Furniture Brands To Consolidate NC Broyhill Plants

Furniture World Magazine

Furniture Brands Creating Additional Manufacturing Capacity With Realignment of All Broyhill Upholstery Operations Move to a Single Facility in Lenoir, NC Improves Efficiency, Creates Platform for Expanded Domestic Manufacturing Furniture Brands International announced that it is consolidating all five of its Broyhill upholstery manufacturing and warehousing sites in North Carolina into a single facility in the Lenoir, NC area. The new facility is adjacent to Broyhill's existing central warehouse and will provide immediate efficiencies in logistics and workflow management and create additional manufacturing capacity. The company-owned facility is the former Pacemaker case goods plant that has been idle since 2006. "The new plan for the Pacemaker facility represents our blueprint for successful high-volume domestic upholstery manufacturing and delivers on Furniture Brands' goal of delivering operational excellence," said Chairman and Chief Executive Officer, Ralph P. Scozzafava. "With more than half-a-million square feet of space that is being configured for maximum efficiency, Pacemaker gives Furniture Brands a platform for the high-volume manufacture of a full range of upholstered products. Its location, adjacent to Broyhill's central warehouse, also offers a seamless progression from shop floor to warehouse to truck and will eliminate much of the logistics inefficiencies that our prior Broyhill footprint created," Mr. Scozzafava said. The company anticipates that the Pacemaker facility will match Broyhill's current production levels in the first quarter of 2009 with a workforce of 670. The facility could accommodate a significantly higher workforce with the implementation of multiple shifts. Administrative support and logistics staffing will reflect the consolidated nature of the new facility. "The manufacturing flexibility that Pacemaker offers is crucial to Broyhill's business," said Jeffrey L. Cook, president of Broyhill. "While the cost savings and efficiencies are important in this current environment, the real benefit comes from the ability to increase production rapidly as our upholstery business grows. In the past two years, we've created a quick-delivery line of custom leather products that now represents more than 10 percent of our sales and is viewed by retailers as preferable to Asian imports. As Broyhill continues to grow its business through the 'WOW' Strategy and consumer-tested product launches, we expect to take full advantage of the benefits of this new facility." The consolidation is expected to require capital expenditures of approximately $3 million and is expected to provide comparable annual run-rate savings once completed in the first quarter of 2009. The projected savings include a total of $4.5 million in state, county, and local incentives that are available through 2014 in the form of economic development grants and tax relief. The annualized, run-rate savings are incorporated in the company's guidance for strategic plan savings of between $55 million and $70 million. About Furniture Brands: Furniture Brands International (NYSE:FBN) is a vertically integrated operating company that is one of the nation's leading designers, manufacturers, and retailers of home furnishings. It markets through a wide range of retail channels, from mass merchant stores to single-brand and independent dealers to specialized interior designers. Furniture Brands serves its customers through some of the best known and most respected brands in the furniture industry, including Broyhill, Lane, Thomasville, Drexel Heritage, Henredon, Pearson, Hickory Chair, Laneventure, and Maitland-Smith.