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Category: Manufacturing

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Simmons to open Victorville furniture factory, start hiring in October

Stirling Capital Investments UFI Facility Cropped Hiring and manufacturing will begin shortly at a new plant in Victorville, where Simmons sofas and other home furnishings will be made.

Simmons’ parent company, United Furniture Industries, has signed a lease for more than 500,000 square feet of space at the Southern California Logistics Centre, a former military base near U.S. 395 and the 15 Freeway that is being turned into a freight transportation hub.

The price of the nine-year lease was not disclosed, but real estate experts familiar with San Bernardino County industrial properties valued the deal at about $16 million.

United Furniture, which is based in Okolona, Miss., said the Victorville manufacturing and distribution center will serve Southern California and other markets in the West.

The company will hire more than 100 workers starting in October and expand the staff to about 400 within the next three or four years, spokesman Bob Cottam said. Recruitment will begin with a local job fair next month.

“UFI has a history of making every effort possible to procure goods and services in the local communities where we have a manufacturing presence,” Cottam said. “We are excited about the prospects for our success in the Western United States and this new facility in the California High Desert.”

United Furniture’s other manufacturing centers are in Mississippi and North Carolina. Southern California Logistics Centre, which includes airplane runways and rail connections, is being developed on 2,500 acres of the former George Air Force Base by landlord Stirling Capital Investments.

Other businesses there include Rubbermaid, General Electric, Pratt & Whitney, FedEx, Goodyear Tire & Rubber Co. and M&M/Mars.

Texas-based Dr. Pepper Snapple Group Inc. opened a plant there last year to bottle beverages such as 7UP, A&W root beer, Sunkist orange soda and Hawaiian Punch.

After United Furniture moves in, Victorville’s industrial property vacancy rate will fall to 7%, a big drop from more than 30% in early 2009, according to brokerage Cushman & Wakefield.

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-- Roger Vincent

Photo: United Furniture Industries future home in Victorville.  Credit: Stirling Capital Investments

Jakks Pacific receives takeover bid from Oaktree Capital

Jakks Pacific Inc., the Malibu toy maker, has received a $544-million takeover bid from Oaktree Capital Management after the Los Angeles buyout firm failed to work out a friendly deal with the company.

In a letter to Jakks' board Tuesday, Oaktree made an offer to take Jakks private for $20 a share in cash, a 25% premium on the toy maker's closing stock price of $16 that day. The company said it had been trying to work out a deal with the company since March; Oaktree Funds owns about 4.9% of Jakks already, according to the Associated Press.

Jakks Jakks' Chief Executive Stephen Berman responded to the investment firm in a letter Wednesday, saying the company would "carefully consider your indication of interest ... and will continue to act in the best interests of the company and its shareholders."

Jakks, one of the top five U.S. toy companies, designs and markets action figures, electronics, dolls, costumes and stuffed animals and is a licensee of major brands including Disney, Nickelodeon, Cabbage Patch Kids, Hello Kitty and Pokemon. It was founded in 1995 and went public a year later.

In an interview with The Times last week, Chief Financial Officer Joel Bennett said the company had 725 employees, 400 of them in the U.S. Jakks last year reported revenue of $748 million. 

A call to a Jakks spokeswoman was not returned early Wednesday. Shares of Jakks rose $3.78, or 23.6%, to $19.78 at 9 a.m. Pacific time.

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-- Andrea Chang

California solar panel manufacturer ceases operations

Clip_image001 The California solar panel manufacturer that received a high profile $535 million Energy Department loan guarantee announced today that it was ceasing operations, laying off 1,100 workers and will file for bankruptcy in the coming days.

Fremont-based Solyndra said that it had been rocked by stifling global economic conditions and a slow recovery from the great recession. It had also faced heavy competition from Chinese firms that were undercutting it on costs.

The company's website had not been updated to reflect the development. A terse voice mail announcement on one of Solyndra's contact information telephones said only the following: "Solyndra announced today in a press release that it has ceased operations and intends to file for chapter 11 bankruptcy protection," advising customers on how to contact the company for further information.

It was quite a fall from late May 2010, when the company hosted the president on a factory tour. Company officials announced then that they expected to be adding new employees. But in July of this year, the company was being grilled on Capitol Hill by House Republicans who said that there were indications that the company was in a weak financial condition and wasn't a good choice for the loan program.

Solyndra would become the third such company to file for bankruptcy in recent days. Spectrawatt Inc. of Hopewell Junction, N.Y., filed for Chapter 11 bankruptcy on Aug. 19. Evergreen Solar Inc. of Marlboro, Mass., filed for Chapter 11 bankruptcy on Aug. 15.

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Surfer files product liability lawsuit against Channel Islands

Kellyslaterphoto 
Surfboard manufacturers have a number of concerns -- heavy competition, expensive shipping and employees who occasionally like to slip out early when there’s a good break.

Product-liability lawsuits typically aren’t one of their worries.

That’s what makes a lawsuit that recreational surfer Tom Gregg filed against Channel Islands Surfboards a little unusual.

Gregg contends that a fin on his Channel Islands board cut a “deep gash” on his right leg when he wiped out off the coast of France in 2009. He said the fin severed muscles in his leg and caused injuries so severe that he will never regain full muscle strength in the injured leg.

“The surfboard, fins and their component parts were unsafe for their intended use,” Gregg said in the lawsuit, filed Wednesday in Los Angeles County Superior Court.

Scott Anderson, general manager of Carpinteria-based Channel Islands, said it’s the first product-liability lawsuit filed against the company that he’s heard about. “I’ve been here 20 years and I haven’t seen one,” he said.

Anderson declined further comment.

Gregg’s attorney, Jeffrey Karpel, said the fins are so sharp some surfers cover them with protective sleeves. Gregg was not aware of that before the injury, Karpel said.

Channel Islands, acquired by snowboard company Burton Corp. in 2006, is one of the world’s largest surfboard manufacturers. Its boards are sold in more than 400 stores around the world, Anderson said.

The company sponsors 10-time world champion surfer Kelly Slater, perhaps the best-known surfer in the world.

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-- Stuart Pfeifer

Photo: Kelly Slater at the 2010 U.S. Open of Surfing in Huntington Beach. Credit: Allen J. Schaben/Los Angeles Times

Aircraft and autos drive up demand for U.S. factory goods

Durable Demand for aircraft and autos helped push up orders for long-lasting manufacturered items 4% in July from the month before, the U.S. Census Bureau said Wednesday.

The semblance of promising news buoyed the stock market in morning trading.

In the largest increase since March, overall orders for so-called durable goods -- products expected to last at least three years -- rose to $201.5 billion.

Demand for vehicles and their parts jumped 11.5%, the largest run-up in eight years, as Japan’s recovery from the March earthquake smoothed out kinks in the production chain.

With American Airlines requesting 100 new Boeing 737 planes, nondefense aircraft orders soared 43.4%.

But, excluding the brisk pace of the transportation sector, orders rose just 0.7%. New orders for military aircraft and parts slumped more than 6% and machinery orders were down 1.5%.

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Not as much 'Made in China' as you might think

Fewer exports push trade deficit to highest level since 2008

-- Tiffany Hsu

twitter.com/tiffhsulatimes

Photo: A 2011 Ford Escape compact SUV on the showroom floor. Demand for cars and car parts jumped 11.5% in July from the month before. Credit: Charles Krupa / Associated Press

Ron Burkle is eyeing American Apparel's debt

American apparel

Los Angeles billionaire Ron Burkle is in discussions with American Apparel Inc. to refinance a portion of its $160-million debt load, according to a source close to the talks.

Burkle last year bought a 6% stake in the L.A. clothing maker and retailer, only to reduce those investments this year. The billionaire is said to be a big fan of the company and is close with Tom Casey, American Apparel's new acting president.

American Apparel faced a severe liquidity crisis earlier this year, only to be rescued in April by a team of Canadian investors.

In his most recent regulatory filing, Burkle owned 3.1% of American Apparel's shares.

American Apparel Chief Executive Dov Charney could not be reached for comment. A spokesman for Burkle's investment firm, Yucaipa Cos., declined to comment.

The news was first reported by the New York Post, which said there wasn't a lot of urgency to get the deal done right away because American Apparel has seen positive business trends lately. The report also said American Apparel had received at least one other refinancing offer.

Shares of American Apparel rose 6 cents, or 7.3%, to 92 cents Tuesday.

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-- Andrea Chang

Photo: An American Apparel store. Credit: Lawrence K. Ho / Los Angeles Times

AllPoints Communications building sold

Rexford Industrial, a privately held Los Angeles real estate investment firm, bought a fully leased industrial building in Santa Ana for $8.5 million.MacArthur

Rexford bought a 122,000-square-foot warehouse at 3441 W. MacArthur Blvd. from the Jerry Monroe Living Trust and the Monroe Family Trust, Rexford said.

An affiliate of the sellers’, Towne Inc., will continue to rent the property. Towne Inc. is the founder of AllPoints Communications, which provides support services for direct marketers.

-- Roger Vincent

Photo: Warehouse at 3441 W. MacArthur Blvd. Credit: Rexford Industrial

Fewer exports push trade deficit to highest level since 2008

Trade deficit
U.S. manufacturers are in a bind as fewer sales of domestic goods such as semiconductors and raw cotton caused the trade deficit to jump to its highest level since 2008, according to a Commerce Department report.

Foreign demand for U.S. goods still isn't enough of a buffer against what acting Commerce Secretary Rebecca Blank called "a fragile time in the world economy."

Though imports shrank to $223.9 billion in June, exports of American products shriveled even more, down 2.3% to $170.9 billion -- the steepest fall in more than two years.

Fewer capital goods and industrial supplies and materials -– about $3.5 billion worth -– were shipped abroad. That includes heavy drops in exports of fuel oil, plastics, industrial engines and generators.

The trade deficit expanded 4.4% to $53.1 billion in June, from $50.8 billion in May, according to the Commerce Department. The figure is up $6.2 billion year over year to its highest point since October 2008.

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New test for an old idea: actually making things

-- Tiffany Hsu

Photo: The Mearsk terminal in Long Beach. Credit: Perry C. Riddle / Los Angeles Times

Herbalife expands distribution facilities

Nutritional-supplement company Herbalife International Inc. expanded its Carson distribution facilities by 82% when it moved to a larger building owned by its longtime landlord, Watson Land Co.

Herbalife has moved from an 82,000-square-foot warehouse it had occupied since 1996 in the Watson Industrial Center into a 148,908-square-foot industrial property at 18431 Wilmington Ave. in Watson Land’s nearby Dominguez Technology Center, the landlord said. Watson Land Company Herbalife Facility (2)

The value of Herbalife’s 10-year lease was not disclosed, but Watson Land asks for rents in the range of 60 cents per square foot per month in Dominguez Technology Center, according to real estate data provider CoStar Group Inc.

The facility is Herbalife’s Los Angeles distribution headquarters. Watson Land has signed 1.1 million square feet of leases in 2011, the company said.

Photo:  Herbalife’s new distribution center.   Credit:  Watson Land Co.

American Apparel releases updated second-quarter results

American Apparel Inc. reported a narrower loss and improved sales for its second quarter.American apparel

For the three months ended June 30, the Los Angeles clothing maker and retailer reported a loss of $213,000, or flat earnings per share, compared with a loss of $14.7 million, or 21 cents, in the year-earlier period.

Sales were flat overall and at stores open at least a year. The latter measure, known as same-store sales, are considered an important gauge of a retailer's health because it excludes store openings and closings. The company reported preliminary second-quarter results, including sales performance, last month.

Chief Executive Dov Charney said sales trends were improving, with same-store sales up 3% in June and 4% in July.

After several difficult quarters that saw the company's stock and sales plummet, the company has been slowly working its way back to profitability. It faced a severe liquidity crisis in the spring but obtained new financing; the company also has appointed several new executives and directors, cut expenses and shut underperforming stores. 

It recently announced a partnership with EBay to create the first full online lifestyle shop on the auction site, slated to launch next month. This week it said it had expanded its partnership with U.K.-based fashion site ASOS. And Charney is adding to his pursuits: He's one of the investors in the Cardinal, a soon-to-open Southern restaurant in New York's East Village.

American Apparel reported its updated second-quarter results after the markets closed on Monday. Its shares were little changed at 12:25 p.m. PDT on Tuesday.

-- Andrea Chang

Photo: An American Apparel store. Credit: Lawrence K. Ho / Los Angeles Times

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Job growth slows and layoffs rise to 16-month high, reports say

Jobs Looking for work? Might want to try smaller businesses, which are doing the heavy lifting when it comes to job growth, according to a new report from payroll processor ADP.

Companies with fewer than 50 employees added 58,000 jobs nationwide last month, while businesses with 50 to 500 workers hired 47,000 people, according to the study. Only 9,000 new positions were at large firms with more than 500 staffers.

Small businesses have been amping up hiring for nearly two years, according to ADP.

Though 114,000 jobs were created, July’s numbers lag behind the 145,000 hires made in June. An employment report coming Friday from the Labor Department, which is expected to show even more modest figures, could throw the slowdown into sharper relief.

The service sector, including education and healthcare, grew by 121,000 jobs, according to ADP. But employment in the construction and manufacturing industries slipped.

And the stink of a sour economy loomed over layoff numbers that were also announced Wednesday. Job cuts surged to a 16-month high in July as 66,414 employees found themselves out of work, according to consulting firm Challenger, Gray & Christmas Inc.

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