Showroom closures part of Heritage Home changes
The Broyhill Home Collections showroom on U.S. 321 in Blowing Rock that welcomes every northbound visitor as they turn onto Main Street with its ornate stone-and-log construction has closed.
The showroom closed Friday, along with Broyhill showrooms in Hickory and Granite Falls, according to The Blowing Rocket newspaper and Furniture Today, a furniture industry publication.
A spokesman for Heritage Home Group, of which Broyhill Furniture is a part, declined Friday to discuss the closings, which are the latest outward sign of the changes undergoing the former properties of Furniture Brands International. Furniture Brands filed for bankruptcy protection in September, and private-equity firm KPS Capital Partners bought all of its assets in November and put them in a new company, Heritage Home Group.
Two weeks ago the company announced it would close last two Thomasville Furniture plants in Thomasville, which will result in 84 layoffs and consolidation of operations at Lenoir and Hickory. Heritage Home also eliminated brand separations, under which each brand functioned essentially as its own company, and reassigned the various brand presidents to new positions. Chief executive officer Ira Glazer, considered a specialist in turning around struggling manufacturers, said in a statement to employees that the new "one company" structure will make sure the company has the “best assortment of products — not the biggest assortment of products — across all of our brands to satisfy the needs of our core customers.”
The closed Broyhill showrooms were a remnant of a brand-centered strategy. The 20,000-square-foot, two-level showroom in Blowing Rock, which opened in 2004, was the first of about 40 that Broyhill Furniture planned to open by mid-2007, but the push stalled, Furniture Today reported. The showrooms were to feature 10 facades with architectural elements appealing to differing consumer profiles in various parts of the country.
Downsizing and cutting jobs may be only short-term bad news for a company that could see gains in coming months because of the growing resurgence of the furniture industry, said Brandon Ruiz, a furniture manufacturing analyst with IBIS World, a market research firm.
“As the housing market continues to rebound from recessionary lows, consumers are expected to purchase new furniture for their homes,” Ruiz said. “Additionally, rising disposable income and declining unemployment levels are expected to exacerbate this trend.”
But, Ruiz said, furniture manufacturing is highly competitive, driven by cheap overseas labor.
“Fortunately for Heritage Home, the company has manufacturing facilities in the Philippines, Indonesia and Mexico,” Ruiz said. “Additionally, the company’s premium furniture products, which typically yield higher profit margins, are expected to benefit as economic conditions continue to improve.”