Layoffs, closures and bankruptcies 2022. The latest to be affected in the furniture industry
Layoffs and factory closures are increasing as consumer demand for furniture and bedding has slowed.
HIGH POINT — The sudden drop in consumer demand this year has caught up furniture retailers and manufacturers off guard, leading to skyrocketing inventory levels, falling orders and supply chain chaos. This drastic change has placed many companies in a difficult financial situation, which has led to a growing wave of layoffs 2022plant and store closures and even Chapter 11 bankruptcy filings.
These problems have been exacerbated by the weak housing market, rising interest rates and turmoil inflation ratefor everything from fuel to employees. With a bear market already here, others are wondering how to define a recession what if we really could benefit the industry.
Here’s a look at some of the businesses that have been impacted by the recent downturn, including those that have had to close their business:
United Furniture Industries/Lane
In mid-June, Lane Furnitureannounced that it was replacing CEO Mike Watson with former Standard Furniture CEO Todd Evans. Evans had served in anewly created role of Presidentcrate items and global sourcing at Lane since March 2021. At the same time, Jay Quimby, executive vice president of sales and a 23-year veteran of the company, also departed.
“Our main goals coming out of the pandemic are to focus on improving the products, their value and their overall reliability,” Evans said at the time of his appointment.
Shortly after, the companynamed Ruff Thomas and Keith Newsinto sales leadership positions within a restructured sales team. Thomas was president of Lane’s domestic division sales and News was named president of Lane’s import division sales. Both were furniture veterans. News previously worked with Evans at Standard Furniture, and Thomas previously managed sales at another Mississippi upholstery manufacturer, American Furniture (since renamed Peak Living).
“A key characteristic that has allowed them to succeed over the years is their ability to listen actively and attentively,” said Evans, announcing the duo’s nomination. “Because they do, they can quickly and appropriately support their sales teams. Because they do so, they can fully cooperate with our channel partners.
Then, on June 30, the company announced that it would befire 300 people, closing its metal stamping plant in High Point. In addition, the company said it would convert a manufacturing plant in Amory, Mississippi, to a warehousing-only facility and transfer an operation from Winston-Salem, North Carolina, to a center. distribution on the east coast.
Prior to the announcement, Lane employed more than 3,000 workers in 18 factories, offices and distribution centers in California, Mississippi and North Carolina in the United States and Ho Chi Minh City in Vietnam. After the transition, the company expects to employ just over 2,700 people across its 17 US operations.
In mid-AprilCorsicana appointed a new CEO, former Leggett & Platt executive Eric Rhea. His first unenviable public task was closing the company’s 165,000 square foot boxed bed manufacturing plant in Indiana, which had only opened in March. At the time, Rhea described the move as “flattening our organization and streamlining our infrastructure” and said it was a necessary step for the company to get back to its roots based on value as a low cost mattress supplier.
Two months later, the company announced that itclose its Symbol mattress factoryin Richmond, Virginia, acquired when Corsicana acquired Symbol in April 2021. Rhea described this plant closure, along with the closure of the Indiana plant as “another necessary step in our drive to return as a industry leader in value-priced bedding”.
Less than a week later, Corsicana, with 11 affiliates,filed for chapter 11bankruptcy and began working on an asset purchase with Blue Torch Finance as a stalking horse bidder. According to its filing, the company had $151 million in assets and $260 million in liabilities. The company owed $45 million to its unsecured creditors and another $145 million in funded debt.
Corsicana subsequently secured up to $58 million in debtor-in-possession financing, which includes up to $18 million in term loans fromBlue Torch Funding which seeks to acquire Corsicana, and up to $40 million in revolving loans fromWinged Spire Capital.
In announcing the financing deal, Rhea said the company is expected to come out of the deal refocused on its core customers and able to operate with greater efficiency.
It all started with a call for voluntary layoffs at Pontotoc, Mississippi-based Southern Furniture Inds., parent company of upholstery maker Southern Motion and upholstery maker Fusion. Citing a slowdown in demand, the company said it would reduce its workforce and seek voluntary layoffs first. This appeal resulted in the departure of approximately 10 workers from the company.
Within a week however, the company announced another280 employees would be made redundantas the company sought to balance its manufacturing operations with a reduced level of demand.
“This reduction affected less than 15% of our approximately 1,900 associates across multiple locations in northern Mississippi. These are always tough decisions, and we hope to rehire these associates in the near future as demand improves,” said company CEO Mark Weber.
Interior design platform Modsy, a former darling of emerging design and e-commerce, has beenreported to have closedin late June, laying off most of its staff, according to industry reports. Founded in 2015, Modsy was one of a handful of new digital concepts that sought to replace traditional business processes with cloud-based alternatives. Modsy founder and CEO Shanna Tellerman confirmed the layoffs ina statement to TechCrunchbut also expressed the intention that the business would continue.
“We have worked hard over the past seven years to build Modsy and never expected to have to disrupt our business. Our focus has always been, and still is, our customers. We intend to fulfill orders for merchandise of customers and we are working on a process for our design department customers. We ask for your patience as we develop this plan. I hope for many people the story of Modsy will not be defined by this turn of events, and we are truly sorry for that. We want to thank our team, our designers, and our customers,” Tellerman said in the statement.
The company did not share details on the number of laid off employees.
In June online interior design sourcing platformSteelyard closedafter 24 years of activity. According to company founder and CEO Shawn Hughes, the COVID shutdown and supply chain challenges “compounded the challenges we faced as an independent organization.
Steelyard announced that an agreement with Sandow Design Group has agreed to provide a way forward for Steelyard’s 30,000 strong design community and brands. “They’re interested in taking care of the customer base,” Hughes said. “They have a similar platform on the design side for contract and hospitality,LAUNCH, and that paves the way for more residential designers. I hope our creators and brands have a happy place to be.
Furniture retailer NB Liebman has announced plans this spring toclose the century-old family business.The Pennsylvania-based company opened its first store in 1946 and at its peak operated 10 stores from Allentown through downtown Philadelphia and extending to Baltimore, Md., and Cherry Hill, NJ. The company is currently going out- of business sales.
The closure of the long-standing family business reflects the changes currently taking place in the furniture industry, with smaller retailers increasingly challenged to keep pace with the technological and logistical demands of an evolving business.