Officials with 87-year-old Key City Furniture Co. in Wilkesboro announced Friday that the upholstered furniture manufacturer was permanently closing that day, ending the jobs of 97 employees.

Key City employees, many with the company for 10, 20 or more years, were informed about the closure in multiple meetings from late morning through early afternoon at the company’s headquarters and furniture manufacturing plant on N.C. 268 West.

A Key City spokesman, who declined to be identified, said the closure resulted from long-term difficult economic conditions, which he said were reflected in a lack of orders for the company’s upholstered furniture.

The decision to close was made less than a week before it occurred, said the spokesman. A company with at least 100 employees must give at least a 60-day notice before closing.

Key City officials said they plan to apply for Trade Adjustment Assistance (TAA) status, which makes workforce training, education and other services available for employees who lost their jobs.

Most of the 97 people who lost their jobs will also be eligible for unemployment insurance benefits, which were reduced as of June 30.

Meanwhile, said the spokesman, there are plans to sell Key City’s remaining inventory and equipment. The building on N.C. 268 West is leased from a local owner.

Key City’s business remained strong amid economic ups and downs through the 1970s, 1980s and 1990s, said the spokesman. Key City employed about 240 people about 10 years ago.

In 2003, Key City moved its offices and most manufacturing from downtown North Wilkesboro to the former Ithaca Industries textile manufacturing facility on N.C. 268 West to increase efficiency and help the company meet strong demand.

The spokesman said the economic downturn started within six months after Key City moved to the 240,000-square-foot facility and retailers started buying less furniture from the privately-owned company.

Many of the retailers that sold upscale Key City upholstered furniture closed in recent years. Stock market problems reduced demand among upper income buyers of Key City’s products.

The spokesman said various endeavors since 2003 produced positive results, but something would always happen to set the company back.

These undertakings included producing private label furniture for other well-known companies, sales in China and other countries and, most recently, acquisition of North Wilkesboro-based Greene Brothers Furniture in late 2012 to add lower-priced upholstered furniture to its offerings.

Key City emphasized fast turnaround for custom furniture manufacturing in recent years.

The spokesman said Key City couldn’t have remained open as long as it has without the substantial financial support of the owners and work of loyal and skilled employees. “The owners shored up the company in the last four or five years,” he said.

“Since 2008, we have ratcheted down six times with layoffs and wage reductions and we’ve reduced our footprint (occupancy) in this building to try to make it out of this recession,” he added, with the most recent cutbacks coming two months ago. The company had 175 employees before these cutbacks started.

The spokesman said Wilkesboro, North Wilkesboro and Wilkes County officials, as well as Wilkes Economic Development Corp. (EDC) officials have been highly supportive of the company over the years.

The EDC awarded Key City a $35,000 grant in late January to assist with improvements to the facility on N.C. 268 West. EDC President Jeff Garstka said Key City already fulfilled its obligation for receiving the funds, which was to provide a least 95 jobs at least until June 30.

In late April, Key City was awarded a $40,000 grant from the N.C. Rural Economic Development Center for building improvements totaling $150,000. The improvements were to facilitate moving finishing work from the Key City’s building in North Wilkesboro to the facility on N.C. 268 West.

The grant was put on hold before all of the funds were awarded due to uncertainty over continued state funding of the Rural Center, said the Key City spokesman.

In 2009, Key City received a $25,000 federal grant to pay for lean manufacturing training through North Carolina State University.

Key City, owned by grandchildren of company founder James E. Caudill, was one of only two remaining furniture manufacturers in Wilkes.

The one remaining furniture manufacturer now is Johnston Casuals in North Wilkesboro, which makes contemporary, metal furniture.

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