NORWALK, Ohio - A buyer has been found for a 106-year-old Huron County furniture manufacturer whose abrupt closing threatened the livelihoods of 500 local employees.
The deal followed the resumption of operations last week at Norwalk Furniture Corp., the city's largest manufacturer and second-largest employer. The firm, which has 900 employees companywide, halted operations July 21 after slumping sales prompted Comerica Bank, Detroit, to threaten to cut off financing.
Investment firms IRG Capital Group LLC, Akron, and Blackbird Capital Partners, Cincinnati, agreed yesterday to buy the firm for an undisclosed price, said spokesman Joe Mosbrook. Details were not released.
"These investors are committed to building on the great tradition this company has represented for more than a century, and both have a long history of doing business in Ohio and investing in Ohio-based companies," Domenic Aversa, acting chief executive, said in a written statement.
Additionally, Comerica has agreed to continue financing for the firm.
The sales agreement was reached after the Ohio Department of Development agreed to provide a $2 million low-interest loan. Officials in Fulton, Miss., where Norwalk Furniture operates another plant, agreed to provide a similar loan.
Charles Rowe, Jr., president of IRG Capital, will become interim chief executive until a permanent replacement is found.
Norwalk, founded in 1902, makes high-end upholstered furniture sold under the Norwalk, J. Raymond, and Hickory Hill brands. The firm's sales chain includes five company-owned and 52 franchised stores.
It said weeks ago it had an $8 million drop in sales from 2006 to 2007. It had about 50 employees in a factory in Cookeville, Tenn., and about 300 in Fulton, Miss.
The Norwalk plant's assets have a book value of $36 million, a company spokesman said.
"Financial issues triggered by the national housing crisis caused Norwalk to temporarily suspend production until the company could procure capital needed to implement a restructuring plan," executives said.
The company spokesman was unsure when the sale will be completed.