La-Z-Boy announces U.S. closures and furloughs including Neosho factory, Springfield store

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On Sunday, Michigan-based La-Z-Boy announced it closed all of its U.S. manufacturing facilities, effective immediately.

That includes the La-Z-Boy Midwest Furniture Factory in Neosho, roughly 75 miles southwest of Springfield.

The southern Missouri factory normally employs some 800 people, the Neosho Daily News reported Sunday night. Like the News-Leader, the Daily News is among 266 USA TODAY Network newsrooms.

La-Z-Boy said it would furlough roughly 6,800 employees in total, representing 70 percent of its workforce.

As of Sunday, the company said 130 of its 155 retail stores were closed temporarily. Regional distribution centers would close "once in-process orders are delivered," the company said. Customers can order products from the company website, which will be delivered when operations resume, according to a news release.

The News-Leader was not able to reach officials at the Neosho factory Monday morning. The newspaper also reached out to a New York-based spokesperson but has not yet heard back.

Lauri Lyerla, CEO of the Neosho Area Chamber of Commerce, told the News-Leader Monday morning that in recent times La-Z-Boy operations in the Newton County community of 12,000 were "in growth mode."

"La-Z-Boy was getting ready for a big expansion," she told the News-Leader. Factory workers had been working more hours at the Neosho facility, and more employees had been expected to be added.

Neosho's economy had been growing before the pandemic, Lyerla said. The membership list at the local chamber increased by about 120 businesses over the course of last year, she said, swelling to about 530 members.

Now, all of Newton County is facing the effects of COVID-19, just like the rest of the world.

"This moment of uncertainty where we don't know what the end looks like, that's hard," Lyerla said. Past disasters such as the Joplin tornado of 2011 offered the prospect of immediate recovery, she noted. COVID-19 does not.

Lyerla believes her community is pulling together as elsewhere in America.

"In Neosho, I feel that's genuine," she said.

Cindy Yates, president of the Springfield La-Z-Boy Furniture Galleries store, said that last week her store — family-owned since 1994 — had stopped normal customer-welcoming operations as part of Springfield Mayor Ken McClure's 30-day stay-at-home order.

But, Yates said, they're doing what they can.

"Our warehouse and our desk is still open," she said. "We’re still taking trucks, and we’re still taking in goods, we will still be doing our deliveries."

Customers may call 417-883-3820 for information. When the Springfield store is open for business hours, a staffer will answer, she said.

Yates declined to discuss the number of staff normally working the south Springfield store and its nearby 20,000-square-foot warehouse, but she said her team has a considerable number of furniture orders to work through at the moment.

Like the Neosho factory, Yates said her store was doing well prior to the impact of COVID-19: She and her father, co-owner Wayne Wickstrom, were making plans to expand the warehouse.

"We're trying to keep all of our employees on board right now," Yates said. "We're trying to learn what Congress has passed, and we’re reviewing all of our situation. We’re all in this together, it’s just unknown."

Yates said she is praying for the community.

La-Z-Boy also announced that senior management salaries were cut by 50 percent, salaried employees saw a pay cut of 25 percent, and the company board of directors would skip "the cash portion of its compensation until We’re still taking trucks and we’re still taking in goods we will still be doing our deliveries further notice," the company said in a news release.

The company said it would freeze its 401(k) match for employees, eliminate "all non-essential operating expenses and capital expenditures" and would not pay a June quarterly dividend to shareholders.

It was not clear whether rank-and-file employees would receive any severance.

La-Z-Boy said it had $200 million in cash and investments on hand and drew $75 million in revolving credit.

Company chairman and CEO Kurt Darrow said in a written statement that the company isn't aware of any confirmed COVID-19 cases within its ranks.

"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 in the statement.

He said La-Z-Boy had a "strong financial foundation" and expects to emerge from the crisis fully operating. The news release said the company would update investors no earlier than late June.

Gregory Holman is the investigative reporter for the News-Leader. Email news tips to gholman@gannett.com and consider supporting vital local journalism by subscribing. Learn more by visiting News-Leader.com/subscribe.