La-Z-Boy temporarily closed; workers furloughed

SILOAM SPRINGS — La-Z-Boy is temporarily closing all of its U.S. manufacturing facilities, including the facility in Siloam Springs, until at least April 13 in response to the covid-19 crisis, the company announced Sunday.

La-Z-Boy also is in the process of closing all company-owned La-Z-Boy Furniture Galleries stores, with 130 of 155 stores closed as of Sunday, according to a corporate press release. In addition, regional distribution centers will be closed once in-process orders are delivered, according to the news release. The decision will be evaluated again April 13.

The company furloughed about 6,800 employees or about 70 percent of its global workforce, according to the news release. The Siloam Springs facility has 412 employees, according to Audra Farrell, human resource manager.

Furloughed employees will be compensated for 40-hours this week and will have extended health benefits, Farrell said.

“As we move through this unprecedented global pandemic, keeping our employees, customers and the communities in which we operate safe and healthy is of paramount importance,” said Kurt L. Darrow, company chairman, president and CEO in the news release.

The company has followed all government regulations and recommendations and has implemented best-practice health and safety protocols, he said. La-Z-Boy isn’t aware of any confirmed coronavirus cases across the enterprise and will continue efforts to keep facilities clean and safe, he said.

“While the decisions made were extremely difficult and we deeply regret the impact they will have on those affected and their families, they are deemed necessary as we face one of the most challenging periods in our history,” Darrow said. “Moving forward, with a strong financial foundation, the powerful La-Z-Boy brand, and our dedicated and hard-working people, I am confident the company will weather this storm. Although the path forward will likely be complex and unpredictable, we expect to return to full operations when the crisis lifts, and emerge with strength.”

The company is taking several additional actions to ensure a strong ramp up once it resumes operation, according to the news release. The salaries of senior managers will be reduced 50 percent and pay for salaried employees will be reduced 25 percent until further notice. The board of directors will forego the cash portion of its compensation until further notice.

The company is also freezing its 401(k) match, eliminating all non-essential operating expenses and capital expenditures and eliminating the June quarterly dividend and termination of the share repurchase program indefinitely to prioritize near-term financial flexibility, according to the news release.

Customers can still place orders on La-Z-Boy.com and Joybird.com, which will be delivered when operations resume, according to the news release.