By Dennis Seid
Furniture Brands International CEO Ralph Scozzafava said the company’s Chapter 11 bankruptcy filing was “an important step in securing our future.”
In a memo to employees, Scozzafava emphasized, “This does not mean that we are going out of business.”
That’s also the hope of employees at Lane Furniture Industries, even as its parent company is poised to get a $140 million lifeline from investment firm Oaktree Capital Management.
Lane, which employs more than 1,400 people in the area, is not one of the Furniture Brands assets Oaktree is bidding on to add to its portfolio.
Did Oaktree not want Lane because a buyer was waiting in the wings, or is there some other reason?
Perhaps a hint comes from a letter to employees on Monday, in which Furniture Brands Senior Vice President Meredith M. Graham said Lane “continues to be unprofitable” and “we are unsure of our ability to secure a financial solution for Lane.”
That’s a stark reversal of fortune for a company many in the industry had said had been for years one of the most profitable divisions for its parent.
Furniture Brands said Monday several potential buyers were interested in Lane, but said “a sale is not guaranteed and we are exploring our options for Lane at this time.”
The last major furniture layoff in Lee County was in 2006, when the last 400 workers at Berkline/BenchCraft were let go.
Industry insiders said a buyer for Lane might be interested in Lane’s facilities – which are owned by Furniture Brands. The Wren distribution center is leased, however.
A buyer also could see potential in Lane’s products and its rich history.
But Lane, a pioneer in the motion furniture segment, also faces stiff competition in the likes of Franklin Corp. in Houston, Southern Motion in Pontotoc, and the world’s largest furniture company, Ashley.
With a liquidity infusion, Furniture Brands said it will continue to pay wages and benefits to all workers, and encouraged them to continue working hard.
“The best thing all of us can do is to continue to stay focused on delivering for our customers and demonstrate to our customers that their satisfaction continues to be our No. 1 priority,” said Scozzofava.
Lane workers, however, were not building furniture on Tuesday or today; they’ve been told to return to work Thursday.