Sunbeam Corp. plans to sell its plastic furniture business in a companywide restructuring. It will, however, keep running its large, consumer products injection molding plant. The Fort Lauderdale, Fla., firm plans to save $225 million annually by a consolidation that will shed 18 of its 26 production plants. It will collapse its current divisional and regional headquarters into a new worldwide office based in Delray Beach, Fla., and cut 87 percent of its 10,000 stock-keeping units. Employment will be cut in half to 6,000.
Sunbeam said it will put on the block several noncore businesses, including its plastic, wood and metal furniture business. It became a major in resin furniture in 1994 when it bought Rubbermaid Inc.'s casual outdoor furniture unit. Its chief plastic furniture plant in Stanley, N.C., was part of the $25 million Rubbermaid deal.
The decision to exit resin furniture confirmed rumors sparked by the recent appointment of Albert Dunlap as Sunbeam's chairman and CEO. Dubbed ``Chainsaw Al'' by some analysts, Dunlap has a reputation for ruthless cost cutting. Furniture competitors speculated Dunlap would take the ax to Sunbeam's resin furniture, which slugs it out in a competitive, low-profit market.
Sunbeam furniture officials were unavailable to comment on the size of their business. It accounted for less than half of Sunbeam's Outdoor Products division's $350 million in sales in 1994. That year Rubbermaid claimed its resin furniture unit had sales of about $40 million.
An official with Bemis Manufacturing Co.'s casual furniture division said Sunbeam invested heavily in its resin furniture business and seemed to have done well at the distributor level in 1996. Sunbeam announced last spring it bought three Hemscheidt injection presses to make lawn and garden furniture at Stanley.
Phillipe Ubaghs, Bemis Manufacturing's vice president of sales and marketing, would not comment on whether his firm is interested in buying Sunbeam's furniture business. He doubted any existing furniture company would want to buy all of the business because of a likely hefty price tag. Resin furniture might not be the most attractive part because it probably suffers from low margins, Ubaghs said by telephone from Sheboygan Falls, Wis.
Sunbeam's consumer products injection molding facility in Hattiesburg, Miss., will survive Dunlap's ax. When it opened in May 1995 it was hailed as the company's flagship plant. Built at a cost of nearly $70 million, the 720,000-square-foot facility houses about 100 Cincinnati Milacron presses.
Rumors about problems plaguing the plant have flown around Mississippi's plastics industry faster than a Concorde jet. Sunbeam has admitted in corporate reports that Hattiesburg has been a drag on financial results because it is running below capacity, despite the fact that it supplies molded components to many of the firm's other U.S. facilities, and to maquiladora plants in Matamoras and Acuna, Mexico, and Mexico City.
Hattiesburg should pick up more work as Sunbeam shrinks its manufacturing operations to four factories in the United States and four offshore. A plant in McMinnville, Tenn., which has a small injection molding and thermoset molding operation, is slated to remain open.
Core Sunbeam businesses are kitchen appliances, personal-care and comfort, health-care, outdoor cooking and professional care, the company said in a news release.
Dunlap said Nov. 12 his goal is ``to essentially complete restructuring initiatives within the next 45 days.''
The firm recently announced that it finalized a new, five-year $500 million credit facility with 15 banks led by Chase Bank to provide Sunbeam with flexibility to restructure and expand.
Its third-quarter loss was the first time Sunbeam's results slipped into the red since it went public.