Dive Brief:
- Furniture and textile maker HNI Corp. plans to close its facility in Hickory, North Carolina, by April 2025, the company announced May 20.
- The plant’s shuttering will lay off 221 employees and operations will be consolidated to HNI’s other facilities in North America. The first round of layoffs will begin Oct. 13, according to a Worker Adjustment and Retraining Notification Act letter to the state.
- The closure and consolidation will also help the HNI save $11 million a year by 2026 and cut costs associated with its acquisition of furnishing maker Kimball International last June.
Dive Insight:
Moving its Hickory operations to its other facilities is part of the Kimball acquisition strategy, the company said in the release.
“This is a strategic decision to optimize our operational footprint and improve business performance,” HNI Chairman, President and CEO Jeff Lorenger said in a statement. “This move will improve the customer experience for our trade partners and end-users, and more efficiently deliver on our commitments to safety, quality, lead-times, and reliability.”
HNI completed its $485 million Kimball International acquisition in June 2023, gaining eight more manufacturing facilities in the U.S., consisting of two in Kentucky and six in Indiana, according to a March 2023 securities filing.
The acquisition was expected to save HNI $25 million in operating costs within three years of closing the transaction, including consolidation, procurement logistics integration and improved productivity.
Now, with Kimball’s facilities being integrated, savings are expected to increase to an estimated $50 million, which includes the $11 million in consolidation and $4 million in the company’s procurement efforts.
HNI expects the consolidation will improve its productivity and operations without losing capacity or causing disruption, the company said in the release.
While the textile factory will shutter next year, HNI’s workplace furnishings subsidiaries HBF and HBF Textiles will maintain a commercial presence in Hickory and grow the business, the company said in the release.
HNI is not the only furniture textile maker closing sites and consolidating production. In January, Leggett & Platt announced plans to close up to 20 manufacturing and distribution sites in its bedding products business as well as a smaller number of production facilities in its home furniture and flooring products units.
As of May 1, Leggett & Platt have closed six sites and moved operations to its other facilities, the company said in a May 1 earnings call.
