Furniture Brands International Inc., which filed for Chapter 11 bankruptcy Monday, plans to lay off 1,451 workers in Mississippi, nearly one-fourth of its U.S. workforce.
The layoffs will come from the St. Louis-based company’s Lane Furniture division, which has manufacturing plants in Belden and Siltillo and distribution centers in Verona and Wren, according to the Associated Press.
In conjunction with its bankruptcy petition Monday, Furniture Brands said it would sell most of its assets to Los Angeles-based Oaktree Capital Partners, which will provide $140 million in debtor-in-possession financing.
But Oaktree does not intend to buy the Lane brand, which Furniture Brands said it intends to sell in the next 30 days, according to a declaration by CFO Vance Johnson filed Monday with the bankruptcy court.
According to the Associated Press report, Furniture Brands executives sent a one-page letter to employees in Mississippi last week indicating that Lane “continues to be unprofitable” and “we are unsure of our ability to secure a financial solution for Lane.” It also has filed notice of the layoffs with the Mississippi Department of Employment Security.
Furniture Brands, led by Chairman and CEO Ralph Scozzafava, employs nearly 9,000 globally, including 5,400 in the U.S. The company pays wages adding up to $276 million a year, according to court filings.
Furniture Brands’ bankruptcy filing listed $547 million in assets and $550 million in debt. The company reported a $40.8 million loss in the second quarter, compared with a $6.8 million loss in the prior year period.