Norwalk suspends manufacturing
By Thomas Russell -- Furniture Today, July 28, 2008
NORWALK, Ohio — Upholstery manufacturer and retailer Norwalk Furniture has halted operations at the company’s plants in Ohio and other states.
Bob Wanat, the company’s interim chief operating officer, told Furniture/Today last week that Norwalk had suspended operations while the company continued to negotiate its operating capital position with its bank.
More than 800 employees were affected by the announcement, which was made Friday, July 18.
A company spokesman, Joe Mosberg, said at press time last week that the company was talking to its bankers “and we hope to get a speedy resolution.”
The Norwalk Reflector newspaper reported that according to a notice from Norwalk, the company has not filed for bankruptcy protection and was continuing to evaluate its options. That included seeking an investor to acquire a minority stake in the business. In addition, several newspapers and other sources reported that Norwalk city and Ohio state officials are working to lend their assistance.
Neither company Chairman James Gerken nor acting CEO Domenic Aversa were available for comment on the negotiations. Gerken did tell Furniture/Today that the company’s showroom at this week’s Las Vegas Market will be open.
Gerken told the Norwalk paper that he hoped to find an investor within a month.
The announcement follows an earlier decision by former President Rick McKirahan and his wife, Debbie, Norwalk’s creative director, to leave the company, and the departure of two other executives. The company has since hired Chicago-based Morris Anderson & Associates to help run the company during the transition.
According to Furniture/Today’s Top 100 ranking, Norwalk ended 2007 with 54 franchised and five company-owned stores with total estimated furniture, bedding and accessory sales of $90.8 million, down 8.1% from the previous year. The store network ranks No. 73 on the Top 100.
Norwalk retailers contacted for this story had mixed reactions to the news and said that for now, they are promoting their other furniture lines.
Thomas Carlisle, owner of the Norwalk Furniture & Design franchise in Little Rock, Ark., said he remained “cautiously optimistic Norwalk will be able to move forward.”
“My take is Norwalk is a 106-year-old company that has been though the Great Depression and the World Wars,” he said. “Business for all furniture manufacturers and retailer has been challenging, but I’m optimistic, as a 10-year franchisee in Little Rock, they will survive.”
Carlisle said Norwalk accounts for about 40% of his business, with the rest coming from 20 to 30 other furniture suppliers, including Drexel Heritage, Harden Furniture, Lexington Home Brands and Stanley. It’s not uncommon for the franchisees to carry this many or more lines, he said, and it’s proving important at a time like this.
“At the current time we’re pushing our other lines more heavily,” he said. “That could change today or tomorrow (with a resolution to Norwalk’s temporary shutdown). The fact is we, as retailers, have to take care of our customers and deliver product on a timely basis.”
Rainbow Furniture in Forth Wayne, Ind., also is a multi-line store, but roughly 60% of its volume is in Norwalk furniture, said owner Tim Osborne.
“It’s not fun,” he said of the shutdown, and he’s not sure how it’s going to pan out — even with some 40 pieces of furniture he had due in from the manufacturer last week.
“We have to put some plan in (place) to make sure we can keep it going,” he said. “We’re a family business, with people to hand it down to.”
Osborne said he’s talking to upholstery sources Key City and Temple about filling the void, adding that his store specializes in American-made upholstery and he wants to keep it that way. Senior Retail Editor Clint Engel and Senior Editor Gary Evans contributed to this story.
