LANE LAYOFFS AMONG FURNITURE BRAND CUTS

TUPELO — Some 60 workers at Lane Furniture Industries have been laid off, part of parent company Furniture Brands International’s across-the-board cuts in all of its brands, which include Lane, Broyhill, Thomasville, Drexel Heritage and Maitland-Smith Lane employs some 3,500 workers at its eight facilities in Northeast Mississippi, including four upholstery plants.


Furniture Brands said Friday a “realignment” will eliminate some 80 executive and administrative employees throughout the company; close three manufacturing plants in North Carolina resulting in about 150 layoffs; and eliminate another 100 employees — including the Lane workers — in other operations.
The moves are expected to save Furniture Brands about $13 million annually.
The company expects the realignment to cost about $4 million, which will be spread evenly over the second and third quarters.
Furniture Brands Chairman and CEO Mickey Holliman said last month the company expects first-quarter sales to drop about 15 percent, higher than the 10 percent decline it had predicted earlier.
The layoffs, he said in a statement, were needed because “we are obligated to bring our costs in line with revenues to drive better earnings performance at Furniture Brands. We regret the hardship this will cause the affected employees and we appreciate the dedicated and energetic service these employees have shown the company.”
Holliman said the company will help workers with severance and employment services.
Like many others in the furniture industry, FBI is handcuffed by slower housing starts, rising gasoline prices and other competitive pressures.
Furniture Brands’ sales grew a meager 1.3 percent last year to $2.42 billion. Net earnings dropped 13 percent to $55.1 million.
Its stock share prices have dropped nearly 30 percent in the past year, prompting Moody’s Investors Service to downgrade the company’s credit rating to “junk” status, which is a poor assessment of a company’s ability to meet its financial obligations, resulting in higher interest rates the company must pay to lenders.
Furniture Brands will announce its first quarter results Wednesday.
According to the St. Louis Post-Dispatch, Credit Suisse bank analyst Ivy Zelman wrote in a March 1 note to investors that Furniture Brands “is in the midst of an identity crisis, with a complex array of businesses with significant overlap and need of an overhaul.”
In March, at a Raymond James Financial conference, Holliman said the furniture industry was moving quickly, with some companies not adapting fast enough. Although he said FBI wasn’t in that mix, he acknowledged “some significant change in Furniture Brands.”
Before Friday’s announcement, the company had closed 34 of its 59 U.S. manufacturing plants since 2000. The company has said it will continue to source goods from outside markets, where it already gets some 50 percent of its goods. In the past six years, it also has laid off some 6,900 full-time workers, about a third of its work force. And like many in the industry, the company has begun selling more wholesale furniture made by Asian manufacturers.
According to the St. Louis paper, FBI gets its wooden furniture from China, Indonesia, Vietnam and the Philippines, although some 55 percent of its products are still made in its remaining factories in Virginia, North Carolina and Mississippi.
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