Norwalk Furniture halts operations

NORWALK, Ohio (AP) -- A deal to save a struggling furniture company fell apart, forcing the company to shut down factories in Ohio and Mississippi for the second time in two months.

A developer negotiating to buy Norwalk Furniture backed out of the deal, putting the company's future up in the air.

Norwalk Furniture has about 500 employees at its headquarters operation in Norwalk. About 200 workers at the Ohio factory were sent home Wednesday. It also has about 300 employees at a plant in Fulton, Miss.

Company chairman Jim Gerken said he hopes the layoffs will be temporary. "We will not be accepting orders until we have a credible, funded going-forward plan," a company statement said.

Stuart Lichter, a California developer who was negotiating the purchase along with two investment firms, said he was unable to get funding from a bank.

Norwalk Furniture's downward spiral started when its banking partner cut off its credit line in July.

Its 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.