By Dennis Seid
SALTILLO – Lane Furniture Industries workers thought they caught a break a couple months ago, but it proved only temporary.
Heritage Home Group, Lane’s parent company, announced a reorganization Tuesday that will lead to the closure of Lane’s Saltillo plant by March 21.
About 480 will be laid off, but it is unclear if they’ll be offered positions at Lane’s remaining manufacturing plant in Tupelo.
The Mississippi Department of Employment Security said it had not received additional details regarding the fate of that plant.
Perhaps an indication was in HHG’s other announcement that it also is closing its last two Thomasville furniture plants in Thomasville, N.C., laying off 84 people. HHG said it would not offer them jobs at other facilities.
In its letter to MDES, Heritage Home Group said “business circumstances will force us to close” the Saltillo plant. The company also said, “This closure is expected to be permanent; no employees will be retained at this plant.”
Saltillo Mayor Rex Smith said he and city leaders were caught off-guard by the Lane announcement. “We knew they had some difficulties before the bankruptcy filing, but we were feeling hopeful after they got new owners that they could continue on,” Smith said. “A lot of good people are losing their jobs, and we’re going to get together and talk about what we can do. We can’t fill all those jobs immediately, but we’re going to keep at it.”
Smith said Lane was the city’s largest employer.
Heritage Home Group owns the 830,200-square-foot facility in Saltillo and the 715,951-square-foot plant in Tupelo. It leases the 494,813-square-foot distribution center in Wren and the 423,392-square-foot distribution center and office in Verona.
Lane is among the furniture companies that were under the umbrella of the former Furniture Brands International. After six consecutive years posting losses, and recording another quarter in the red, the company in September filed for Chapter 11 bankruptcy protection.
Lane, Broyhill, Lane Venture, Thomasville, Pearson, Henredon, Hickory Hill, Drexel Heritage, La Barge and Maitland-Smith, were snapped up in a bankruptcy auction in November by New York-based venture capital firm KPS Capital Partners for $280 million.
KPS put them under the umbrella of newly named Heritage Home Group in late November, and said it would offer jobs to most of the remaining 4,000 workers company-wide.
In a letter to employees dated Jan. 20 obtained by industry publication Furniture Today, HHG President and CEO Ira Glazer said the layoffs are “a necessary element of our ongoing efforts to create a highly competitive organizational structure.”
Lane, which was founded in 1912 in Virginia and merged with Tupelo-based Action Industries in 1972, employed about 1,400 people pre-bankruptcy. It’s not known how many remained after KPS formed Heritage Home Group. Tuesday’s moves may not be the last for Heritage.
Glazer said the reorganization “is now in its first phase. … there will be some disruption, as every part of the company and every person will be impacted in some way. But we will work through these changes together, and the new senior management is prepared to address issues that will inevitably arise and keep us moving forward.”
Gloria Neal with MDES said it would work in conjunction with the Community Development Foundation in Tupelo, Itawamba Community College, Three Rivers Planning and Development District in Pontotoc and other agencies to develop a “rapid response” team which would provide support service and training to affected workers.
Glazer kept a positive tone in his letter despite the layoffs.
“The process that begins today really can only end one way: with Heritage Home Group positioned as the leader in the furniture business, competing with anyone in our industry. The ride will be bumpy, so hang on – the success we achieve working together will be worth it.”
While the Lane closure is an obvious blow, several of the region’s furniture-related companies in recent weeks have ramped up hiring, including Pontotoc-based Southern Motion, which has a second plant in Baldwyn; H.M. Richards, also in Baldwyn; Tenn.-based Jackson Furniture, which opened plants in Mantachie and Myrtle; Ashley Furniture in Ecru and Ripley; and PostureCraft Mattress, which recently relocated to Plantersville.
According to Mississippi State University’s Franklin Furniture Institute, the furniture industry – the bulk of it centered in Northeast Mississippi – employs about 18,000 in manufacturing and another 21,000 with suppliers.