Kid Brands Closes LaJobi Children's Furniture Operation

Kid Brands Closes LaJobi Children's Furniture OperationEAST RUTHERFORD, NJ - Kid Brands Inc. is closing its LaJobi wood furniture operations, a move which the company says will save it $4 million to $6 million in annualized savings. Kid Brands did not say how many employees will be affected by the LaJobi closure.

Based in Cranbury, NJ, LaJobi designs and manufactures infant and juvenile furniture including cribs, changing tables and dressers, under the Graco, Heidi Klum, Serta, Nursery101, Bonavita, Babi Italia and Europa Baby brands. Products are sold through major retailers such as Toys R Us and Kohls, big box stores and online.

In the May 22 announcement, Kid Brands said the company and Graco Childrens Products mutually agreed to discontinue the license agreement, "including an immediate waiver of LaJobi's obligation to pay additional guaranteed royalties." Kid Brands also said it will sell LaJobi's remaining inventory of products.

Kid Brands said the LaJobi closure is part of its strategic efforts to improve overall company sales. 2014 fiscal net sales for Kid Brands' first quarter dropped 26.1% to $38 million compared to the same period in 2013. During the period, LaJobi sales declined 31.0%. Also showing significant drops were sales from Kid Brands infant bedding and accessory products units CoCaLo, 61.2%, and Kids Line, 36.5%, "due to significantly lower sales volume at certain large customers." Kid Brands' other subsidiary is Sassy.

"In working to improve Kid Brands' overall financial performance, our management team and Board of Directors are continuing to conduct a comprehensive evaluation of the company's businesses," said Kerry Carr, executive vice president, COO and CFO. "After a thorough review of our LaJobi business unit, we have determined that the wood furniture operations are unable to meet satisfactory financial objectives within the current business structure. Accordingly, we have made the decision to suspend these operations, which will allow us to focus our resources on other areas of our business, further right-size our expense structure and continue our efforts to improve Kid Brands' overall profitability."


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