Breaking news: Crib maker Munire shutters Echelon plant, declares bankruptcy. New Jersey based crib manufacturer Munire Furniture shuttered its Indiana factory on Friday, putting 100 workers out of a job and ending an ambitious experiment to move nursery furniture back to the U.S. To protect the parent company from the debts incurred by the Indiana operation, Munire Furniture filed for bankruptcy protection yet said it is continuing to ship orders as scheduled next week.
In a letter to dealers distributed today, Munire said:
After almost four years of investing an inordinate amount of our resources into what we hoped to have been a successful rebirth of USA manufacturing, we are saddened to have had to take the extreme decision to close the Echelon factory. We realized this was the only remaining option to free the healthier divisions of our company from having to bear the burden of its losses. Finally, the weak link in our supply chain has been removed.
The Echelon factory in Gas City Indiana was launched with great fanfare in 2010. Munire received several tax incentives to locate the plan in Indiana, including $1.35 million in tax credits, $20,000 in training grants and another $2.5 million loan in the form of economic revenue bonds issued by Gas City. The company also received $3.6 million in property tax breaks. During the past summer, when it appeared the factory was struggling, Gas City arranged for another $1 million loan.
Despite the large government subsidies, Munire told us the factory struggled to turn out product at a competitive price. Cribs from the Indiana factory had a $500 wholesale price—that means they’d be $1000 or more at retail. Simply put, there weren’t enough buyers of $1000 cribs in the market that last three years, as the economy remained sluggish.
Munire shifted gears in the past year and lowered crib prices, hoping to make up more profit with increased volume. But the volume never materialized. The Indiana factory never accounted for more than 10% of Munire’s furniture sales (the rest of the furniture is imported from Asia).
When it became clear the Indiana factory was draining Munire’s finances, the company decided the only course was to close the plant and declare bankruptcy. Munire filed for Chapter 11, which means the company will attempt to reorganize its finances and emerge without the Indiana debts. The company tells Baby Bargains they are shipping product next week as scheduled; the bankruptcy should not affect the company’s ability to ship product in the near term. ‘
The final resolution, however, is with the bankruptcy court. We will monitor the situation and give the latest news as we get it.
2014 has been a tough year for luxury crib makers. Stanley shuttered its Young America nursery furniture division in July, citing heaving losses selling upper-end cribs and furniture. Two other crib companies (Boori, Creations) targeting the upper-end nursery market also closed in the past year.
The continuing decline of independent baby stores has hurt furniture makers (Young America was exclusively sold in boutiques). Even though Munire is sold in Babies R Us (as Baby Cache) and Buy Buy Baby, Echelon furniture was aimed at the dwindling number of independents. The initial pitch for Echelon was its “Made in America” pedigree and short shipping times (imported furniture takes longer to special order and ship). FYI: The Indian factory also made some of the Baby Cache furniture for Babies R Us; and the “Jefferson” collection (under the Munire label) for Buy Buy Baby.
The company is also to blame for the Echelon woes—Munire first marketed the furniture was Made in America, but then later added imported furniture from Asia under the Echelon name. This muddied the brand’s reputation in the market, as buyers couldn’t be exactly sure which collections were made where.
A source at Munire also tells Baby Bargains that the workforce in Indiana was also a contributing factor in the factory closure—heavy turnover at the planet contributed to soaring costs.
“We have strong indications that the reorganization plan we are working with our financial backers will quickly restore a healthy flow of product and in so doing a back to normal status,” Robert Omansky, Munire’s National Sales Director, said.
If you have an outstanding order form Munire or Echelon, we would contact your dealer to see if the bankruptcy will affect your order. And feel free to comment below on what you hear.
Final word of advice: if you are considering a Munire, Echelon or Baby Cache furniture and those items are in stock at a store, then it is fine to purchase. If you have to special order an item, we would wait and see how the bankruptcy affects Munire’s shipping. We will update this thread as we get more info.