Klaussner to consolidate production, lay off 130
By Furniture Today Staff -- Furniture Today, January 14, 2008
Asheboro, N.C. — Manufacturer and importer Klaussner Home Furnishings said last week it will lay off 130 employees as it consolidates its Plant 5 production into its Plant 1 and Plant 9 facilities here over the next two months.
The company cited the bankruptcy filings of two of its largest customers, retailers Sofa Express and Levitz Furniture, which President and CEO J.B. Davis said "left us with no choice but to consolidate our business.
"Our goal has always been to provide as much work as possible for all our employees. Making this decision has been very painful, but this sudden loss of business put us in a position of having to make a decision based on the best interest and overall welfare and long-term success of the entire company," he said.
Sofa Express, owned by Klaussner, owed almost $45 million for a series of loans, advances, letters of credit and trade debt. In the Levitz case, the retailer owed trade debt of $2.7 million to Klaussner, according to court documents.
Despite those losses, an uncertain housing market, rising fuel costs and other economic challenges facing the industry, Davis said he felt "extremely good about our company's future with the programs we have recently initiated at Klaussner, and the workforce we have in place."
During the High Point Market in October, Klaussner announced several initiatives, including the launch of its new consumer brand, Klaussner Home Furnishings, an effort to promote the opening of licensed Klaussnerhome stores; a transportation and logistics program; a new Web site and other dealer-friendly programs. The company said its new Klaussner Gallery program, available to all customers, has been well received.
