Flexsteel closing two plants

One is seating factory in Pennsylvania

Larry Thomas -- Furniture Today, September 10, 2008

DUBUQUE, Iowa — Upholstery major Flexsteel announced today it is closing two factories, including one in Lancaster, Pa., that produces residential seating.

The second plant, in New Paris, Ind., produces seating for recreational vehicles.

The company said production at the two plants will cease Nov. 9 and will result in the loss of about 250 jobs.

"The closure of these manufacturing facilities will more closely match our manufacturing capacity with our expected demand for residential and recreational vehicle seating products," said Ron Klosterman, president and CEO.

Klosterman said slow sales of motor homes and travel trailers have hurt sales of RV seating, while a depressed housing market, higher fuel costs and a credit crunch have continued to hamper furniture sales.

"We appreciate the long-term relationships with our skilled and dedicated employees at these locations and are saddened to bring these operations to a close," he said.

Klosterman said warehousing and shipping operations will continue at the Lancaster facility, but production will be shifted to other Flexsteel factories. Production at New Paris will be shifted to Dubuque, he said.

The company said it expects to take $2 million to $2.5 million in pretax restructuring and impairment charges during the first half of its fiscal year, which began July 1.