Thomasville Furniture plants to close by March 21

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THOMASVILLE, N.C. — The new owner of Thomasville Furniture Industries Inc. told employees today it is closing all operations in Thomasville by March 21, which will affect 84 employees.

The announcement by Ira Glazer, president and chief executive of Heritage Home Group LLC, was not unexpected.

Glazer is a veteran corporate turnaround expert.

There had been talk among industry officials that Heritage, which took over Furniture Brands International Inc. on Nov. 23, planned to consolidate its North Carolina operations.

According to a copy of Glazer’s memo to employees, obtained by the Winston-Salem Journal, Glazer said the company is closing Plant C at 405 E. Main St. and the Area 100 building at 505 County Line Road.

Glazer cited “business circumstances” for the plant closing decision. Heritage officials, through a public-relations group, declined to make further comment about the decision.

However, when a U.S. Bankruptcy Court judge approved Heritage’s $280 million bid for Furniture Brands’ assets, Heritage said it debuts “as a well-capitalized company, with no legacy obligations and access to the financial resources necessary to execute its ambitious business improvement and growth plans.”

Glazer indicated that employees would be let go as production winds down. Employees said they were told the consolidation was not affecting Heritage operations in Hickory and Lenoir.

“Unfortunately, this permanent closure will mean the end of all operations, and that all employees at these locations will be discharged,” Glazer said. “There are no bumping rights for affected employees.”

Local employees, who asked not to be identified for fear of losing their jobs, told the Journal in November they were to expect cost-cutting measures aimed at eliminating waste and overlaps between the divisions.

The employees said they were told that Heritage’s parent company, KPS Capital Partners, had a two-year restructuring plan in mind and has pledged to keep a furniture presence in its overall portfolio.

A Thomasville employee said today that employees “have very much been expecting this and (we) made it a lot longer than we had figured.

Many are relieved because the conditions have got so bad in here with inventory and supplies that we can’t complete orders.”

Glazer said the memo serves as the company’s WARN Act notice to employees.

The notice typically is required if a company is conducting a mass job cut — defined as more than 50 employees — involving the closing of a plant or operation within a 60-day period.

Glazer said in a separate memo sent to all Heritage employees Monday that the company was creating a new merchandising group that would have “the best assortment of products across all our brands to satisfy the needs of our core consumers.”

Glazer said in the Monday memo the job cuts “are unfortunately a necessary element of our on-going efforts to create a highly competitive organizational structure.

That said, we are proud that the many jobs saved by the formation of Heritage Home and the acquisition of our brands far exceeds the number that are being let go.”

Furniture Brands declared for Chapter 7 bankruptcy protection Sept. 9, 2012.

It is not clear whether Glazer has any experience running a home-furnishings company — a critical distinction given there are many examples of private-equity companies struggling, if not failing, to run a furniture company after pledging to use a different management and operational style than has worked in the industry.

Some analysts list Furniture Brands in that category.

Furniture Brands in the early 2000s was the largest U.S. furniture manufacturer at $2.2 billion in annual sales, primarily from the Broyhill Furniture Industries Inc., HDM Furniture Industries Inc. and Thomasville divisions.

However, the company has experienced eight years of revenue declines, according to John Baugh, an analyst with Stifel Nicolaus.

For fiscal 2012, the company had a loss of $47.3 million compared with a loss of $43.7 million in fiscal 2011. Sales were down 3 percent to $1.07 billion.

In the past 12 years, Furniture Brands has eliminated at least 8,860 jobs in North Carolina — including at least 2,874 in the Triad — in pursuit of lower labor costs in Asia that have not contributed to increased sales.

Counting the 80 Thomasville job cuts announced today, the totals rise to at least 8,940 in North Carolina and at least 2,954 in the Triad.

13 comments

  • Bigjohn

    “In the past 12 years, Furniture Brands has eliminated at least 8,860 jobs in North Carolina — including at least 2,874 in the Triad — in pursuit of lower labor costs in Asia that have not contributed to increased sales”.

    That pretty well says it all and many other corporations in this country are doing the same thing. If you want to blame high unemployment on anyone it is the same folks that were bailed out in 2008 with tax payer money and are making a killing on Wall Street. Our law makers will do nothing about it because the same people own them too. Greed and lack of concern for fellow Americans have put us in the mess.

  • observer10

    The next time you or a relative buy a bed,couch,chair, or table; look at where it was made. How about automobiles and trucks. You don’t always have a choice, but many times you do.

  • David Hedgecock

    It’s not the Furniture Companies or the Manufactoring sector that’s to blame here. They want to make a profit;;but bottom line is they cannot stay in business unless they are able to make a product and sell it at a profit. When you have companies that are manufacturing products offshore with cheaper labor costs;;;then that’s where they’re going to go. It happened in the Northeast U.S. in the 20’s, 30’s and 40’s where labor costs in that area of the US drove the textile industry to the South for cheaper labor costs;;;Now it’s happened to us in the South.
    But the government doesn’t help matters when people can get more for welfare and foodstamps, than they can on working at a job paying minimum wage or near that level. 33 states are in that category;;and N.C. is not far away from that.
    Our whole manufacturing base in the US has eroded except in certain areas;;;and they’re high tech;;such as Computers, Areospace and Aircraft, and Medical tech industry and a few others.
    We are a very long way in our country in solving this difficult problem;;it will take a decade or two.;;But it’s not good when a country doesn’t make much of what it consumes. That should be our thrust and focus;;;to get back to making most of what we use and wear. We do very well in making or producing most of what we eat.
    We really need a leader whether he be Democrat, Republican or Other;;that can really effectively communicate the problem and how to address it effectively as a country;;Hopefully, his or her arrival is in the near future;;because;;;”Living off the Government handouts and foodstamps;;;is no future;;;and no way to lead the world.

    • JT

      Not sure how “blame the poor and those on welfare” made it into this post, but what I do find funny is your failure to address the obvious. Corporate America–that includes the textile/furniture industry–are the biggest welfare queens you have ever seen. So before you cite the “shiftless, lazy welfare queens” that you see in the grocery store, why not point that finger at the corporations? That shaming/blaming is far more appropriate for them than it is for your neighbors.

  • feelinlow

    My husband works at the area 100 plant. After they had a meeting yesterday around 9 a.m., they called a cop in. Kind of gives you an idea of what they think of their employees, doesn’t it?
    My husband worked for TFI from 1988 to 2005, when they shut down Plant A in Thomasville. Then, when he was laid off from another job and needed work desperately in 2012, he went back to the Area 100 plant, taking a pay cut of $1.50 per hour from what he was making in 2005.
    Then they kick him to the curb again.
    Calling the police in to intimidate employees seems a little over the top.
    There was no violence, or any talk of violence.
    These companies will work you until they want no more of you, and then kick you in the backside as they shove you out the door.
    In the letter they handed out yesterday, they said that some people might be needed to work past the March 21 closing date.
    They just want you to hang around until they’ve squeezed all they can out of you.

    • jackson

      amen to that!!!!!!!! my dad had work there too and they put him out to and now he only 53 year old with no job WHAT THE HELL

      • feelinlow

        I’m sorry to hear about your dad losing his job… my husband is 46 years old. These guys who are in their 40’s and 50’s may have a tough time finding a new job… many of them, that’s all they’ve done most of their lives. It hurts these guys to know that their work and the life they spent for the corporation don’t mean anything to the owners in the end.

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