MONTREAL — Despite achieving its best financial results in two years, Montreal-based Dorel Industries still suffered 2023 losses.

In an effort to turn the ledger from red to black, the company has embarked on a $4.5 million cost-cutting, restructuring plan that will include the layoff of 70 workers from its Dorel Home and Dorel Juvenile divisions and the combining of operating units.

The restructuring’s $4.5 million price tag is expected to return $6.5 million in savings spread throughout 2024. 

Dorel Home, manufacturers of bedroom and other furniture and furnishings for the home, cut 40 employees, which equates to about five percent of its North American total. Dorel Juvenile plans to lay off 30 workers or about 1 percent of that division’s workforce. 

"We basically restructured in a way where we've combined a couple of our operating units under one operating unit and reduced staff," CEO Martin Schwartz told analysts on a conference call Tuesday, March 12.

Dorel is an FDMC 300 listed company, ranking #19 in the list. In the 2023 fourth quarter and year-end earnings call for the period ended December 31, Schwartz said that while the company suffered overall losses in both its juvenile products division and its home furniture segment the future looks bright for both segments, especially the Dorel Juvenile segment.

Fourth quarter revenue from continuing operations was $350.7 million, up 3.1%, from $340.3 million a year ago. Reported net loss from continuing operations for the quarter was $3.8 million or compared to $41.4 million a year ago.

Revenue for the full year from continuing operations was $1.39 billion, down 11.6%, from $1.57 billion the previous year. Reported net loss from continuing operations was $62.4 million compared to $118.9 million a year ago. 

Schwartz said “We're very pleased with the continuing progress of Dorel Juvenile. Their string of quarter-over-quarter earnings improvement has maintained throughout the past year. In fact, the recent fourth quarter was the best quarter since 2017. And the metrics tell the story. Market share increased again in our major markets, year over year revenues for 2023 grew 2.4%. The way it changed and adjusted earnings turnaround of almost 59 million. We are well on our way to getting juvenile back on a solid footing.” 

However, Dorel Home’s fourth quarter and year-end results were even more disappointing as the furniture market did not rebound as anticipated. 

Turning to the Dorel Home segment, Schwartz said the current economic environment continues to constrain consumer spending on home furnishing. This was particularly the case in December when the market did not rebound as expected, and, as a result, neither did Dorel Home sales.
 
He said that the housing market’s struggles have hurt the economy. “While consumer sales in general were flat, sales of furniture in particular decreased seven and a half percent,” he said. “Thirty percent of furniture sold is based on people moving, but with high interest rates most are staying put. In 2023, we saw the fewest numbers of moves in the ‘states’ since the US government began tracking the data back in the 1940s. Home affordability hit historic lows last summer while interest rates were the highest since 2022.”

At Dorel Home, there is continuing traction at brick-and-mortar, as our focus on that channel is paying off and we expect further improvements. Offsetting this are industry challenges in e-commerce, which is dampening sales overall. Nonetheless, we remain convinced we are heading for a turnaround and expect improvements in 2024. This still depends on overall health of the furniture industry. We will continue to seek lower costs through our restructuring plan athe nd coupled with innovative new products, we believe we will deliver the turnaround at Dorel Home as we did this past year at Juvenile.”