US-based furniture manufacturer The Leather Factory has been forced to close and now faces bankruptcy, apparently as a result of foreign competition.

According to a statement, labour costs were high as all manufacturing took place in the US and the company became increasingly unable to keep control of manufacturing costs despite furniture sales being strong.

According to reports, the company is now evaluating offers to buy its stores and its bankruptcy case is pending in court.

Brian Davidoff, serving as counsel for The Leather Factory's creditors committee, commented that because Chinese products were lower in price and had improved in quality they had become extremely competitive and that the problems the company has faced are far more widespread in the industry than people realise.