n “💩Acosta = Not a Good Look, Carlyle💩,” we noted how FS KKR Capital Corp ($FSK), a publicly-traded business development corporation placed its Acosta Inc. loan “on nonaccrual” because it was, well, clearly sh*tting the bed. Ultimately, after riding the mark down to the basement, FSK offloaded the position. It wasn’t the only stain in its portfolio. In fact, as of the end of the third quarter, approximately 1.7% of the portfolio was on nonaccrual, up from 1.2% at the end of Q2. While this, in and of itself is hardly alarming, it does mean that there are other potential restructurings sitting on FSK’s books. Indeed, one loan contributing to this uptick was to a company called Art Van Furniture.

Founded in 1958, Michigan-headquartered Art Van Furniture is a furniture retail store chain with approximately 190 company-owned stores in nine states operating, thanks to various tack-on acquisitions, under various brands: Art Van Furniture, Art Van PureSleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress and Wolf Furniture. The tack-on acquisitions were, presumably, part of the company’s growth strategy after being acquired by private equity overlords Thomas H. Lee Partners.

The Columbus Dispatch recently reported on Art Van’s strategy annnnnnnd it’s definitely a bit counter-intuitive:

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