Hooker to close N.C. armoire, wall plant
By Powell Slaughter -- Furniture Today, June 2, 2003
Martinsville, Va. — Case goods and occasional furniture manufacturer and importer Hooker Furniture said last week it will close its plant in Kernersville, N.C., by late summer.
The 115,000-square-foot plant, which produces home theater armoires and wall units, is Hooker's oldest and smallest of five factories. Around 270 people — 12% of the company's work force — will lose their jobs.
The plant closing is Hooker's first. The company has tried to avoid a shutdown by working short, 35-hour weeks since late 2000, said Doug Williams, president and chief operating officer.
"We have seen a steady decline in orders for domestically produced products and do not foresee a time in the future when we will have enough incoming orders to run five case goods plants," he said.
Production will shift to other Hooker plants in Martinsville and Roanoke, Va., and Pleasant Garden and Maiden, N.C.
"While there's no category that hasn't been impacted by low-priced imports, home entertainment furniture probably has the brightest future of any domestic case goods," said Paul Toms Jr., chairman and chief executive officer. He added that Hooker remains committed to domestic production.
"We're in an uphill fight, but we are determined, and we have a lot of talented people devoting their time and energy to maintaining our domestic business," he said.
While they'll benefit from the extra production, Hooker's other plants will continue to work short weeks, with possible other downtime such as extended vacations.
"We have excess capacity at the other plants, so we aren't cutting back the selection of product, just where it's made," said Larry Ryder, executive vice president and chief financial officer. The shutdown, he said, "should be transparent to our dealer group as far as service and product."
Hooker expects to save $750,000 to $1.1 million a year in production costs after the shutdown. It will take a charge of between $1 million and $2.2 million in restructuring costs and related charges, mostly in the fiscal second quarter, which ended May 31.
Employees losing their jobs will receive a severance package totaling from $1 million to $1.2 million, along with job-placement counseling. The company also will apply on their behalf for extended unemployment benefits provided through the North American Free Trade Agreement.
