Neosho, MO—La-Z-Boy Incorporated (NYSE: LZB) says it will spend $30 million over a two-year period upgrading and expanding its Neosho, MO manufacturing facility.
The 550,000-sq.-ft. plant, which began operations in 1970 and employs 950, makes recliners and other motion furniture. This category of residential furniture became immensely popular as families hunkered down with video games and streaming movies during the COVID-19 pandemic.
The plant also supports all five La-Z-Boy manufacturing operations with metal components and purchased parts. In addition to Neosho, La-Z-Boy manufactures in Siloam Springs, AR; Dayton, TN; and at San Luis Rio Colorado Ramos Arizpe in Mexico. A ground-breaking ceremony for the Neosho project is scheduled to take place on August 11, 2021.
The scope of the project includes upgrades and renovations throughout the upholstery plant, a new medical clinic for employees and their families, and a new 60,000-sq.-ft. parts distribution center. “We are making strategic investments across the organization to ensure La-Z-Boy emerges stronger in a post-pandemic environment,” says Melinda D. Whittington, La-Z-Boy president and CEO. “With unprecedented demand for the La-Z-Boy product, making improvements to our manufacturing facilities will help drive efficiencies and shorten lead times for customers and consumers.”
“These essential upgrades will improve productivity while providing for a more modern and pleasant work environment for our employees,” says Darrell Edwards, COO. The new 60,000-sq.-ft. warehouse space is expected to more efficiently service the entire supply chain across the enterprise, Edwards says.
In June, La-Z-Boy reported record sales and profits, with strong performance compared to the prior year as the pandemic took hold, which Whittington called “an extremely difficult year.”
“Our start to the fiscal year in May 2020 came as the world was still in the early stages of its COVID-19 response,” she says. “We had just restarted our plants after a month-long shutdown and retailers were slowly beginning to reopen. Now, Whittington says, all La-Z-Boy business units are experiencing record demand. “And, fiscal 2022 is off to a great start with continued robust written order rates and a record backlog, setting us up well for a strong year of shipments ahead.”
Consolidated sales in the fourth quarter of fiscal 2021 increased 41.4 percent to $519.5 million versus the fiscal 2020 fourth quarter, which was impacted by COVID-19-related plant and retail closures. For the year as a whole, which includes the pandemic shutdown, sales increased 1.8 percent to $1.7 billion. Disciplined cost management helped offset higher raw material and freight costs and expenses to expand production capacity to service record backlog, Whittington says. And last year’s fourth quarter benefited from a one-time rebate of previously paid tariffs partially offset by higher bad debt expense.
