Dive Brief:
- Leggett & Platt 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.
- The bedding textile maker’s consolidation efforts are expected to reduce annual sales by approximately $100 million and lay off between 900 and 1,100 workers, according to a Jan. 11 securities filing.
- The site closures are part of the company’s bedding products restructuring strategy, which was established due to weak demand results in Q3. The process is expected to be complete by 2025.
Dive Insight:
Leggett & Platt had a challenging Q3 due to volatility in the macroeconomic environment and ongoing low consumer demand in residential end markets for its bedding, furniture, flooring and textile products, President and CEO Mitch Dolloff said in an Oct. 31 earnings call.
EVP and CFO Ben Burns told analysts the manufacturer has seen lower trade rod and wire demand, as well as continued declines in its wire grid volume. The company lowered its full-year sales and earnings projections, noting lower-than-expected volumes.
“We are not seeing the fourth quarter improvement in upholstered furniture end markets that was previously anticipated,” Burns said.
As the bedding market continues to change and competition evolves, the company’s reshaped strategy is expected to put it in a better position for long-term success, Leggett & Platt told Manufacturing Dive in an email.
“In addition, optimizing our operating footprint will reduce complexity and enhance the efficiency of our business,” the company said. “Looking forward, we expect to advance key product growth, improve profitability, and drive enhanced value for customers and shareholders.”
The company said it has begun issuing Worker Adjustment and Retraining Notification Act letters but did not say for which sites. It will begin sending out more WARN reports as it finalizes its decision, Leggett & Platt said.
Last May, the company closed its Florida manufacturing and distribution sites in Spring Hill and Tampa. The bedding maker moved and consolidated those operations to a larger site in Plant City, Florida, according to Leggett & Platt’s WARN letters to the state. Only 37 of 89 workers from both sites were laid off; the rest transferred to Plant City.
Leggett and Platt has approximately 135 manufacturing facilities in 18 countries, the company told Manufacturing Dive. About 100 are located in North America.
