Shermag To Close Two Quebec Plants

Furniture World Magazine

Furniture maker Shermag Inc. announced that they plan to close two plants after losses grew to $7.7 million and revenue fell 17.3 per cent in the third quarter. The company said Monday that it would shut down operations at both the Disraeli and St-Etienne plants in Quebec and post a $3.5 million writedown on long-term assets in the period. Shermag did not say how staff would be affected by the closures. Company president and CEO Jeff Casselman said in a release that the decision comes after "several customers" went bankrupt and the home furnishings market began to soften. "The decision to close the Disraeli and St-Etienne-de-Lauzon facilities is made necessary by a significant domestic overcapacity arising from our outsourcing strategy," Casselman said in a release. "We continue to pursue our strategy of global sourcing of mass-produced products blended with the domestic production of choice based products." Losses for the quarter ended Dec. 29 were $7.7 million up from a year-ago $4.3 million. Revenue fell to $40.6 million from $49 million last year. Canadian sales fell 12.3 per cent in the quarter, down to $15.4 million from $13.5 million while exports fell 14 per cent to US$23.9 million.