Lane Furniture Industries is closing its Saltillo plant, putting 480 employees out of work by March 21, the Mississippi Department of Employment Security confirmed.
Parent company Heritage Home Group is reorganizing its operations less than two months after it assumed control of most of the remaining assets of Furniture Brands International, which filed for Chapter 11 bankruptcy protection on Sept. 9.
Its brands include Lane, Broyhill, Thomasville, LaneVenture, Pearson, Hickory Chair, Drexel Heritage and Maitland-Smith.
Lane employed 1,400 people at its manufacturing plants in Belden and Saltillo, as well as its office and warehouse in Verona and another distribution center in Wren prior to FBI’s bankruptcy filing.
Saltillo Mayor Rex Smith ssid he and city officials were caught off guard by the announcement.
“We knew they had some difficulties before the bankruptcy filing, but we were feeling hopeful after they got new owners that they could continue on,” he said. “A lot of good people are losing their jobs, and we’re going to get together and talk about what we can do. We can’t fill all those jobs immediately, but we’re going to keep at it.”
Smith said Lane was the city’s largest employer.
MDES said it had not received any information about Lane’s other facilities, but a letter from Heritage Home Group said the Saltillo closure “is expected to be permanent; no employees will be retained at this plant.”
Gloria Neal of MDES said a rapid response team would be sent as soon as possible to help employees with transitioning to other jobs. The assistance would include help with resumes, unemployment benefits sign-ups, information about training programs, etc.
“We’re just waiting to hear from the company,” she said.
A spokesperson for the Community Development Foundation in Tupelo said, “CDF’s focus is to create new opportunities for Lane’s displaced workers transitioning them into re-employment. We are working with several companies and anticipate employment opportunities for these workers in the near future.”
There had been renewed hope in September when Furniture Brands attracted a venture firm, KPS Capital Partners, in addition to another firm, as potential bidders.
After a brief bidding war, KPS submitted a winning bid of $280 million for Furniture Brands at a bankruptcy auction, and on Nov. 25, it renamed the former Furniture Brands to Heritage Home Group.
At the time, KPS said, “This is the beginning of a new era for Heritage Home Group and its brands,” Raquel Vargas Palmer, a partner in KPS, said after the sale. “The company has a new owner, a new CEO, a new board of directors and a new strategic direction. Heritage Home Group launches with truly iconic brands, a solid financial structure and access to KPS’ financial resources and expertise.”
As part of its bid, KPS said it would offer employment to most of Furniture Brands’ employees.
Heritage did not say how many people it was letting go in the company reorganization, in which separate brand presidents would be eliminated and instead be led by a merchandising group.
According to Furniture Today, Heritage Home Group CEO Ira Glazer said layoff are a “necessary element of our ongoing efforts to create a highly competitive organizational structure.”
Glazer said the number of jobs being kept would exceed the number of those being laid off.
Furniture Today said Glazer told employees the new merchandising group will make sure the company has the “best assortment of products – not the biggest assortment of products – across all of our brands to satisfy the needs of our customers.”
Paul Peters was named senior vice president of merchandising to lead the new merchandising group and coordinate merchandising across all brands. Peters was most recently vice president of merchandising of Furniture Brands’ wholesale group and also was a former vice president of upholstery at Broyhill.
Former Broyhill president Mark Stephens was named senior vice president of wholesale sales for Lane, Thomasville and Broyhill.
“This reorganization, which is now in its first phase, will make Heritage Home Group a strong company prepared for the future, but will be difficult, as change always is,” Glazer said in a Jan. 20 letter to employees obtained by Furniture Today. “There will be some disruption, as every part of the company and every person will be impacted in some way. But we will work through these changes together, and the new senior management is prepared to address issues that will inevitably arise and keep us moving forward. At the same time, we also have the goal of making Heritage Home Group a place to work where employees are empowered to achieve success and fulfilled by their accomplishments.”
The two core objectives, he said, are to be profitable and operate Heritage Home as one company.
“The process that begins today really can only end one way: with Heritage Home Group positioned as the leader in the furniture business, competing with anyone in our industry. The ride will be bumpy, so hang on- the success we achieve working together will be worth it!”
Click here for a brief history on Lane, which merged with Tupelo-based Action Industries in 1972.