Rainbow Play Systems Inc. announced Thursday a reduction in its workforce in response to a weakening retail demand and the loss of a key mass merchant account.

According to a news release issued by the playground equipment manufacturer, Rainbow’s distribution center in Albert Lea has been shut down and 35 positions have been cut across all departments.

It is unclear how many of these positions were at the shipping facility in Albert Lea or at the main production facility in Brookings, S.D.

Moving forward, all Rainbow Play Systems products will be shipped directly from Rainbow’s main production facility in Brookings, S.D., where all the wooded parts are manufactured.

Previously, when the wood pieces were finished, they were moved to the Rainbow location in Albert Lea for distribution. The Albert Lea site also managed hardware, and so things like swings, slides, bubble panels, canopy and assembly pieces were stored in Albert Lea, where they were boxed and then shipped.

The company occupied the warehouses formerly used by Universal Tire Warehouse in the Jobs Industrial Park.

“Obviously, you hate to see anybody lose a job or any employer leave the community. That’s never good,” said Dan Dorman, executive director of the Albert Lea Economic Development Agency. “We were happy when they were here, and we’re sad to see them leave.”

Founded in 1984 in a garage in Prior Lake, Rainbow had sales of over $100 million in 2007.

The company offers more than 100 swing-set designs and has more than 300 showrooms where families can check out a variety of swing sets based on a modular method. This allows customers to add more accessories as their children grow and tastes change.

The swing sets are primarily built out of cedar, redwood and cunninghamia. These are naturally decay-resistant materials, similar to those used for building decks and siding. Rainbow also uses plastic encapsulated lumber in building swing sets. PEL is produced by coating spruce, pine and fir lumber with a lead-free ployethylene to eliminate color fading and deterioration.

Sasha and Malia Obama, daughters of President Barack Obama, had Rainbow Play Systems’ playground equipment installed at the White House in March 2009.

Dorman said ALEDA is going to reach out to the building owner and help lease the space.

“Hopefully we can work with them to employ as many, if not more, people,” he said.

When a business decides to close its doors, it takes money out of the local economy, plus people lose their jobs, he added.

The Tribune made several calls to Rainbow Play Systems’ human resource director on Friday but did not receive a return call.