Furniture Brands Re-Tunes for Contract, RTA

November 2, 2010  by in UnCategorized   

By Home Furnishings Business in Case Goods on November 3, 2010

Furniture Brands International (NYSE: FBN) will close its Appomatox, Va., plant and transfer production to plants in Lenoir and/or Thomasville, N.C.

The move is part of St. Louis-based FBI's restructuring of product lines serving contract and ready-to-assemble furniture customers.

Moving forward, FBI will source those lines from its domestic production and from contractors in Latin America and Asia.

The Appomatox plant will close early next year. This manufacturing realignment, which will result in more efficient overhead absorption and allow for a blended sourcing strategy for contract and RTA customers, will result in restructuring charges totaling approximately $7 million with annual cost savings of approximately $5 million.

"Our manufacturing philosophy for the RTA and contract businesses is the same we've used for our core residential furniture production--consolidate facilities to rationalize overheads, obtain logistics synergies, and take advantage of our scale and global supply chain," said Ray Johnson, senior vice president of global supply chain. "By doing this, we can deliver to our customers the highest quality products at the most competitive costs."