"Hmm. Close a factory, stock goes up. Maybe Furniture Brands
Such are the thoughts that wandered idly through my Foolish brain as I read the news yesterday: Furniture maker Furniture Brands has for the second time in less than a week decided to shutter one of its factories.
Last week, the news was that subsidiary HDM Furniture Industries will cease production at its million-square-foot Morganton, N.C., facility. Some of the factory's 521 employees will lose their jobs as a result -- and cause the firm to take another round of charges for severance costs. Other more fortunate employees will be shifted to other locations within the Furniture Brands family of companies, including a smaller facility in Morganton that will continue to manufacture case goods.
But that's not the end of it. Yesterday, Furniture Brands advised that it will also be closing down its Creative Interiors factory in Carysbrook, Va. This smaller shop, with just 200,000 square feet and 170 jobs at risk, makes ready-to-assemble furniture that you can find in your local Wal-Mart
Assuming you're not one of the affected workers, you're probably wondering: "OK, but how does this concern me?" Well, consumers can relax, because according to the company, the production that used to issue from the two affected factories will now be sourced from "offshore" -- which is industry-speak for "China."
As for shareholders, relaxing may not be the most prudent course, since your company continues to shrink in size -- but there's also no need for immediate panic. For one thing, you're not alone: shareholders of Bassett
Hey, at least you have time to sit down and prepare yourself for the news.