STANLEYTOWN, VA - Stanley Furniture Co. Inc. announced plans cease manufacturing at its Stanleytown, VA, plant.
The company said it will transition the majority of the manufacturing of its adult product line there to "several strategic offshore vendors with whom it has existing working relationships."
The company said "a substantial portion" of the Stanleytown facility will become a warehousing and distribution center. In addition, Stanley Furniture will retain a domestic assembly and finish process in its Martinsville, VA, facility to continue offering multiple finish options on certain items across various product lines. These actions will take place over the balance of 2010. The Company’s Martinsville, VA, facility is currently used for warehousing.
In addition, the company said its Young America nursery and youth product line will continue to be exclusively manufactured at its Robbinsville, NC, facility, "except for certain component SKUs of nominal revenue phased over to the company’s offshore vendors to lower cost."
"We believe any sound business must have a strategy which satisfies customer needs and differentiates itself from its competition," said Glenn Prillaman, president and CEO. "Domestic manufacturing seamlessly blended with overseas sourcing has been the hallmark of our company’s operations model for over 10 years. Over that time period, the driving factors of demand for each of our two major product lines have become increasingly unique and we must adjust to address these changes in the marketplace...(T)he luxury segment of the adult market demands sophisticated finishes, exotic materials and labor-intensive features that domestic manufacturing in our Stanleytown facility can no longer profitably provide."
Stanley Furniture's plans to restructure its domestic manufacturing were announced along with its first quarter operating results. The company experienced an operating loss of $17.6 million, compared to operating loss of $3.1 million in the first quarter of 2009. The higher operating loss is primarily due to the goodwill impairment charge, manufacturing inefficiencies and the increased cost of transitioning approximately one-third of the Young America product line revenues from overseas into domestic facilities, and lower overall sales across the company’s various product lines.
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