CNF Inc. announced today that it would take a write-off over two quarters of approximately $23 million, net of tax, primarily from unrealized accounts receivable due to the business failure of one of Menlo Logistics' customers, furniture retailer Homelife. Menlo Logistics also announced that it would layoff, effective immediately, about 400 full-time employees who worked on the Homelife account in various U.S. locations.
Formerly a business unit of Sears, Homelife has announced that it has closed its stores nationwide due to adverse financial conditions. Menlo Logistics had a contract for supply chain management services with Homelife.
John H. Williford, president and CEO of Menlo Logistics, said he was disappointed that Homelife had not been able to make a success of its business.
"Our project with Homelife was an end-to-end supply chain management system that was efficient and well run,” Williford said. “We are extremely disappointed that Homelife became another victim of this economic downturn.”
Williford emphasized that the write-off would not affect Menlo's other clients. He said that aside from this one-time charge Menlo expects to post solid profits for the year on existing and new business and continues to win a significant number of the new contracts it bids on.
CNF plans to announce its full financial results for the second quarter on July 18.