La-Z-Boy will move its wood casegoods production to Asia, including the bedroom furniture lines of American Drew and Kincaid.
La-Z-Boy will move its wood casegoods production to Asia, including the bedroom furniture lines of American Drew and Kincaid.

MONROE, MI - La-Z-Boy said it will close its Hudson, NC, plant, moving all casegoods production overseas as part of its restructuring efforts. The residential furniture company also said it will sell its Lea furniture brand.

La-Z-Boy (NYSE: LZB) announced April 16 it is "transitioning to an all-import model for its wood furniture." The company plans to shutter the Hudson, NC, plant in the second quarter of its fiscal 2015, resulting in a loss of approximately 100 jobs. 

The wood casegoods business represented approximately 10% of La-Z-Boy's revenues.The plant also produced bedroom furniture collections for Kincaid and American Drew brands, which the company said accounted for approximately 12% of its wood furniture business. These bedroom lines will also be moved overseas.

The Hudson facility also produced furniture for the hospitality business.  La-Z-Boy said it will exit this market.

"After careful analysis and much consideration, we made the difficult decision to transition our casegoods operation to become solely an importer of wood furniture," said Kurt L. Darrow, chairman, president and CEO of La-Z-Boy Inc. "We have implemented many changes to our casegoods manufacturing model over the past few years to be more competitive. However, in the final analysis, we determined we cannot generate enough domestic volume to support the size facility we operate in North Carolina and believe this move will strengthen our positioning and performance in the segment. With strong manufacturing partners and a global supply chain team on the ground in Asia managing quality and logistics, we will seamlessly transition our remaining domestic bedroom product offerings."

Darrow said the restructuring will not impact Kincaid's upholstery business.

La-Z-Boy Sends Casegoods Production Overseas, Sells Lea FurnitureIn related news, La-Z-Boy said it will sell Lea Industries, its youth furniture business. "With respect to our youth business, Lea is not a strategic fit from a size perspective in terms of its revenue or earnings, and we believe our efforts would be enhanced by focusing our resources on the core casegoods product lines, which include bedroom, dining room and occasional pieces, positioned in the mid to upper-mid price points of the market," Darrow said. "As we market the Lea business for sale, we will continue to service our existing dealers while providing them with product until such time as a new owner is found."

This comes on the heels of La-Z-Boy's selling of Bauhaus USA to an investor group led by Britt Allred, Bauhaus president. That transaction is expected to close in the fourth quarter of fiscal 2014. Bauhaus offers primarily contemporary sofas, sectionals and occasional chairs marketed in the U.S., Canada, Far East and Europe.

With the divestiture of Lea and Bauhaus, La-Z-Boy's brands include: La-Z-Boy Residential, Hammary Furniture, Kincaid Furniture, England Furniture and American Drew.

By the end of the year, La-Z-Boy  said it also will consolidate a warehouse and repair facility from two North Wilkesboro, NC, locations to one in Hudson.

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