HIGH POINT, N.C. — April 24, 2025 — Culp, Inc., a provider of fabrics for bedding and upholstery fabrics for residential and commercial furniture, today announced the strategic transformation of its operating model to further position the Company for flexibility and growth.
The Company will combine its two stand-alone operating divisions, Culp Upholstery Fabrics and Culp Home Fashions, into a single, integrated business designed to optimize operational agility and collaboration, further streamline costs and processes across its business, and, most importantly, increase responsiveness to customer needs and market trends.
As an initial step in this integration, the Company will close the leased facility operated by its upholstery fabrics division in Burlington, North Carolina, and transition the production and distribution activities there to a shared management model within the Company-owned facility in Stokesdale, North Carolina, currently operated by its mattress fabric division.
The Company expects to generate annualized efficiency improvements and cost reduction benefits of approximately $3 million after completion of the Burlington facility closure and other integration initiatives, with the potential for additional savings going forward. This is incremental to the approximately $10 to $11 million in annualized savings and operating improvements expected from the recent completion of the Company’s cost restructuring plan announced in May of 2024, which was focused primarily on the mattress fabrics division.
That restructuring project included the consolidation of sewn cover operations, outsourcing of certain knitting and damask weaving production, and closure of the Company’s manufacturing facility in Canada and transfer of those operations and the associated equipment to its Stokesdale, North Carolina, facility, among other actions.
The final step in that project, the sale of the Company’s Canadian facility, is currently expected to close within the next week, and the Company intends to use the cash proceeds to retire outstanding borrowings as part of its broader plan to improve financial flexibility and position the business for long-term success.
Iv Culp, President and Chief Executive Officer of Culp, Inc., commented, “I’m proud of the work our team is doing to transform our business and excited about this next chapter in CULP’s over 50-year history. As we executed on our restructuring project, it became apparent that our two core businesses have evolved to a point where we can be more efficient and better serve our customers if we combine into one CULP-branded business.
“We see a variety of opportunities to create synergies through a more centralized and cross-functional operating model coupled with a unified management team focused on the home furnishings industry holistically and unencumbered by product, customer, or market-specific boundaries. We believe this will create a stronger and more nimble CULP organization ready to maximize the collective talent and resources of both of our legacy divisions. In an uncertain macroeconomic environment, this more streamlined approach positions us to succeed across a range of demand scenarios.”
“This is a substantial undertaking that involves some facility consolidation, equipment relocation, and other operational adjustments, but no curtailment of production levels. Most importantly, it affects people and naturally involves some employment loss. While those are always difficult decisions, they also represent an inflection point for our company. We remain deeply grateful to the affected team members in Burlington and thank them for their dedication and contributions. We are committed to helping them make the best possible transition.
Posted: April 24, 2025
Source: Culp, Inc.
