Swedish home furnishing retailer Ikea has announced plans to close its manufacturing plant in Danville, Virginia, US.
The closure is planned to take place in December this year and is the retailer’s only US factory.
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This move follows an announcement, made by the retailer in November last year, to cut 7,500 jobs in a restructuring effort, according to media sources.
The company also laid off 90 employees at the Danville facility in December last year.
According to Ikea, production costs are high at the Danville facility, when compared to operations in Europe.
Ikea Danville plant site manager Bert Eades told The Wall Street Journal: “We made every effort to improve and maintain the competitiveness of this plant, but unfortunately, the right cost conditions are not in place to continue production in Danville, Virginia for the long-term.”
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By GlobalDataThe company also noted that it will transfer the plant’s production to existing facilities in Europe. This is expected to result in more affordable furniture products in North America.
Established in 2008, the Danville Ikea Industry production unit produces wood-based furniture for Ikea stores in the US and Canada.
The retailer currently has 300 associates working at the plant.
Eades added: “We will do everything we can in the coming months to support our co-workers through this change, as they look for new jobs and training opportunities.”
