After decades of operation, Klaussner Home Furnishings is shuttering its doors. Klaussner began operation in 1963 and grew to become one of the largest wood products producers in North America. With estimated sales of nearly $350 million last year, the Asheboro-based company was ranked #36 in FDMC, a monthly industry publication. More than half of its products are manufactured domestically in five different North Carolina campuses.
According to the company’s website, Klaussner was forced to wind down due to an unexpected refusal on the part of its lending source to continue funding the company. Typically, furniture manufacturers use some form of asset-based lending to help pay for inventories and other expenses.
Ken Smith is a managing partner of Smith Leonard, publisher of Furniture Insights, a monthly industry newsletter. In the case of Klaussner’s closure, he was taken by surprise, especially given the tremendous growth the industry experienced during the pandemic as people stuck at home decided to upgrade furniture, spiking demand. Smith says there may be more closures to come.
"It all depends on what level of funding any particular company has," says Smith. "You know a company has been around for a long time, maybe sitting on plenty of cash and not having any problems. Companies that have been sold and especially if they’ve sold to private equity groups, sometimes that can make it a little more difficult."
Klaussner was acquired by private investment firm Monomoy Capital Partners in 2017. The closure began Monday and will impact 945 employees in Randolph County. The manufacturer is working to assist those displaced with resources and next steps.