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Bank Could Force Furniture Maker To Shutdown

Norwalk Furniture was caught off-guard when its bank said its credit was being cut off and that it had to pay its loan immediately, a company spokesman said.

NORWALK, Ohio (AP) -- It's no surprise the housing slump and cheap imports have hurt sales at a high-end furniture maker that's been in business for more than a century.

What caught Norwalk Furniture management off guard and forced them to suspended operations at plants in Ohio, Tennessee, and Mississippi, was a call from their bank last Friday, said company spokesman Joe Mosbrook.

Officials from Dallas-based Comerica told Norwalk Furniture it was cutting off its credit and that it had to pay its loan immediately, Mosbrook said.

"It was completely out of the blue," he said.

Now Comerica is deciding whether to find a new buyer for the company or force it to shut permanently and sell off its assets, said Domenic Aversa, acting president of Norwalk Furniture.

Closing the company would put at least 2,000 people out of work, he said.

The company has about 500 people at its factory and headquarters in Norwalk, where it has been since 1919. Another 50 people work at its plant in Cookeville, Tenn., and 300 at its factory in Fulton, Miss.

There also are truck drivers and sales people at 57 retail stores.

The furniture maker now has an $11 million debt.

Comerica could negotiate a sale with investor groups that the company says are already interested, which would allow the furniture maker to continue operations.

"It would be a somewhat smaller business but one we have shown can generate a positive cash flow and, more importantly, provide jobs for hundreds of people and furniture for thousands of customers," Aversa said.

Comerica spokeswoman Sara Snyder declined to comment Thursday on the bank's plans, saying client relationships are private.

Norwalk Furniture's products are sold under the trade names Norwalk, J. Raymond, Joe Ruggiero Collection, and Hickory Hill. It has retail stores in the United States and Canada.

Workers say what's hurt is the long housing slump, the economy and overseas imports.

"We make good furniture and it's expensive furniture," said Shirley Pelham, who retired after 43 years at the Ohio plant. "People are having trouble buying anything with gas the way it is, food, just everything.

"I'm really worried -- not for myself, for the whole area," she said.

The biggest impact will be felt in this northern Ohio town where the company is the largest manufacturer.

Several hundred workers there gathered Wednesday to find out about job services and training in case work doesn't resume.

"This is the second time something like this has happened to me," said Judy Harp, who has spent 22 years at the furniture maker. "It's harder this time. When you get older, and you put that many years in."

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