Shermag Announces Factory Closings

February 12, 2007  by in UnCategorized   

By Home Furnishings Business in Case Goods on February 2007 Shermag announced Monday it will close two Quebec factories and shift production to Asia in a move that will eliminate 283 jobs. The news came in an third-quarter earnings statement in which the Sherbrooke, Quebec-based company reported a loss as revenues fell 17.3 percent during the quarter.

The company, which reports its earnings in Canadian dollars, said it posted a third-quarter loss of $7.7 million. For the first nine months of the year, gross revenues declined 12.7 percent to $131 million, and the company’s year-to-date net loss was $13.2 million.

“The decision to close the (two) facilities is made necessary by a significant domestic over-capacity arising from our outsourcing strategy,” said Shermag President and CEO Jeff Casselman. “We continue to pursue our strategy of global sourcing of mass-produced products blended with the domestic production of (customized) products. This difficult transition has been amplified by a general softness in the home furnishings retail market, which has been underlined by first-half losses to bankruptcy of several customers.”