quarter of fiscal 2013 with approximately 35 employees. Our plan is to let the market dictate our growth strategy and we feel it is important to enter this business gradually to protect our investment as we learn what types of products and volume meet demand trends.

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