SALTILLO — Heritage Home Group, LLC said yesterday that it will close furniture plants in Saltillo and Thomasville, N.C., as part of a post-bankruptcy restructuring.
Heritage told the Mississippi Department of Employment Security that it would cut 480 jobs in Saltillo by March 21. The plant near Tupelo makes upholstered reclining furniture under the Lane name.
Heritage told the North Carolina Department of Commerce it would cut 84 jobs at two plants. Significantly, those are the last two plants owned by the company in the hometown and namesake of Thomasville Furniture, another of Heritage’s brands.
Heritage Home Group was formed after KPS Capital Partners, LP bought the assets of the former Furniture Brands International. KPS paid $280 million last year after the St. Louis-based firm filed for Chapter 11 bankruptcy protection, and KPS renamed the furniture company Heritage Home Group.
New Heritage CEO Ira Glazer, who helped turn around a wire rope maker KPS previously bought, wrote in a letter on Monday that layoffs were required to improve profitability.
“These reductions are unfortunately a necessary element of our ongoing efforts to create a highly competitive organization structure,” Glazer wrote. “That said, we are proud that many jobs saved by the formation of Heritage Home and the acquisition of our brands far exceeds the number that are being let go.”
Heritage Home continues to operate Lane facilities in Belden and Verona, both near Tupelo. The former management had threatened to close the whole Lane division as part of the bankruptcy.
In the reorganization, Heritage abolished the previous structures of having different subsidiaries for all its brands, including Thomasville, Broyhill, Lane, Drexel, Hickory Chair, Henredon, Lane Venture, Maitland-Smith, Pearson and LaBarge.
Furniture employment in the United States tumbled as housing sales fell and international competition took a toll, with Mississippi and North Carolina among the hardest-hit states.
After peaking in 2000 at more than 31,000 workers in Mississippi, the number of furniture workers fell more than 40 percent through 2011, according to Bureau of Labor Statistics figures. Employment has stabilized in the last two years, with some furniture makers hiring new workers even as others continue to shrink.
“Obviously we need to continue to work,” said David Rumbarger, executive director of the Tupelo-based Community Development Foundation. “It’s kind of like filling the top of the bucket while there’s a hole in the bottom.
Job losses have been even steeper in North Carolina, where furniture employment fell by 63 percent from 89,000 in 1990 to 33,000 in 2012 according to BLS figures. The Thomasville area, once dominated by furniture factories, has arguably been the hardest hit, losing more than 7,000 jobs.