It has never been our desire or intention to exit domestic wood furniture manufacturing. We have reacted to the demand of our retail customers and the consumer for high-value imported products and the changing business model in our industry.
Paul B. Toms Jr., Chairman, CEO and President, Hooker Furniture

Hooker Furniture will close its last domestic wood furniture plant, located in Martinsville, Virginia in March of this year.

The move results from a continuing trend of decreased order and sales rates for the Company’s domestically produced wood furniture and increased demand and sales for its imported wood and metal furniture. The trend at Hooker, one of the nation’s largest sources for residential wood furniture, reflects the shift of furniture production offshore throughout the industry. The Company expects to reduce fixed operating expenses by $2.8 to $3.5 million annually by closing the Martinsville facility.

“It is sad to see Hooker’s wood furniture manufacturing era come to an end and to close the factory that has been the workplace for so many fine employees since our beginnings in 1924,” said Paul B. Toms Jr., Hooker's chairman, chief executive officer and president.

“It has never been our desire or intention to exit domestic wood furniture manufacturing,” he said, adding, “We have reacted to the demand of our retail customers and the consumer for high-value imported products and the changing business model in our industry.” Since 2003, Hooker has closed a domestic wood furniture plant each year as its product mix has increasingly shifted toward imported wood and metal furniture.

“While we come to the close of one era, we see a bright future as we embark on a new era in our history,” Toms said. “We believe it is in the best long-term interest of our shareholders, customers and remaining employees to focus on what we do well. Our transition to a marketing, logistics and global sourcing business model for wood and metal furniture is now complete. We can head into the future concentrating on what we do best, what we are known for and what we can do most profitably, and that is offering high-value imported wood and metal furniture, and domestic and imported upholstered furniture,” he said.

The Martinsville plant employs approximately 280 employees, representing about 27% of the Company’s total workforce, and produces bedroom and home entertainment furniture. The facility is part of a 760,000-square-foot manufacturing and warehouse complex located next to the Company’s headquarters in Martinsville. While the plant will close by late March, the Company expects the warehouse operations will continue for the foreseeable future. “Due to current inventory levels, the Company expects no impact in the near term on delivery schedules to dealers,” Toms said.

Going forward, the Company will now operate approximately 2.8 million square feet of factory and distribution space, excluding the Martinsville manufacturing and warehouse complex. The Company will continue to operate its corporate headquarters and central distribution center here, along with two upholstery assembly plants and two upholstery supply plants operated by its Bradington-Young subsidiary in North Carolina, and multiple warehouses located in Virginia, North Carolina and China.

“The employees at our Martinsville plant are hard-working and have a long, loyal tenure with the Company,” Toms said. “They have been patient and flexible as we have struggled to create demand for our domestically produced wood furniture. It is through no fault of theirs that we have had to exit domestic wood furniture manufacturing.”

“Hooker will offer a severance package to the affected employees,” said Jack R. Palmer, vice president – human resources. “In addition to the severance package, eligible Martinsville employees will be entitled to receive distributions from the Company’s retirement plans, including Hooker’s Employee Stock Ownership Plan. Employees also will be eligible for placement counseling under Trade Act programs that provide assistance to trade-affected workers.” The Company has no plans to transfer any of the Martinsville employees to other locations.