NC community in shock, seeking answers after furniture maker’s abrupt closure

Driving north on N.C. 16 into Alexander County among the pastoral views dotted with homes, churches and small businesses is a Mitchell Gold + Bob Williams billboard advertising careers at the home furnishings company. It says: “We Love What We Do. You Will Too!”

But on Aug. 26, the 533 employees of the furniture company working at the Taylorsville, Hiddenite and Statesville facilities learned they no longer had jobs.

“It was just out of nowhere,” said Darius Spratt, who worked for MG+BW for seven years. “Before you know it, it was on Facebook saying Mitchell Gold shut down, you are not to enter the property.”

The abrupt companywide closure sent shock waves across the state, felt hardest in Taylorsville, a town an hour north of Charlotte with about 2,320 residents where MG+BW had been headquartered for 34 years.

“The abruptness and closure, it was gloomy here Monday,” said Bo Coley, owner of Ideal Frame in Taylorsville. “It’s affected more than just people who worked at Mitchell Gold. Everyone knew someone who’s been impacted by it.”

Norma Lyda of Taylorsville said Friday, Sept. 1, during lunchtime at Hollar’s Backstreet Grill: “It upsets me to know they would shut the doors and not let employees know.”

Days after the closure, the county had partnered with several agencies to support the displaced workers while the community still reels in shock.

“The whole town was surprised,” Adam Dula, co-owner of Apple City BBQ restaurant about 5 miles from the plant said on Friday, Sept. 1. “They were still advertising and hiring a week ago.”

‘Hey, we’re jobless. Did you hear?’

On Wednesday, Aug. 30, Jacob Ramirez was riding his bicycle back from town after he filed for unemployment. Stopping outside the Taylorsville plant off Millersville Road, he said, “It’s a shame what happened.”

Ramirez, worked for MG+BW for four months in base assembly. He said there are still couches and chairs without bases and several back orders inside.

Like others, Ramirez learned about the closing from co-workers and social media that spread throughout the community before he saw an email from MG+BW. “Hey, we’re jobless. Did you hear?” Ramirez said a friend texted on Saturday morning.

Just two days before, “they had told us we may be getting more hours (next week) so the shutdown, all of a sudden, was just like what the heck happened,” the 21-year-old said.

Joseph Cannon, 33, of nearby Stony Point, worked as a truck driver for MG+BW for five months. After years of being on the road for his trucking career, he was happy to be driving locally. His income helped support his mother, brother and nephew, he said.

“When I was young, (Mitchell Gold) was the place to go work. You had to know somebody to get in the door and then you stayed there until you retired,” Cannon said. “It was just hard to believe they didn’t say anything, didn’t have a meeting and just shut the doors.”

The closing sign

MG+BW posted a sign on the closed gate at the Taylorsville facility on Saturday, Aug. 26, that said the company had recently and unexpectedly learned it was unable to continue business operations.

Employees were told not to report to work Monday, Aug. 28.

The company was unable to secure financing to continue operations as the furniture industry has had “significant challenges,” MG+BW CEO Chris Moye said in a letter to employees and the WARN notice to the state.

MG+BW had more than 700 employees, including in retail stores throughout the U.S. and Canada, according to the company’s website. The stores appear closed and an error message pops up when trying to order on the company’s website.

Officials with MG+BW did not reply to requests for comment.

In 2015, MG+BW was acquired by family-owned private investment firm The Stephens Group, based in Little Rock, Arkansas.

In The Stephens Group’s reply to The Charlotte Observer asking what happened with financing that caused the sudden closure, among other questions, the firm said: “We are not in the position to address specific questions about its business operations and do not have any information on individual orders.”

The Stephens Group has other ties to iconic North Carolina companies.

The firm’s investment portfolio includes Conn’s, the Texas-based home goods retailer that partners with the Charlotte-based Belk department store chain, and Westrock Coffee, which rebranded S&D Coffee & Tea, a major employer in Cabarrus County for nearly a century, according to Stephens Group’s website.

Bankruptcy filings

Both Mitchell Gold and The Stephens Group have filed for Chapter 11 bankruptcy in federal court.

On Aug. 31, The Stephens Group, under limited liability company SG-TMGC, filed with up to $50,000 in assets and $10 million to $50 million in liabilities, the voluntary petition filed in Wilmington, Delaware, court showed.

The Stephens Group told The Charlotte Observer it had recently invested $20 million to restructure the company.

“Unfortunately, shortly after this restructuring, the company’s lender withdrew its support, forcing Mitchell Gold + Bob Williams to cease operations,” the firm said in its statement.

On Wednesday, Mitchell Gold Co. filed for bankruptcy, listing $10 million to $50 million in both assets and liabilities. The estimated number of creditors is 200 to 999, court documents show.

Mitchell Gold’s lender, PNC Bank, said “it will not commit to fund the company’s operations, as a going concern or for an orderly sale or liquidation despite repeated requests,” the filing states.

Following PNC’ denial of funding, Mitchell Gold stopped accepting customer deposits and online orders the morning of Aug. 25, the court filing states. All of Mitchell Gold’s stores, distribution centers, outlets and factories’ last day of operation also was Aug. 25.

‘Absolutely no warning’

Like MG+BW employees and management, Alexander County had “absolutely no warning,” said county commissioner Marty Pennell, who previously worked in the furniture industry.

MG+BW was the second largest industrial employer in Alexander County, behind Craftmaster Furniture, in business since 1972. This was the largest and most abrupt layoff at one time in the county that Pennell knows of.

The county quickly partnered with agencies including NCWorks, Western Piedmont Council of Government, Western Piedmont Workforce Development Board and the Department of Social Services to help the affected employees.

By Tuesday, Aug. 29, NCWorks Career Center was set up at CVCC Alexander Applied Technologies Center, followed by DSS a day later.

“Even our sheriff’s department has been involved to help employees get their tools from the manufacturing plant,” Pennell said.

The county also urged other businesses to share job opportunities, evidenced by the signs posted across MG+BW plant’s front entrance, along with the company’s leftover “Now Hiring” sign.

“We have an outpouring of different manufacturers and industries in our county currently that are going to social media and marketing to pull these folks in,” Pennell said.

Ripple effect of MG+BW layoffs

MG+BW’s closing will affect its workers and others in the weeks to come.

“You’re not only affecting those families but you’re affecting the supply chain vendors,” Pennell said.

Suppliers like Ideal Frame on Fifth Avenue, just down the road from the tech center, were blindsided by MG+BW’s closure, too.

The furniture frame shop had just received an order from MG+BW. But “24 hours later, I learned of the closure,” owner Coley said. The following Monday, Aug. 28, as that order went into the trash, Ideal Frame had its own layoffs.

“They were a big part of our business,” Coley said. He declined to say how many employees were laid off but said Ideal Frame had about 25 workers.

“We’re down to a core group of people,” Coley said. “They were a great customer and we worked really well together, and I appreciate everything they did.”

On Wednesday, Aug. 30, staple guns, routers and sanders were running in the shop with orders going out the door. Coley said his customers are stepping up to help and he’s actively seeking more business.

“There’s still a lot of great furniture makers in the area who are really going strong,” Coley said.

‘Shocked’ and seeking answers

Taylorsville residents and MG+BW employees are running a mix of emotions, from sad to confused to angry.

“I think a lot of people are still in shock,” said Myron Dula, co-owner of Apple City BBQ, about 5 miles west of the Taylorsville MG+BW facility. Dula retired three years ago after 38 years working in logistics for Bernhardt furniture company in Hickory. “No one saw it coming.”

To the community, MG+BW seemed stable.

“I always thought they were booming,” said Eddie Hollar, owner of Hollar’s Backstreet Grill in downtown Taylorsville.

Everyone in town is talking about how the closing happened so suddenly. A lawsuit filed in federal court Aug. 28 by one employee and on behalf of others against The Mitchell Gold Co. claims the company failed to provide the required 60-day written notice of termination required by the WARN Act. The lawsuit seeks unpaid wages and benefits coverage.

“That’s the thing everybody’s in an uproar about,” former MG+BW driver Cannon said. “And nobody wants to tell us why.”

Mitchell Gold, co-founder of the company, provided a bit more insight on his Facebook page, saying: “The deterioration of the business started in earnest a couple of years ago while I was retired but in the last month it VERY quickly spiraled out of control with PNC bank and owners, The Stephens Group.”

He went on to say, “The owners as well as me are feverishly working on a good solution. I’ll communicate more later as I know and can share.”

N.C. furniture industry outlook

MG+BW isn’t the only furniture company to shut down citing failure to secure financing.

Also last month, Klaussner Furniture Industries in Asheboro laid off 884 workers at seven Asheboro facilities because the company’s lending source “unexpectedly refused to continue to fund” operations, CEO David Cybulski said in the WARN notice to the state dated Aug. 7. All of the sites were closed two weeks later on Aug. 21.

Klaussner had operated in Randolph County for 60 years.

Despite those high-profile troubles, state officials like Felicia Culbreath-Setzer, NCWorks regional operations director for the northwest zone, said North Carolina remains “the furniture capital of the world.”

Next month, the world’s largest furniture industry trade show is expected to bring more than 75,000 people to High Point. The High Point Market, also held in April, has an economic impact of over $6.7 billion, according to a 2019 study by The Global Value Chains Center at Duke University. That’s greater than four Super Bowls, the study said.

North Carolina has the nation’s largest furniture manufacturer workforce with over 35,000 employees, according to the N.C. Department of Commerce.

The state also has the largest furniture store in the world, Furnitureland South in Jamestown, and the largest furniture manufacturer in the world, Ashley Furniture, according to Economic Development Partnership of North Carolina.

“Furniture is not a fleeting thing,” Culbreath-Setzer said.

However, last year, Ashley Furniture cut 110 jobs when it closed its Statesville plant to consolidate operations at its manufacturing plant in Advance.

Culbreath-Setzer said MG+BW’s closing was “traumatic for everyone.” But, she said, there are other jobs in the furniture industry in Alexander County and surrounding areas, as well as other industries such as plastics, fiber optics and health care.

A job fair will be held Sept. 12 with companies from Alexander and surrounding counties.

“Whatever their goals are, whether that be to stay in furniture or use this time to look at a new career pathway, that’s what NCWorks is here to support,” said Charity Patterson Hamber, director of workforce development for Western Piedmont Council of Governments.

‘A door closes’

At Hollar’s restaurant on Friday, Sept. 1, having worked in upholstery for 25 years, Hollar believes many MG+BW workers will find work at nearby furniture companies. “If you have experience in upholstery, you should find a job pretty easily,” he said.

Adam Dula at Apple City BBQ, which often saw lunch orders from MG+BW and even occasional visits from Mitchell Gold himself, expects his business could see a slow down.

“In this economy, there’s still work available in the area,” Dula said, “but I don’t know that there’s that many jobs in Taylorsville.

“The only thing we know to do for them is pray,” he said.

Former MG+BW employee Darius Spratt has a plan and a positive attitude.

“I can’t use energy to be mad at the company, because I know they didn’t want to shut down,” he said of MG+BW on Aug. 30, standing outside the tech center.

The 27-year-old father of two wants to use the skills he’s learned at MG+BW to learn upholstery at the furniture academy. “Sometimes a door closes so another one can open,” he said.