Lackluster sales of adult furniture and a year-to-date loss of $14.6 million are causing Stanley Furniture Co. to consider cutting some salaried employees at the company’s Stanleytown locations.
“This is just more bad news for our community,” Glenn Prillaman, president and chief operating officer, said Thursday. “Our number one concern is for our people.”
The number of employees that will be affected will be determined by the first week in December, but “a vast majority of the layoffs will be in Stanleytown” at the corporate offices and the manufacturing facility, Prillaman said. He could not quantify how many employees might be let go.
Between now and December, Stanley will attempt to tighten spending to save jobs, he said. Also, the company is implementing a voluntary early retirement program, and it will take time to determine how many eligible people will take part in it, he added.
Stanley has 1,300 employees, including 800 in Henry County.
On Wednesday, Stanley reported that third-quarter net sales of $38.5 million were down 29.4 percent from the third quarter of 2008, and its 2009 year-to-date loss of $14.6 million compared to a $2.6 million loss for the comparable period in 2008.
Most of the $14.6 million loss was due to slow sales in the adult product line, Prillaman said. That, he said, is where the jobs will be cut.
“Our earnings are running very well below the break-even point,” he said, and the company must reduce spending.
“We have been holding on as long as we could possibly wait for consumer demand for high-end wood residential furniture to bounce back,” he said. “Instead, it continues to be lackluster. We haven’t quite found bottom yet, to our knowledge.”
At the same time, Stanley’s Young America youth furniture lines have “market leadership,” Prillaman said.
Last month, Stanley announced it was moving all Young America production to its domestic plants, and it was adding 99 employees in Stanleytown to make that happen. Thirty-nine of the 99 had been hired by mid-September.
On Thursday, Prillaman said the rest will be existing employees who will be moved into crib production, rather than new employees.
“When we made the decision to move all Young America back to the United States, there was only so much we could make in Robbinsville (N.C., its Young America plant), so we needed extra capacity in Stanleytown to make cribs,” he said. “That will continue. Because of the timing, we had to get the extra production” at Stanleytown.
“In the meantime, we waited and waited and have done everything we can” to increase sales on the adult side, Prillaman said. “We just can’t put it (the employee reduction) off any longer.”
Heading into the International Home Furnishings Market, which will open Saturday in High Point, N.C., “It’s going to be very difficult to expect, from what we’re seeing at the high end, a large appetite on the part of the retailer. We do have unique product at this market, and there are new things we’re doing. You never know,” Prillaman said.
Stanley is seeing “very positive things coming on the Young America side. The adult side is more of a struggle, but we’re going to put a plan together in the coming months to put ourselves in a healthier position,” he added.
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