Layoffs uncertain at Lane

By Dennis Seid/NEMS Daily Journal

In its conference call Thursday, Furniture Brands International Chairman and CEO Ralph Scozzafava said the company was focused on getting stronger and cutting costs.
Among the cost-cutting measures is about a 3.5 percent reduction in its 8,700-member workforce, which would mean about 300 layoffs.
“Most of that (is) in back office functions, a lot of support functions, HR, IT, finance,” he said. “We don’t like making decisions like that, but we have to get our company where we’re both efficient and effective.”
But company officials decline to address reports that hundreds of Lane Furniture employee positions are on the chopping block. They declined to provide a breakdown of when and where the layoffs would occur, only that the 3.5 percent cut would be company-wide.
Furniture Brands is the parent company of Lane, Broyhill, Drexel Heritage, Henredon, Maitland-Smith and Thomasville.
Lisa Hanly, a spokesman for the company, said the layoffs were made across the board and declined to provide more details, referring to Scozzafava’s remarks.
She did say reports of hundreds of layoffs at Lane were incorrect.
And in his call with analysts, Scozzafava did talk about Lane, but didn’t mention any layoffs when asked by a reporter of any reductions there.
“We have got two very good facilities in Mississippi, and they’re two of our biggest and best plants,” he said. “We’ve got some very good operators there. They’re very productive, they’re low cost and we like them a ton. The thing we’ve got to do – and I know the entire Lane sales force is energized around – is how do you fill those facilities. The best thing we can do is fill those up to create overtime, to have them run Saturdays, to have them run at night, and that’s what we’re anxious to do.
“We like what we have there. We think they’re very high quality, high speed. They allow us to be custom. They allow us to be quick, and we think those are all parts of the equation that enables Lane to win.”
Lane employs about 1,500 workers in its facilities in Belden, Saltillo, Verona and Wren. Lane builds furniture in Belden and Saltillo. It maintains an office in Verona, and the Wren facility is a distribution warehouse.
Mickey Holliman, along with Bo Bland, founded Action Industries in 1970. Action was bought by Lane in 1972, and in turn was acquired by Interco – the predecessor to Furniture Brands – in 1987.
In its most recent third quarter that ended Sept. 30, Furniture Brands recorded a net loss of $24.5 million, far exceeding the $2 million loss it posted for the same period a year earlier.
The company said sales fell 5.1 percent, from $272 million a year ago to $258 million in the most recent quarter.
The cost-savings measures will save about $30 million annually, Scozzafava said.
“We’re a lean company and we want to have a lean culture and we’re going to look at lots of things to reduce costs,” he said. “A lot of these cost reductions weren’t people-related at all. We’ve got a lot of initiatives to take costs out.”
He also said future cost savings will come from new plants in Mexico and Indonesia. In an earlier investor presentation, the company said it would close the Wren distribution center next spring, when its lease expires.
dennis.seid@journalinc.com