Durham Furniture gets smaller to survive
Company will focus on Canada, eastern U.S.
Michael J. Knell -- Furniture Today, February 25, 2008
DURHAM, Ontario — Solid wood bedroom specialist Durham Furniture is getting smaller to survive and will refocus its sales and distribution on its two key markets: Canada and the United States east of the Mississippi River.
“Durham needs to be a different company. We need to be a smaller company at this time,” said president and CEO Michael Pitman. “We are focusing our U.S. distribution on a core strategy that includes the East Coast and the Midwest. We need to lower the risks that have developed with the currency and the business climate in the U.S.”
Earlier this month, the Ontario Superior Court gave the company an extension until April 4 to file a restructuring plan under the Companies’ Creditors Arrangement Act (CCAA), the Canadian equivalent of the U.S. Chapter 11.
A court-appointed monitor said the company has reached an interim financing agreement with the Royal Bank of Canada, is meeting its payment obligations, and has taken steps to streamline operations and cut costs. The court report also said Durham “has worked with vendors and customers to ensure continued supply of product.”
Pitman and Ron Fuhrman, vice president of marketing and product development, will leave the company March 31.
“The company will evolve into being a nice size but it doesn’t need the senior management staff it had,” Pitman said, adding that it was his own recommendation to leave the company. “It’s the right thing to do and the company needs senior management based in Durham.”
Wayne Brohman, chief operating officer, and Gord Dilworth, vice president of manufacturing, will head Durham’s management team starting April 1.
Using outside creative talent, Durham will focus on development of five or six new collections that can be launched when market conditions permit. Two new collections will probably be unveiled over the coming 18 months. Pitman said Durham will continue to focus on solid wood bedroom at upper-medium price points, with an emphasis on traditional and transitional styles.
“The company is in good shape from a product position and we have structured the sales organization to provide service and continuity to the dealers,” he added.
Durham also is reducing wages by about 5% for both hourly and salaried employees, in addition to the previously announced elimination of 150 production jobs.
Durham will also close its permanent showroom in High Point and is exploring sale opportunities for its factory and related equipment in Chesley, Ontario. All production will shift to the main plant here by mid-March.
Pitman said he is confident the company will survive.
“Our dealers have been supportive. Our suppliers have been supportive. Our lender has been supportive and our employees have been supportive. Our objectives are being met and there haven’t been any disruptions per se,” he said. “We elected to make Durham a smaller company to give it survivability.”
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