SHERMAN, Miss. (AP) -- The planned February closing of the Bauhaus USA Inc. upholstered furniture plant here will cost 139 jobs, the latest setback for the area's troubled furniture industry.

Furniture maker and retailer La-Z-Boy announced last month it was going to cut 850 employees companywide, raising concerns then that the Bauhaus facility was in jeopardy.

Bauhaus is a division of Monroe, Mich.-based La-Z-Boy. The company announced Tuesday it would close the plant here on Feb. 7.

Al Wiygul, president of Bauhaus USA Inc., says the closing is due to economic conditions.

"Due to overall macroeconomics factors impacting discretionary furniture purchases, our order levels have decreased significantly over the past couple of months and it is necessary to right size our production capacity," Wiygul said. "We regret the impact the closure will have on the lives of the employees working in the Sherman operation."

The company said it plans to shift production from the Sherman plant to the Bauhaus plant in Saltillo. However, a spokeswoman said that would not include a transfer of most jobs.

The spokeswoman said as many as 15 jobs would move to the other plant. The Saltillo facility has about 225 employees.

Company officials would not comment on the future of other plants, including Saltillo.

La-Z-Boy, in a bid to shore up declining sales, announced in November that it would cut 10 percent of its employees and close 15-20 La-Z-Boy Furniture Galleries stores. The company also said it would cut its planned fiscal 2009 capital expenditures from about $27 million to $18 million-$20 million and would reduce operating expenses and inventories.

Company CEO and President Kurt Darrow said at the time that the furniture industry "is in the midst of an unprecedented downward spiral."

"While these decisions are difficult to make and we regret the impact they will have on those affected and their families, they are necessary to structure our company to operate more efficiently," Darrow said in an interview with Furniture Today.

The announcement by La-Z-Boy adds to a string of plant closings and cutbacks in northeast Mississippi. At least 2,600 layoffs have been officially announced since the start of the year, including at least 1,100 in the furniture industry alone.