Recently, several well-established domestic manufacturing companies in the United States have successively closed factories, leading to hundreds of employees losing their jobs and exposing an increasingly severe survival crisis in American domestic manufacturing.

Among them, the local American cabinet manufacturer Legacy Cabinets announced that it would permanently shut down all operations and cancel all positions. The notice was issued on the same day as the last working day, with no buffer transition period; the global tool manufacturing giant Stanley Black & Decker also officially closed its last tape measure manufacturing factory in Connecticut, USA...

These signals not only reflect the deep fluctuations in the American economic cycle but also sound the alarm for Chinese cross-border sellers in terms of supply chain and market strategy.

01 US Real Estate Decline, Impact on Home Furnishing Downstream Track

Legacy Cabinets, an American domestic cabinet company founded in 1994 and deeply involved in the industry for 32 years, suddenly announced its closure without warning, directly causing nearly 400 employees to lose their jobs overnight and making many employees worried about whether their salaries could be fully settled.

In the memorandum sent to employees, Legacy Cabinets stated that due to financial and business challenges, the company decided to permanently stop all operations at the factory on Legacy Blvd.

Image source: WBRC 6 NEWS

Management said that they had been actively seeking financing and investment opportunities in recent months and believed that publicizing difficulties would undermine negotiations. However, financing ultimately failed to materialize, and Legacy Cabinets chose to close down abruptly.

In fact, the sudden closure of Legacy Cabinets is not only a chain reaction to the sudden drop in demand in the later period of the US real estate cycle but also an inevitable result of excessive expansion at the peak of the industry and failure to shrink operational leverage in time. As a core cabinet supplier closely related to new home construction and old home renovation, its orders are highly dependent on the prosperity of the real estate market.

Previously, affected by the soaring mortgage interest rates, the US real estate transaction was once in a downturn, and this downward pressure was transmitted to the home furnishing track, resulting in a significant weakening of demand for categories strongly bound to real estate such as cabinets and large building materials.

The trend of shrinking downstream demand for US real estate has been clearly confirmed in the financial report data of Chinese leading cross-border home furnishing sellers, and it also highlights the fatal risk of "single market dependence".

According to the 2025 financial report data of Zhiou Technology, the company's revenue in the US and Canada regions decreased by 10.33% year-on-year, and the weakness of the North American market was very obvious; in contrast, the revenue in the European market increased by 16.03% year-on-year during the same period, becoming the core growth pillar of the enterprise, and the market differentiation trend was significant.

Another leading enterprise, Aokiji Shares, is under more pressure. In the first half of 2025, Aokiji Shares' net profit attributable to the parent company decreased significantly by 58.33%, and the core reason was that the proportion of US market revenue was too high. Fluctuations in demand and policy changes in the North American market directly caused severe shocks to the overall performance of the enterprise.

In order to break the dilemma of a single market, Aokiji Shares actively initiated market structure optimization. The 2025 annual report shows that the company's revenue in the European region increased by 49.8% year-on-year. By focusing on the second growth market, it effectively diluted the dependence on the North American market and alleviated the downward pressure on performance.

The sudden closure of Legacy Cabinets is a warning about cycles, transformation, and survival. It is more urgent than ever for cross-border e-commerce sellers to understand this signal.

On the one hand, it is necessary to closely monitor US macroeconomic indicators - interest rate trends, real estate sales data, consumer confidence index, and maintain a high degree of caution for categories closely related to real estate such as home furnishing and building materials, and timely transform into categories with rigid demand, consumables, or anti-cycle characteristics.

In an exchange, a Wayfair executive told Hugo Cross-border that categories with lower unit prices, shorter decision-making cycles, and higher repurchase rates, such as storage, seasonal decoration, lighting, and kitchen and dining, are becoming the new growth mainstay of American home consumption - "it's not about helping consumers move into new homes, but about helping them redesign their existing homes".

On the other hand, it should also be recognized that the return of US manufacturing is difficult to achieve in the short term. Comparing the closure of Legacy Cabinets with Aokiji Shares' financial report, we can see a clear industry logic: cyclical demand decline will first break through financially fragile domestic brands. In contrast, Chinese cross-border leading enterprises, with their mature supply chain system, efficient production and operation capabilities, and ultimate cost control advantages, still have sufficient room for maneuver and adjustment in overseas market fluctuations.

02 Accelerated Global Capacity Restructuring

It is worth noting that Legacy Cabinets is not the only company that has closed its US domestic manufacturing factory recently.

In May this year, the global tool manufacturing giant Stanley Black & Decker officially closed its last tape measure manufacturing factory in Connecticut, USA. This factory, which has a history of 181 years since its birth in 1843 and has long produced the brand's most iconic yellow tape measure products, once had an annual output of nearly 30 million pieces. After the shutdown, it completely withdrew from the historical stage, and about 300 employees faced unemployment.

According to multiple US media disclosures, Stanley Black & Decker's core production line is not in the United States, but continues to expand the production capacity of its Thai factory. The key turning point of the incident was that the market shifted from single-sided tape measures to double-sided tape measures, but the US domestic factory failed to adjust its production line in time, while the Thai factory had already completed the layout. It is worth noting that the labor cost of the Thai factory is only about one-quarter of the US domestic manufacturing cost.

The Wall Street Journal reported that Stanley Black & Decker had evaluated whether to upgrade its US factory equipment to support double-sided printing production in the past, but ultimately believed that continuing to invest in the US domestic production line "does not have economic rationality".

In the past few years, the United States has continuously promoted the policy of returning manufacturing to the domestic market, hoping to attract enterprises to relocate their production chains back to the domestic market. But the reality is that under the influence of multiple factors such as labor costs, supply chain supporting efficiency, and the maturity of overseas manufacturing, many enterprises still cannot stand firm in the United States and can only continue to promote global capacity layout.

Looking at the domestic situation, many leading enterprises going global have already predicted industry trends and actively initiated capacity relocation layout, setting up factories in Southeast Asia and building a "China + Southeast Asia" dual capacity system to hedge against the risk of a single production location.

Jujitech has early arranged production bases in Vietnam and Thailand, relying on low-cost capacity in Southeast Asia to undertake overseas orders, effectively avoiding tariff barriers in Europe and America and the cost pressure of domestic capacity, and continuously stabilizing its global tool market share. Anker Innovation actively optimizes the global capacity structure, transferring half of its US-bound product capacity to Southeast Asian factories, relying on localized production to adapt to overseas market rules, and significantly reducing the risks of supply interruption and cost increases in a single production location.

In addition, many small and medium-sized cross-border sellers of home furnishing and hardware have also set up factories in Southeast Asian countries such as Malaysia and Indonesia, relying on the local mature industrial supporting facilities and cost advantages to build alternative capacity bases and achieve flexible order distribution.

The two cases of Legacy Cabinets and Stanley Black & Decker also reflect the current industry situation of global consumption cycle fluctuations and accelerated global capacity restructuring, while also forcing Chinese sellers to rethink their growth paths.

Similarly dependent on the US market, the home furnishing track with stronger consumer attributes is directly bearing the impact of weak overseas demand; while tool products, because they have the characteristics of engineering maintenance, industrial procurement, and B-end procurement, the overall demand resilience is relatively stronger.

In general, the era of rapid expansion relying on a single market and traffic dividends is gradually coming to an end, and cyclical fluctuations, policy changes, and capacity restructuring will become the norm. In the future, whether to establish multi-channel operation capabilities, diversify platform risks, and form branding and localization capabilities are becoming new topics that more and more enterprises going global must face.

(Source: Hugo Cross-border Editorial Department)

Seller's Home Review

The closure of well-established domestic manufacturers in the United States warns cross-border sellers to pay high attention to supply chain risks, especially categories that rely heavily on assets. It is recommended to immediately investigate the operational stability of core cooperative factories and accelerate the preparation of alternative suppliers and multi-country decentralized layout to hedge against the impact of supply interruption caused by fluctuations in a single market.

Source: Hugo Cross-border
Original link: https://www.cifnews.com/article/186926