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Spa firm closing Johnson City, Elizabethton operations; Fencing firm laying off workers

Jeff Keeling • Oct 28, 2008 at 12:00 AM

A local spa manufacturer, Infinity Spas, has sold its operations to a Florida company that will close facilities in Johnson City and Elizabethton, resulting in 150 layoffs that Infinity officials announced to workers Monday afternoon. Another local company that makes vinyl fencing products also announced it was in the midst of a 40-employee layoff.

Infinity, which opened in 2005, worked the deal with a Tampa company, Living Water Products, over the past couple weeks, and CEO Dave Hatley said severe reductions in demand had hit both companies hard since the spring.

“We didn't really see a downturn until about May or June, but the last couple months there’s just been a sharp decline,” said Hatley, whose company sold to stores like Costco and Home Depot.

“Those guys are really taking a hit in the leisure product industry, which is where we fall.” Infinity’s Web site shows 12 spa models with suggested retail prices from $2,899 to $16,999, with eight of the 12 between $5,000 and $10,000.

Infinity had 110 employees at its manufacturing plant on Buffalo Road, and another 40 in a call center and distribution warehouse in Elizabethton. Hatley said workers will be eligible for unemployment benefits and probably additional retraining help, but added that he hated to be breaking the news.

“Everybody knew things were slowing down, but I don't think they saw a consolidation coming,” Hatley said of the local workers.

“This is a great area for labor force,” Hatley said. “The cost and labor force around here is tremendous, but there’s really no other alternative for us.”

He said Infinity and Living Water both were producing at about 30 percent of capacity since the sudden slowdown this summer.

“There's no way we can facilitate an operation this size with those type of economic conditions. It’s just one of those times when manufacturers have to come together and hunker down and get through this downturn.”

Hatley said the acquisition will give Living Water, which manufactures Lazy Boy and Coleman branded spas mostly for pool and spa stores, to broaden its market to the mass merchants that were Infinity's customers. They’ll keep the Infinity name on the products, but make them in Tampa.

Today’s news was the end of what turned out to be a brief chapter in local manufacturing. Infinity opened in 2005 when, Hatley said, “we saw a certain niche in the spa industry, and we just decided to start manufacturing and go after it.”

That niche was selling to large retailers — Hatley said he came out of the retail industry — and it worked, as the company moved from 30 employees in 2005 to 80 in 2006 and 200 in 2007, and even bought a Dallas-based competitor, Keys Backyard, last year.

The company bought its 200,000-square-foot Elizabethton location last year with plans to expand further and consolidate its operations there (its Buffalo Road plant is 75,000 square feet).

Instead, workers found themselves without jobs when they pulled out of the parking lot Monday. In other news, ProPlastix International Inc., which makes vinyl fencing and window and door products, is expected to lay off 40 workers during a period that began Oct. 14 and will end Nov. 30. The news was reported Monday by the state Department of Labor and Workforce Development.

A spokesman at the company's Pennsylvania headquarters would not comment on the layoffs, but a local economic development official said he thought the company employed a total of about 50 people.

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