Furniture Company Will Leave South Bay For Mexican Factory

By AMANDA BRONSTAD

Staff Reporter

Douglas Furniture of California LLC has notified the state that it will lay off 165 employees and move a large portion of its manufacturing to Tijuana.

The 100-year-old furniture maker, which has been in Redondo Beach since 1977, manufactures dining sets and chairs at its 270,000-square-foot facility.

Harold Applebaum, co-president of Douglas Furniture, declined to elaborate on the details of the layoffs but said that cost-cutting measures have forced the company to gradually shift manufacturing to Tijuana, where it has a number of facilities.

“We’re in an industry where four large retailers file Chapter 11 in four years, and that has had an impact,” Applebaum said.

Those bankruptcies include Sears, Roebuck & Co.’s Home Life operation, Heilig-Meyers Co. and Levitz Furniture Inc., which emerged from bankruptcy last year.

Applebaum declined to say how many people the company currently employs.

Five years ago, the city swayed Douglas Furniture to keep manufacturing local by offering an incentive package that saved the company $500,000 a year. The package included employment training wages, equipment tax credits and energy savings.

“It’s difficult to compete with the labor costs across the border,” said City Manager Aaron Jones, “but we’ll do everything we can to support retaining the maximum number of jobs.”

Douglas was founded as Douglas Park Moving and Storage Co. near Douglas Park in Chicago. In 1977, the company purchased the Redondo Beach land and built the current facility. During the 1980s, Douglas Furniture leased and later built several facilities in Mexico.

Its headquarters moved to Redondo Beach in 1996, and the business was sold in 2000 to Norwest Equity Partners VII LP. Norwest Equity Partners executives declined to comment about any investments.

Douglas Furniture executives initially looked to Mexico as a way of expanding their facility by 7,000 square feet, but they remained in Redondo Beach due to the city’s retention efforts, Jones said. This time, the cost of labor and economic conditions forced the company to go forward with those plans.

“We were told it was a bottom line issue,” Jones said. “Certainly the state of the economy would be having some effect. But we’re looking to work with them further to once again help take advantage of any programs, and there are programs available.”