MONROE, Mich. - La-Z-Boy announced it will close its Redlands, California upholstery manufacturing facility and move production to other North American facilities. Production at the 200,000-square-foot plant is expected to cease in October 2019.
La-Z-Boy also said it will move the leather cut-and-sew operation from Newton, Mississippi, to its other North American-based cut-and-sew facility.
According to the company, the Redlands upholstery plant currently employs about 350 people, and accounts for approximately 10 percent of the La-Z-Boy branded business total upholstery production. The facility manufactures recliners, motion sofas and classics (high-leg recliners).
The move of the Newton leather cut-and-sew operation is expected to fully transition by the end of calendar 2019 and will impact about 105 of the 525 employees at the location.
La-Z-Boy (NYSE: LZB) said the two actions, announced Aug. 8, will strengthen the residential furniture giant's supply chain manufacturing footprint.
“We regret the impact these actions will have on those employees affected and will provide outplacement assistance during the transition period," said Kurt L. Darrow, chairman, president and CEO of La-Z-Boy Inc. "We greatly appreciate the contribution of each employee and thank them for their years of dedicated service. However, after an in-depth review of our supply chain, due to ongoing productivity improvements, we determined these moves will further optimize our operations and strengthen our competitive positioning in the marketplace.”
Darrow said the transitions in manufacturing should not impact customer service, deliveries or the consistent freight costs. “With 3.7 million square feet of North American manufacturing space for the La-Z-Boy branded product and about 5,000 employees in those facilities, we have the capacity to not only service existing business but expand our volume as we execute various growth strategies.”
The company said it expects to incur approximately $5 to $7 million in fiscal 2020 of one-time pre-tax charges related to the transitions, which will be excluded from Non-GAAP results. Beginning in fiscal 2021, the company anticipates ongoing annual operating savings of approximately $4 to $6 million pre-tax.
Founded in 1927 and headquartered in Monroe, Michigan, La-Z-Boy Inc. markets furniture for every room of the home. The La-Z-Boy Upholstery segment companies are England and La-Z-Boy. The Casegoods segment consists of three brands: American Drew, Hammary, and Kincaid. The company-owned Retail segment includes 156 of the 353 La-Z-Boy Furniture Galleries stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture.
The company is ranked #11 in the latest FDMC 300 list of largest North American wood products manufacturers.
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