by The move, along with other consolidation efforts, aims to return the segment to profitability sometime next year
CORNWALL, Ontario — Dorel Industries has decided to cease its domestic manufacturing operations in Cornwall, Ontario, ending its long-time history as a producer of RTA residential furniture.
The move, along with other previously announced consolidation efforts in its Dorel Home residential furniture division, aims to return the segment to profitability sometime in 2026.
The company said it decided to cease all Dorel Home manufacturing operations in North America following an extensive review of on-going operations, with support from outside consulting firm EY-Parthenon.
The company said that it would achieve savings with a smaller footprint and workforce combined with the elimination of losses from its domestic operation. It expects to wind down the operations by the end of the third quarter to both “minimize future losses and satisfy customer obligations.”
The company also has hired two leading capital market advisors to assist in re-capitalizing the company’s balance sheet “to allow for growth in the Juvenile segment and support the re-organization of the Home segment. The new structure will replace the current debt structure which no longer matches the company’s needs.”
Dorel said it will update stakeholders on developments as they arise.
It was immediately unclear how many jobs would be affected by the closure of the Ontario plant. According to online reports, the company employed about 375 workers there as of earlier this year.
The facility produces Dorel’s ready-to-assemble furniture line, including products that it formerly produced in its Tiffin, Ohio, plant, where it ceased operations July 8, 2024. That facility was converted into a distribution center, allowing the company to retail some of its workers for those operations.
The RTA line includes product produced and sold under brands such as Ameriwood, Novogratz, Cosco, Maxx & Finn and DHP Furniture to name several.
“The changes being implemented at Dorel represent some of the most significant in our over fifty-year history,” said Martin Schwartz, Dorel president and chief executive officer. “The decision to further reduce the size of the Home segment was not made lightly, considering our origins as an RTA manufacturer in North America and the impact on our numerous employees. However, it is the only feasible course of action to return to profitability. With the anticipated recovery of the Home segment in 2026, the sustained positive momentum at Dorel Juvenile, and new financing arrangements that will be in place, Dorel is establishing the path to return to profitability.”
The initiative follows many months of restructuring efforts aimed at bringing the Home segment back to profitability. Following the closure of the Tiffin, Ohio, plant last year, the company announced a further restructuring of its Home division in January, which included ceasing operations of its Quebec mattress manufacturing operations, downsizing its administrative workforce, plus reducing its number of SKUs and its overall distribution footprint.
In March, it announced another round of restructuring efforts, that would merge its sales, marketing and product development organization into its Cosco division. In a release issued Monday June 30, it said a limited number of high-performing Dorel Home import SKUs “will be transferred to the Cosco portfolio, focused on categories and customers driving the highest contribution with the least added complexity.”
“Cosco has delivered consistent earnings and positive cash flow within the Home segment since 2010, including the period in which it was led by Troy Franks, current CEO of Dorel Home,” the company said. “The organization is built on a market-driven, customer-centric approach that delivers innovative products with exceptional consumer value. For over 90 years, Cosco has been a trusted household brand known for reliable performance and quality.”
To help achieve profitability, the company also is consolidating certain Dorel Home back-office functions with its Juvenile North America operations based in Columbus, Indiana, which the company said “will provide further synergies for Dorel overall.”
The Home segment is also actively working on exiting product categories that are now considered non-core and also is working to significantly reduce inventory by the end of the year. This will also allow for the reduction of it current distribution footprint, which it said is now too large for the new streamlined Home operations.
“The company will be exiting from existing warehouses based on their scheduled lease termination dates this year,” officials said, adding that “For facilities with longer termination dates, the company is exploring sub-leasing opportunities which it is believed can be realized in the new year once the desired footprint is achieved.”
“The reduction in size and simplification of the Home segment will eliminate the negative cash flow from these operations and facilitate focus on the Juvenile segment which continues on its path of increasing sales and earnings,” the company said adding, “The segment’s global footprint, with market-leading divisions in Europe, Latin America and Australia, combined with domestic manufacturing operations in the United States makes Dorel Juvenile uniquely positioned in the industry to deliver above average earnings relative to its peers.”
Dorel expects the aforementioned changes will improve earnings by the fourth quarter of this year. It plans to provide details on the estimated cost and run-rate savings of these activities in its second quarter earnings release to be issued in August 2025.
