Dorel will close Carina factory but retain brands
By Michael J. Knell -- Furniture Today, January 25, 2004
MONTREAL — Canadian ready-to-assemble furniture giant Dorel Inds. will close the Carina Furniture factory it acquired in September and shift most production to its facility in Cornwall, Ontario.
The Carina factory in Brampton, Ontario, is part of Dorel's home furnishings segment.
"Carina was purchased primarily for its sales, customer base and avenues of distribution," said Bob Klassen, head of Dorel's RTA furniture division. "While the addition of Carina has provided important new retail markets for Dorel, a number of factors have placed the future viability of the plant in serious doubt."
Klassen said the Carina factory is unlikely to meet Dorel's efficiency targets in a highly competitive environment, especially as the strength of the Canadian dollar continues to erode margins.
"As expected, Carina has proven to have excellent relationships with customers in the office superstore and do-it-yourself retail chains in the United States and Canada. This has opened promising new markets for Dorel," Klassen said.
He said Dorel's other factories in Canada and the United States can more effectively serve Carina's key retail accounts, which include Lowe's, Menards, OfficeMax, Staples, Home Depot, Home Hardware and Wal-Mart Canada.
"This move will improve logistics for our customers," he said. "It will shorten our delivery times."
The closure will affect some 300 employees at the Brampton plant, many of whom will be offered the option of relocating to Cornwall.
Carina founder Irvin Weitzman has retired, and its president, Steve Wahrhaftig, and vice president, Jim Fiala, will take on leadership roles in Dorel's reorganized RTA division, Klassen said.
"We're in the process of talking with (other) senior management," Klassen said. "Not all will be accommodated but some will. The entire product development organization will be kept intact and the entire sales organization stays."
The Carina and SystemBuild brand names will be retained, although their assortments will change to reflect customer requirements.
With combined annual sales of approximately US$317 million, Dorel became the second largest RTA producer in North America after the Carina acquisition, behind Sauder Woodworking.
Publicly held Dorel said the cost of the Carina plant closure will be incorporated into the cost of the acquisition and won't affect 2004 earnings.
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