MONTREAL – After years of quarterly losses, home furniture supplier Dorel Inds. has announced a significant restructuring of its furniture division, or Home segment.
The move includes the closure of a Quebec manufacturing plant and resulting layoffs, further layoffs of non-manufacturing personnel, the acceleration of a SKU-reduction initiative and further distribution footprint reduction.
The restructuring follows the closure of the company’s Ameriwood plant in Ohio last July, which resulted in 130 layoffs. Other brands in the Home segment include Cosco, DHP, Little Seeds, Notio Living, Ollie & Hutch, Signature Sleep and RealRooms.
“This strategic move is part of the company’s efforts to realign its business model to current and anticipated future industry dynamics and the reality that revenue expectations for the Home segment require a much smaller footprint than in the past,” the company said in a release. “Given the importance of this restructuring, the update holds considerable relevance for both the upcoming fourth quarter results and the expectations for the 2025 fiscal year.”
The company said the workforce reduction has already completed as of the fourth quarter. It “reduced the size of these functions by 30%” and resulted in one-time severance costs of $4 million, which the company said most of which will be paid over 2025.
Production at the closing Quebec facility is expected to end before the end of the first quarter, the company said. The plant had been making mattresses exclusively.
“Alternative supply sources have already been identified to ensure seamless fulfillment of existing customer orders and to provide a reliable source for future business needs,” the company said. “This change is a significant step towards achieving the overall footprint reduction target for the segment.”
Regarding SKU reduction, Dorel said its attention to e-commerce had “created a larger than necessary warehousing footprint,” particularly in the U.S.
“With brick-and-mortar now playing a more important role in the Home segment’s channels of distribution, the focus in 2024 was to reduce the number of SKUs targeted for e-commerce, which is expected to reduce warehousing in the U.S. by approximately 1.2 million square feet by the fourth quarter of 2025.”
The company added that it will continue to serve its customers and DTC consumers from both West Coast and East Coast warehouses. In Canada, a warehouse also will be maintained to service all Canadian sales.
These initiatives are expected to save the company $9 million in costs, with an additional $9 million to be saved in non-cash write-offs and accelerated depreciation of assets. Savings began in 2024 and will be fully realized in 2026, the company said. Around $40 million is expected in earnings improvement by 2026.
Lastly, the Home segment has named a new CEO in Troy Franks. Franks returns to the company after a one year absence, before which he had spent 16 years working in the Home segment. He replaces Norman Braunstein, who will retire after nearly 22 years of working at Dorel.
Dorel’s Juvenile segment remains strong, the company said, and has been outperforming the Home segment for many quarters.
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