Lenoir, NC, November 4, 2005--Broyhill Furniture, a unit of Furniture Brands International, said it would close two facilities in North Carolina, eliminating 421 jobs, or about 13% of the brand's workforce.
The plant closures come amid concerns that higher energy costs are constraining spending on big-ticket items among some consumers. In recent weeks, La-Z-Boy Inc. and Stanley Furniture Co. lowered their outlooks, citing sliding consumer confidence.
In addition, U.S. furniture makers have also been squeezed by high raw material costs and pressure from imports over the past year.
Furniture Brands cited continuing sales weakness at Broyhill, one of its mid-priced brands, in its recent quarterly results, but said its higher-end brands such as Thomasville, Drexel Heritage and Henredon were relatively strong.
"We continue to see significant difference in business between the mid-priced and upper-end segments of our business," Furniture Brands chief executive W.G. Holliman said during a conference call last week.
At Broyhill, the closures of a facility that makes wood furniture and accompanying support plant in Lenoir, North Carolina, are part of a continuing consolidation as Furniture Brands restructures.
In a research note, Morgan Keegan analyst Laura Champine noted that Furniture Brands, which also includes the Lane and Maitland-Smith brands, has closed 26 plants and eliminated nearly 6,000 jobs since 2001.
This year, Furniture Brands announced the closure of two other U.S. facilities at Broyhill and said it would merge back-office functions at some of its higher-end brands.
