Major Furniture Brand Closes Canadian Plant, Shifts Operations to the U.S. – Impact and Analysis

Canadian Furniture Maker Prepac Shuts Down Original Plant, Relocates to US Amid Tariff Disputes and Economic Shifts

By archyde.com news Desk

Published: March 22, 2025

Prepac Moves Production South, Leaving Canadian Workers Behind

Prepac, a well-known manufacturer of ready-to-assemble furniture sold at major retailers across north America, including Walmart, Target, Amazon, Home Depot, and Lowe’s, has officially ceased manufacturing at itS original facility in Delta, British Columbia, on March 14, 2025. The company is currently winding down remaining operations, marking a significant shift in its production strategy and raising questions about the future of manufacturing in canada.

According to Unifor, the Canadian union representing the plant’s workers, all 170 employees are expected to be terminated by May 2025. This closure represents not only a loss of jobs but also a potential blow to the local economy. The move highlights the increasing challenges faced by Canadian manufacturers in a globalized market.

Tariffs and ‘Altered Economic Environment’ at the Heart of the Issue

Prepac, founded in 1979 and locally owned for many years, was acquired by Toronto-based private equity firm torquest in 2019. Subsequently, in 2021, the company opened a factory in North Carolina. Unifor asserts that all production is now being consolidated in the U.S.

The company has cited an altered economic environment as the primary reason for the closure. However, Unifor has placed blame squarely on tariffs imposed during the Trump administration, arguing that these policies have rendered Canadian production less competitive. This perspective highlights the ongoing debate about the impact of tariffs on international trade and domestic manufacturing.

“Prepac and its equity owners are using tariffs as an excuse to redirect all their production to the U.S.,”

Unifor National President Lana Payne

Payne’s statement underscores the union’s belief that the decision is driven by financial motives, labeling it pure greed. While the company has not explicitly confirmed that tariffs played a role,the timing of the relocation and the broader economic context suggest that trade policies are likely a contributing factor. Addressing potential counterarguments, some economists might argue that the relocation is simply a strategic business decision to optimize costs and improve efficiency, regardless of tariffs.

Union Calls for Boycott, Citing Abandonment of Canadian workers

in response to the plant closure and job losses, Unifor has called for a nationwide boycott of Prepac products. The union accuses the company of abandoning Canadian workers and consumers, urging shoppers to consider the impact of their purchasing decisions on domestic employment.The boycott could have a significant impact on Prepac’s sales in Canada,possibly affecting its bottom line and reputation. This call to action highlights the power of consumer activism and the importance of corporate social responsibility.

Wider industry Struggles: Bankruptcies and Store Closures on the Rise

Prepac’s closure comes amid a period of upheaval in the furniture industry. Public filings and company statements indicate that several retailers, including Conn’s HomePlus, Factory Mattress, and Metro Mattress, have recently filed for bankruptcy or shut down stores. These struggles are attributed to declining sales and operational challenges, reflecting broader economic trends and changing consumer habits.

The furniture industry, like many retail sectors, has been impacted by several factors:

• Increased competition from online retailers like Wayfair.
• Shifting consumer preferences towards sustainable and eco-pleasant products.
• Economic downturns that reduce consumer spending on big-ticket items like furniture.

Company	Action	Reason (Reported)
Conn’s HomePlus	Bankruptcy	Declining sales, operational challenges
Factory Mattress	Store Closures	Declining sales, operational challenges
Metro Mattress	Store Closures	Declining sales, operational challenges

The Future of Furniture Manufacturing in North America

Prepac’s decision raises vital questions about the future of furniture manufacturing in both Canada and the United States. Will other companies follow suit, relocating production to areas with lower labor costs or more favorable trade policies? What steps can governments and industry leaders take to support domestic manufacturing and protect jobs?

Some potential solutions include:

• Investing in workforce training programs to equip workers with the skills needed for modern manufacturing jobs.
• Offering tax incentives and other financial support to companies that invest in domestic production.
• Negotiating trade agreements that promote fair competition and protect domestic industries.

The Prepac situation serves as a cautionary tale about the complex interplay of economic forces, trade policies, and corporate decision-making. As the furniture industry continues to evolve, it will be crucial for stakeholders to work together to ensure a sustainable and equitable future for workers and consumers alike.

Copyright 2025 archyde.com.All rights reserved.

What policy changes, if any, do you think would be most effective in supporting Canadian manufacturing and protecting jobs in the long term?

Interview: Analyzing the Prepac Plant closure and its Impact on Canadian Furniture Manufacturing

Archyde News sits down with Dr. Eleanor vance, a leading economist specializing in manufacturing and international trade, to discuss the recent closure of Prepac’s Canadian plant and the broader implications for the furniture industry.

Archyde News: Dr. Vance, thank you for joining us. Can you start by providing yoru viewpoint on Prepac’s decision to shut down its Canadian facility and move operations to the U.S.?

dr. Vance: Certainly. Prepac’s move is a symptom of several converging trends. While the company cites “an altered economic environment,” likely alluding to tariffs and other trade barriers, we also see factors like labor costs, and a push for greater operational efficiency playing a role. The consolidation of production within the U.S., where they already have a factory, makes logistical and economic sense in many ways.

Tariffs and Trade: The Impact of Policy

archyde News: Unifor has pointed to tariffs as a major cause, and it seemed that the timing of the shift related to the trump management. How significant a factor do you believe trade policies, specifically tariffs, were in this decision?

Dr. Vance: Tariffs certainly add a hurdle. They increase the cost of importing raw materials or exporting finished products, making Canadian production less competitive. While it’s difficult to definitively say if tariffs were the *sole* driver, they likely tipped the scales, especially considering the company’s existing U.S. presence and the possibility of reducing costs further by consolidating production.

The Broader Furniture Industry Landscape

Archyde News: Beyond Prepac, the article mentions difficulties within the furniture industry, with bankruptcies and store closures. What are the larger forces at play here?

Dr. Vance: The furniture industry faces a number of challenges. Increased competition from online retailers,like Wayfair,has put pressure on pricing and profit margins. Consumer preferences are also evolving toward lasting and eco-friendly products, which can impact manufacturing processes and costs. Economic downturns also of course reduce consumer spending on big-ticket items like furniture.

The Future of Manufacturing: A Question of Policy and Action

Archyde News: What steps can governments and industry possibly take to support domestic manufacturing and to protect jobs in the face of these challenges?

Dr.Vance: There’s no single solution, but several strategies are viable. Investing in workforce training programs is critical to equipping workers with skills needed for modern manufacturing jobs, including automation, robotics, and sustainable practices. Secondly, targeted tax incentives and other financial support can encourage companies to maintain or increase domestic production. the negotiation of favorable trade agreements that promote fair competition is crucial. It’s a complex landscape, and all stakeholders must work together.

Archyde News: Dr.Vance, what do you believe is the single most significant factor to address to support Canadian manufacturing in the long term?

Dr. Vance: I believe fostering a culture of innovation and adaptation, while ensuring a skilled workforce, is critical to long term. This means investing in research and development, supporting the adoption of new technologies, and providing the necessary educational opportunities to equip Canadians for this changing landscape. But, what are your thoughts, our reader’s? What role would you like to see governments take to support Canadian manufacturing?

Archyde News: Thank you, Dr. Vance, for this insightful analysis. It’s clear that the Prepac closure is part of a larger trend, and the future of furniture manufacturing hinges on how we address these challenges.

Dr. Vance: My pleasure.