Stanley to close plant
Will shift more production offshore
By Thomas Russell -- Furniture Today, May 17, 2010
STANLEYTOWN, Va. —
Case goods manufacturer Stanley Furniture said last week it will cease production at its main plant here by year end and will convert much of the 1.7 million-square-foot facility to a warehouse and distribution operation in order to help reverse ongoing losses and return to profitability.
Production will cease between October and December, eliminating about 530 jobs.
The facility, which dates back to 1924, produces adult bedroom, dining room, home office and home entertainment products.
Production of those goods will be shifted to a number of overseas vendors the company has worked with for as long as 10 years. Today the company sources about a third to a half of its adult case goods line from these vendors. With the closure of Stanleytown, the entire adult line will be sourced overseas.
The closure does not affect the company's Robbinsville, N.C., facility, which produces the Stanley's Young America line of youth furniture. That plant employs about 500 workers.
In recent years, part of Stanleytown's competitive edge has been the production of custom orders. However, those orders only represent from 10% to 20% of the company's adult business, and the current level of sales doesn't justify keeping the plant open.
In 2009, for example the company's sales totaled about $160 million, down from $226 million in 2008 and about $340 million in 2006, said Glenn Prillaman, president and CEO.
“To put things in perspective, we would have to double our production to have a chance of being even marginally profitable in Stanleytown,” he said.
The company will continue its custom adult furniture business. However, it will import whitewood pieces and assemble and finish those items in Martinsville, Va., a former home entertainment and home office production facility that now serves as a distribution center.
Located about eight miles from Stanleytown, it will employ about 90 workers, while the warehouse and distribution center in Stanleytown will employ about 70 in early 2011. The company's headquarters also will remain in Stanleytown, employing another 70 management and administrative personnel.
That will leave Stanley with about 230 workers in Virginia and 500 in Robbinsville, for a total of 730. That's down from a total of 1,250 currently and about 2,500 in 2006, Prillaman said, noting that the company has also ceased production at its Martinsville and Lexington, N.C., facilities in recent years.
Prillaman said last week's announcement was a painful but necessary move for the future of the company.
“We have had cost cutting measures and layoffs,” he said, adding that the downsizings also have affected the corporate office. “We have done everything we can do and more to maintain a domestic presence on the adult side of our production line. We are out of time and money and we can't wait for the recession to ease up. If we don't make a move, we are putting the entire health of the company at risk.”
He said that customers will not see any change in the quality they are used to from Stanley.
“We are not going to go offshore and chase price,” he said. “We refuse to do business in what has become a commodity marketplace. We don't think our customer wants us to do that, and we don't think our customer will see anything but the Stanley product line getting better. At the end of the day, that is what they need to drive their business and what we are out to prove now.”
The company also announced that company Chairman Albert Prillaman, who turns 65 in December, will retire at the end of the year. He will remain on the board as a director.
Prillaman, who relinquished the CEO role to his son, Glenn Prillaman, in February, said he is confident in the company's strategy moving forward.
“Now that the transition to a new CEO is complete and we have developed this restructuring, the end of the year is an appropriate time for me to step down as chairman,” he said in a statement.
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Stanley to cease production at Stanleytown plant
May 12, 2010
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