Durham to restructure
Will close 1 plant, HP showroom
By Michael J. Knell -- Furniture Today, January 14, 2008
Durham, Ontario — Solid-wood bedroom specialist Durham Furniture received court protection last week to help it restructure its finances and operations.
The company also said it will close its plant in Chesley, Ontario, laying off 150 workers, and its showroom in High Point.
Durham will restructure under the Companies' Creditors Arrangement Act, similar to the U.S. Chapter 11 law. The Ontario Superior Court of Justice named the Toronto-based accounting and consulting firm of Ernst & Young as monitor.
In a statement, Durham said it needs to reorganize because of the weak retail environment in the United States, the strong Canadian dollar and the underutilization of its manufacturing capacity.
"This difficult decision is the best course of action given the current economic conditions and challenges," said CEO Michael Pitman.
Durham will eliminate about 150 jobs as it consolidates all manufacturing into its main plant here. It will not show at the High Point Market in April.
However, the company said it intends to continue to support its U.S. retailers using its independent sales force.
It showcased new collections at this month's Canadian Home Furnishings Market in Toronto.
The Durham statement said Pitman "will assume a consulting role to assist the company during the initial transition period," suggesting there will be changes in senior management over the coming weeks.
In 2004, Durham invested C$38 million to build a 147,000-square-foot case goods manufacturing facility, designed to increase the company's efficiency and output from 850 to 1,400 pieces a day.
However, the plant was mothballed less than a year later when sales began sagging because of the increasing value of the Canadian dollar.
At its peak, Durham shipped about 75% of its volume to U.S. retailers, making it particularly vulnerable to currency swings.
The company's management expressed confidence the 108-year-old furniture producer will weather the current storm.
"While these decisions affect many valued employees, we believe the necessary structural changes will benefit the company for the long term" said Wayne Brohman, chief operating officer.
Durham Furniture completes restructuring
06/19/2009Durham Furniture completes restructuring
07/13/2009Durham Furniture to restructure
01/09/2008Durham's creditors approve plan
04/06/2009Durham shrinks to survive
03/02/2008
