Owner and chairman Elliott Sheftman confirmed Friday that high end bedding manufacturer Sheftex is closing its St. Johnsbury production facility.
"It is with much regret that it didn & #039;t work out," said Sheftman. "I have to tell you it cost me a bundle. We thought we could survive but we just got knocked out of the box on Sept. 11."
As recently as April business was booming for the Montreal-based manufacturer, and 80 people were employed at the local facility. Initially the work force was cut to about 60, then in July, a second round of layoffs left 25 employees. Since then the number has gradually dwindled to a handful, and plant manager Mark Melkonian said he finally received word they were closing some time last week.
Sheftman said the shrinking economy on both sides of the border, but particularly in the United States, left him no choice but to close. He said two retailers that carry Sheftex goods have recently declared bankruptcy, and the company has suffered major cancellations from other stores as well.
Signs of trouble have been evident. Sheftex failed to pay its $39,000 property tax bill to the town on Nov. 16.
Joel Schwartz, St. Johnsbury & #039;s economic development director, said the company was late with its taxes last year, but he suspected that with all the other problems they were having, this time it could be different.
Schwartz became even more suspicious when Sheftex executives did not return his calls.
"We had been led to believe they would maintain the building for inventory purposes," said Schwartz. "We certainly had a lot of information about the difficulties they were having, I never really thought they would move out though."
Friday afternoon Sheftex was packing up its equipment for the move back to Canada. Melkonian said in tough times like these, people are just not going to spend top dollar for the high-quality goods Sheftex produces. Instead, he said, people are going to go to Ames and get imported bedding made in countries where the workers "make in a week what we make in a day."
"Imports are absolutely killing us," said Melkonian. "It & #039;s hurting me, and it & #039;s hurting to see my people go."
"We really are very sad about this," said Sheftman. "We had a very nice staff down there and it is not their fault whatsoever.
"We tried to hang until we couldn & #039;t hang anymore," he continued. "We have never had to close a facility, unfortunately we have to try to save ourselves."
Sheftman went on to say that if his company of 52 years can weather the storm, it is almost inevitable that they will try to re-establish a foothold in the United States. He added that St. Johnsbury always treated Sheftex very well.
Schwartz said that if there is good news in all of this, it is that the facility may soon be available for retail space once again.
Sheftex had been subletting the space from Ames, and Ames was determined not to let a retail competitor into the building. Ames of course is having its own problems, but Schwartz noted that if the building becomes vacant, owner Block Realty Trust in Kansas City, Mo., might have to reassess its previously unrealistic asking price.
Referring to the company & #039;s distance from the Northeast Kingdom, Schwartz said, "Block never was aware of the fair market value here."