<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ------------------

                                    FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the fiscal year ended January 2, 1999                        Commission file
                                                                  Number 0-11577
                              LADD FURNITURE, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

      North Carolina                                    56-1311320
----------------------------                ------------------------------------
(State or other jurisdiction                (I.R.S. Employer Identification No.)
    of incorporation)

Post Office Box 26777, Greensboro, North Carolina                27417-6777
-------------------------------------------------                ----------
    (Address of Principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code:  336-294-5233

Securities registered pursuant to Section 12(b) of the Act:
                                                              None
                                                              ----

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock - $.30 par value
                          -----------------------------
                                (Title of Class)

        Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                               Yes |X|    No ___

        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ]

        Market value of 7,147,407 shares held by nonaffiliates as of March 10,
1999, was $121,505,919.

        Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.

                7,850,746 shares outstanding as of March 10, 1999

                       DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the definitive Proxy Statement for the 1999 Annual Meeting
of Shareholders are incorporated by reference into Part III hereof.


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                                     PART I

ITEM 1. BUSINESS

         GENERAL - LADD Furniture, Inc., incorporated in 1981 under the laws of
the State of North Carolina, is a leading manufacturer of residential furniture,
which is sold through diverse retail distribution channels, as well as contract
furniture which is sold to the hospitality, healthcare (assisted-living) and
governmental markets. The Company produces a wide variety of furniture designed
to appeal to a broad range of customers seeking quality, style and value. Based
upon industry data published in the trade publication Furniture/Today, LADD is
one of the largest manufacturers of residential furniture in North America.
Unless the context otherwise indicates, "LADD" and "Company" refer to LADD
Furniture, Inc., its divisions, and consolidated subsidiaries.

         The Company markets its residential casegoods (wood and wood
components) and upholstered furniture domestically under the major brand names
American Drew, Barclay, Clayton Marcus, Lea, Pennsylvania House and Pilliod. The
operational management for the Company's residential furniture brands is split
into a Casegoods Group and an Upholstery Group. LADD's residential brands are
exported worldwide through LADD International. In 1998, the Company sold
residential furniture to customers in 50 countries.

         Under the American of Martinsville brand name, LADD is also one of the
leading suppliers of contract casegoods and upholstered furniture. The Company
has management, as well as manufacturing facilities, dedicated to this segment
of its business.

         INDUSTRY SEGMENTS - LADD manufactures and markets casegoods and
upholstered furniture for two business segments - the residential furniture
market and the contract furniture market.

         Residential Furniture - The residential furniture segment is comprised
of casegoods, consisting primarily of bedroom, dining room and living room
furniture, wall units and occasional tables, and upholstery, consisting
primarily of sofas, loveseats and chairs. The residential products are
distributed directly and through approximately 200 independent sales
representative organizations to approximately 6,700 customers, including leading
department stores, furniture retailers, mass merchandisers, catalog
merchandisers, and various specialty stores and retail companies.

         Residential casegoods furniture, ranging from promotionally-priced
products to products in the upper-medium price range, are marketed principally
under the brands American Drew, Lea, Pennsylvania House and Pilliod. These
products are manufactured in 12 plants in seven states. Residential upholstered
furniture, ranging in price from moderate to upper-medium, is marketed under the
major brands Barclay, Clayton-Marcus, and Pennsylvania House. These products are
manufactured with both fabric and leather covers in six plants located in North
Carolina and Mississippi. For further information regarding the residential
segment facilities, see page 5 in this Form 10-K.

         To improve service to its residential customers and to minimize damage
to its products, the Company operates a modern fleet of over-the-road tractors
and trailers that are operated as LADD Transportation. LADD's transportation
fleet carries approximately 32% of the outbound shipments of LADD's residential
furniture products and also hauls a portion of the Company's in-bound raw
materials and supplies.

         Contract Furniture - Casegoods and upholstered products for the
contract furniture segment are manufactured under the brand name American of
Martinsville and marketed worldwide to the hospitality (hotel/motel) industry.
Contract furniture is also sold to the healthcare furniture market for
retirement homes and assisted-living facilities, as well as to certain agencies
of the U.S. Government for housing. Through LADD Contract Sales Corporation, the
Company distributes its contract products directly through 50 independent sales
representative organizations to approximately 1,000 customers. The contract
furniture segment operates two manufacturing facilities located in Virginia and
utilizes other LADD manufacturing facilities and subcontractors to



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<PAGE>   3

meet capacity constraints. For further information regarding the contract
segment facilities, see page 5 of this Form 10-K.

         MARKETING AND MAJOR CUSTOMERS - The Company's brands are generally
marketed under their own trade names. The general marketing practice followed in
the furniture industry and by the Company is to exhibit products at national
furniture markets. Internationally, the Company markets its residential products
primarily through LADD International, a corporate marketing unit formed to
coordinate the worldwide marketing efforts for LADD's brands.

         The Company has also entered into licensing arrangements for various
product lines, including Pennsylvania House's Bill Blass collection; Lea's youth
furniture bedroom collections, Stars and Stripes endorsed by America's premier
yachtsman, Dennis Conner, and Slam Dunk and Center Court endorsed by NBA
basketball star Grant Hill; and American Drew's Bob Mackie collection of bedroom
and dining room furniture.

         While no single customer accounted for more than 8% of net sales in
1998, at January 2, 1999, approximately 10% of the Company's trade accounts
receivable were from Heilig Meyers. Otherwise, the Company's business is not
dependent upon a single customer, the loss of which would have a material effect
on the Company.

         PRODUCT DESIGN AND DEVELOPMENT - Each operating entity develops and
manages its own product lines. New product groups are introduced at national or
regional furniture markets, and, based upon their acceptance at the markets, the
products are either placed into production or withdrawn from the market.
Consistent with industry practice, the Company designs and develops new product
groups each year, replacing collections or items that are discontinued.

         RAW MATERIALS - The most important raw materials used by the Company
are hardwood lumber, veneers, upholstery fabrics, polyfoam, leather, plywood,
particleboard, hardware, finishing materials, glass, steel springs, and high
pressure laminates. The domestic wood species purchased include cherry, oak,
maple, ash, white pine, poplar, and other American species, and imports such as
rubberwood, guatambue and mahogany. The Company believes that its sources of
supply for these materials are adequate and that it is not dependent on any one
supplier.

         The Company's manufacturing plants are heated by furnaces using gas,
fuel oil, wood waste, and other scrap material as energy sources. The furnaces
located at casegoods plants have been adapted so that they use alternate energy
sources, and are fueled principally by wood wastes. The Company's plants use
electrical energy purchased from local utilities. The Company has not
experienced a shortage of energy sources and believes that adequate energy
supplies will be available for the foreseeable future.

         PATENTS AND TRADE NAMES - The trade names of the Company represent many
years of continued business, and the Company believes such names are well
recognized and associated with quality in the industry. The Company owns
intellectual properties that are considered to be important to the business and
that do not have a limited duration.

         INVENTORY PRACTICES, ORDER BACKLOG AND CREDIT PRACTICES - The Company
generally schedules production of its various manufacturing plants based upon
orders on hand. Manufacturing efficiencies and investment in inventories are,
therefore, directly related to the current volume of orders. The Company, and
the industry generally, honors cancellation of orders made prior to shipment.
The Company's backlog of unshipped orders believed to be firm at 1998 fiscal
year end was approximately $96.5 million, as compared to $97.6 million at 1997
fiscal year end. Generally, orders in the backlog are shipped during the
following 12 months. The Company's residential furniture brands as a whole are
not subject to significant seasonal variations; however, the Company's contract
segment does have some seasonality with higher sales in the second and fourth
quarters.

         COMPETITION - The furniture industry is highly competitive and includes
a large number of manufacturers, none of which dominate the market. Industry
estimates indicate that there are over 600 manufacturers of residential and
contract furniture in the United States, some of which include furniture types
not manufactured by the Company. Competition within the market for furniture
occurs principally in the areas of style or design, quality, price, and service.

         In recent years, foreign imports of finished furniture and component
parts have increased. Some of the imported products compete with products
manufactured and marketed by the Company, and the Company's Pilliod brand has
experienced the most negative impact. Where appropriate, the Company has
capitalized upon the cost advantages of importing selected component parts and a
limited number of finished products but is not dependent upon any foreign
sources. In 1998 and 1997,



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<PAGE>   4

the Company imported approximately $18.3 million and $21.3 million,
respectively, of finished furniture and unfinished furniture parts.

         The Company has no facilities located outside the continental United
States.

         GOVERNMENTAL REGULATIONS - The Company is subject to a wide-range of
Federal, state and local laws and regulations relating to protection of the
environment, worker health and safety, and the emission, discharge, storage,
treatment and disposal of hazardous materials. These laws include the Clean Air
Act, the Resource Conservation and Recovery Act, the Federal Water Pollution
Control Act and the Comprehensive Environmental, Response, Compensation and
Liability Act. Certain of the Company's operations use adhesives and coating
materials that contain chemicals that are considered hazardous under various
environmental laws. Accordingly, management closely monitors the Company's
environmental performance at all of its facilities. Management believes that the
Company is in substantial compliance with all environmental laws.

         See "Legal Proceedings" regarding the status of environmental
proceedings in which the Company is involved.

         EMPLOYEES - The Company had approximately 6,500 employees as of March
1, 1999. Substantially all of the employees were employed on a full-time basis.

         Employees at four Company plants are represented by various labor
unions. The Company considers its relations with its employees to be good.

         EXPORT SALES - In 1998, the Company's export sales decreased to $29.4
million (approximately 5.1% of 1998 net sales), from $29.7 million in 1997
(approximately 5.7% of 1997 net sales). The Company's export sales in 1996 were
$25.4 million, or approximately 5.1% of 1996 net sales. None of the Company's
physical assets are dedicated solely to export sales.



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<PAGE>   5

ITEM 2. PROPERTIES

         The following table summarizes the real estate, both owned and leased,
used in the business operations of the Company as of March 1, 1999.

                                 LADD FACILITIES

<TABLE>
<CAPTION>
====================================================================================================================================
                                                                           APPROX. FACILITY SIZE      OWNED       LEASE EXPIRATION
BUSINESS SEGMENT        LOCATION                            USE                (SQUARE FEET)        OR LEASED           DATE
====================================================================================================================================
<S>                <C>                           <C>                               <C>               <C>              <C>
Residential        Abingdon, VA                  Distribution                      122,000           Leased           12/31/99
                   Dillon, SC                    Distribution                       60,000           Leased           mo-to-mo
                   Hickory, NC                   Manufacturing/Office/Dist.        446,000            Owned
                   Hickory, NC                   Manufacturing                     121,800            Owned
                   Hickory, NC                   Manufacturing                     154,000            Owned
                   Lewisburg, PA                 Manufacturing/Office/Dist.        618,500            Owned
                   Marion, VA                    Manufacturing                     204,900            Owned
                   Monroe, NC                    Manufacturing                     258,000           Leased           3/31/04
                   Morristown, TN                Manufacturing                     286,380            Owned
                   Morristown, TN                Manufacturing                     139,200            Owned
                   Morristown, TN                Distribution                      160,000           Leased           10/31/03
                   Morristown, TN                Distribution                       97,500           Leased           10/31/03
                   Myrtle, MS                    Manufacturing                     162,900            Owned
                   Nichols, SC                   Manufacturing                     391,000            Owned
                   N. Wilkesboro, NC             Manufacturing                     409,000            Owned
                   N. Wilkesboro, NC             Manufacturing                     414,000            Owned
                   N. Wilkesboro, NC             Manufacturing                     122,500            Owned
                   N. Wilkesboro, NC             Distribution/Office               109,500            Owned
                   Selma, AL                     Manufacturing                     303,000            Owned
                   Sherman, MS                   Manufacturing/Office              317,100            Owned
                   Swanton, OH                   Manufacturing/Dist.               290,000            Owned
                   Waynesville, NC               Manufacturing                     447,400            Owned
                   White Deer, PA                Manufacturing/Dist.               128,000            Owned
------------------------------------------------------------------------------------------------------------------------------------
Contract           Chilhowie, VA                 Manufacturing                     585,000            Owned
                   Martinsville, VA              Manufacturing                     867,000            Owned
                   Martinsville, VA              Office                             50,000           Leased           5/31/02
                   Martinsville, VA              Distribution                      256,500           Leased           9/30/99
                   Martinsville, VA              Distribution                       50,000           Leased           7/31/99
------------------------------------------------------------------------------------------------------------------------------------
Corporate          Greensboro, NC                Office                             50,000           Leased           10/31/07
====================================================================================================================================
</TABLE>



                                       5
<PAGE>   6

         The Company believes that its manufacturing, warehouse and office space
is well maintained for its intended purposes and is adequately insured. The
Company normally operates all of its furniture manufacturing facilities on a one
shift per day, five-day week basis. Increasingly, certain departments and
facilities are operated on a multi-shift basis.

         The Company also maintains showrooms (the majority of which are leased)
in High Point, NC, Sherman and Tupelo, MS, and Martinsville, VA.

         The Company owns and leases substantial quantities of woodworking,
sewing and material handling equipment located in its various plants. The
Company also leases substantially all of its data processing equipment,
telephone systems, and other office equipment. The Company considers its present
equipment to be adequate, well-maintained, generally modern, and adequately
insured.

         The Company currently owns and leases approximately 110 tractors and
250 trailers.

ITEM 3. LEGAL PROCEEDINGS

         The Company is involved in routine litigation from time to time in the
regular course of its business. In the opinion of the Company, there are no
material legal proceedings pending or known to be contemplated to which the
Company is a party or of which any of its property is subject.

         The Company has been named as a potentially responsible party ("PRP"),
along with numerous parties, at various hazardous waste sites undergoing cleanup
or investigation for cleanup. The Company believes that at each of these sites,
either it has been improperly named, or it will be considered a "de minimis"
party, or the ultimate costs to the Company associated with site will not have a
material adverse effect on the Company's financial position and results of
operations. Although the Company believes adequate accruals have been provided
for environmental contingencies, it is possible, due to uncertainties associated
with these types of matters, that additional accruals could be required in the
future. However, the ultimate resolution of these contingencies, to the extent
not previously provided for, should not have a material adverse effect on the
Company's financial position and results of operations.

         The Company is cooperating fully with government authorities in each of
these matters.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No such matters were submitted to security holders of the Company in
the fourth quarter of fiscal year 1998.


                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
        MATTERS

        STOCK TRANSFER AGENT:

        Wachovia Shareholder Services
        c/o Boston EquiServe, L.P.
        Post Office Box 8217
        Boston, MA  02266-8217

        Shareholder Account Information: 1-800-633-4236

        STOCK LISTING:

         The Company's common stock is traded on the Nasdaq Stock Market under
the Nasdaq symbol: LADF. At year end 1998, the Company had approximately 3,500
shareholders based upon approximately 590 shareholders of record at that date
and an estimate of the number of individual shareholders represented by broker
and nominee position listings.



                                       6
<PAGE>   7

      MAJOR MARKET MAKERS:

      Huntleigh Securities Corp.                 SBC Warburg Dillon Read Inc.
      Interstate/Johnson Lane Corp.              Scott & Stringfellow, Inc.
      Jefferies & Company, Inc.                  Sherwood Securities Corp.
      Knight Securities                          Smith, Moore & Co.
      Mayer & Schweitzer Inc.                    Speer Leeds & Kellogg
      Raymond, James & Associates                Wheat, First Union, Inc.


         See Item 6, Selected Financial Data, for market and dividend
information regarding the Company's Common Stock.

ITEM 6. SELECTED FINANCIAL DATA

         The Summary of Selected Financial Data for each of the periods in the
six-year period ended January 2, 1999, which appears on page 14 of the LADD
Furniture, Inc. Annual Report to Shareholders for 1998, is incorporated by
reference in this Form 10-K Annual Report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

         Management's Discussion and Analysis of Financial Condition and Results
of Operations for each of the years in the three year period ended January 2,
1999, which appears on pages 15 to 18 of the LADD Furniture, Inc. Annual Report
to Shareholders for 1998, is incorporated by reference in this Form 10-K Annual
Report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The Consolidated Financial Statements, together with the independent
auditors' report thereon of KPMG LLP dated February 5, 1999, and the Selected
Quarterly Data, appearing on pages 19 to 31, page 34 and page 32, respectively,
of the accompanying LADD Furniture, Inc. Annual Report to Shareholders for 1998
are incorporated by reference in this Form 10-K Annual Report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

         No changes in accountants or disagreements with accountants on
accounting or financial disclosure occurred in fiscal years 1996, 1997, and
1998.


                                    PART III

         Part III is omitted as the Company intends to file with the Commission
within 120 days after the end of the Company's fiscal year a definitive proxy
statement pursuant to Regulation 14A which will involve the election of
directors. With the exception of the information specifically required by Items
10, 11, 12 and 13 of this Part III contained in the Company's proxy statement,
the Company's proxy statement is not incorporated by reference nor deemed to be
filed as a part of this report, including without limitation the Board
Compensation Committee Report on Executive Compensation required by Item 402(k)
of Regulation S-K and the Performance Graph required by Item 402(l) of
Regulation S-K.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         See reference to definitive proxy statement under Part III. See pages
4-6 and 15-16 in the Company's definitive proxy statement.



                                       7
<PAGE>   8

ITEM 11. EXECUTIVE COMPENSATION

         See reference to definitive proxy statement under Part III. See pages
7-14 in the Company's definitive proxy statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         See reference to definitive proxy statement under Part III. See pages
2-4 in the Company's definitive proxy statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         See reference to definitive proxy statement under Part III. See page
14 in the Company's definitive proxy statement.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
                                                                                              Page(s) in the
                                                                                               Annual Report
                                                                                              --------------
<S>                                                                                            <C>     
(a) The following documents are filed as part of this report:

         (1) Financial Statements

             Consolidated Statements of Operations for the years ended January 2, 1999,
             January 3, 1998, and December 28, 1996..................................................... 19

             Consolidated Balance Sheets as of January 2, 1999 and January 3, 1998...................... 20

             Consolidated Statements of Cash Flows for the years ended January 2, 1999,
             January 3, 1998, and December 28, 1996..................................................... 21

             Consolidated Statements of Shareholders' Equity for the years ended January 2, 1999,
             January 3, 1998, and  December 28, 1996.................................................... 22

             Notes to Consolidated Financial Statements.............................................. 23-31

             Independent Auditors' Report............................................................... 34

         (2) Index to Financial Statement Schedule:

             Independent Auditors' Report ..............................................................F-1

             Valuation and Qualifying Accounts and Reserves ............................................F-2

             All other schedules are omitted because they are not applicable or the required 
             information is shown in the financial statements or notes thereto.
</TABLE>



                                       8
<PAGE>   9

         (3) List of Executive Compensation Plans

             LADD Furniture, Inc. 1994 Incentive Stock Option Plan

             Employee Restricted Stock Purchase Agreements for the
             named executive officers of the registrant as required
             by Item 402(a)(2) of Regulation S-K

             Executive Employment Agreements with each of Fred L.
             Schuermann, Jr., William S. Creekmuir, Kenneth E. Church,
             Donald L. Mitchell, and Michael P. Haley

             LADD Furniture, Inc. Executive Retirement Plan

             LADD Furniture, Inc. Management Deferred Compensation Plan

             LADD Furniture, Inc. Long-Term Incentive Plan (1996)

             LADD Furniture, Inc. Long-Term Incentive Plan (1997)

             LADD Furniture, Inc. Long-Term Incentive Plan (1998)

             LADD Furniture, Inc. Long-Term Incentive Plan (1999)

             LADD Furniture, Inc. 1997 Management Incentive Plan

             LADD Furniture, Inc. 1998 Management Incentive Plan

             LADD Furniture, Inc. 1999 Management Incentive Plan

(b) Reports on Form 8-K filed in the last quarter of fiscal 1998:

             Current Report on Form 8-K dated October 13, 1998, filed with
             the Commission on October 14, 1998 reporting the Company's
             results of operations for the third fiscal quarter of 1998

(c) Exhibits

             3.1    Articles of Incorporation and Amendments.

             (Previously filed as Exhibit 10 to Item 14 of the Company's Annual
             Report on Form 10-K for the year ended December 29, 1990, filed
             with the Commission on March 28, 1991, and as Exhibit 10.1 to Item
             6 of the Company's Quarterly Report on Form 10-Q for the quarter
             ended July 1, 1995, filed with the Commission on August 15, 1995)

             3.2    Bylaws (as amended March 5, 1996)

             (Previously filed as Exhibit 3.1 to Item 14 of the Company's Annual
             Report on Form 10-K for the year ended December 30, 1995, filed
             with the Commission on March 28, 1996)

             LADD Furniture, Inc. 1994 Incentive Stock Option Plan

             (Previously filed as Exhibit 10.1 to the Company's Report on Form
             10-K for the year ended January 3, 1998, filed with the Commission
             on March 31, 1998)

             Employee Restricted Stock Purchase Agreement between the Company
             and Fred L. Schuermann, Jr. dated March 2, 1995



                                       9
<PAGE>   10

             Employee Restricted Stock Purchase Agreement between the Company
             and William S. Creekmuir dated March 2, 1995

             (Previously filed as Exhibits 10.2 and 10.3 to the Company's Annual
             Report on Form 10-K for the year ended December 31, 1994, filed
             with the Commission on March 30, 1995)

             Employee Restricted Stock Purchase Agreement between the Company
             and Kenneth E. Church dated March 2, 1995

             Employee Restricted Stock Purchase Agreement between the Company
             and Michael P. Haley dated June 23, 1994

             Employee Restricted Stock Purchase Agreement between the Company
             and Michael P. Haley dated March 2, 1995

             (Previously filed as Exhibits 10.4 - 10.6 to Item 14 of the
             Company's Annual Report on Form 10-K for the year ended December
             30, 1995, filed with the Commission on March 28, 1996)

             Executive Employment Agreement between the Company and Fred L.
             Schuermann, Jr. dated October 28, 1994

             (Previously filed as Exhibit 10.2 to Item 6 of the Company's
             Quarterly Report on Form 10-Q for the quarter ended October 1,
             1994, filed with the Commission on November 15, 1994)

             Enclosed as Exhibit 10.1 to this Annual Report on Form 10-K for the
             year ended January 2, 1999:

             10.1    First Amendment to Executive Employment Agreement between 
             the Company and Fred L. Schuermann, Jr., dated March 10, 1999

             Executive Employment Agreement between the Company and William S.
             Creekmuir dated December 1, 1995

             Executive Employment Agreement between the Company and Kenneth E.
             Church dated May 22, 1995

             Executive Employment Agreement between the Company and Donald L.
             Mitchell dated January 1, 1996

             Executive Employment Agreement between the Company and Michael P.
             Haley dated March 5, 1996

             (Previously filed as Exhibits 10.7 - 10.10 to Item 14 of the
             Company's Annual Report on Form 10-K for the year ended December
             30, 1995, filed with the Commission on March 28, 1996)

             Enclosed as Exhibits 10.2, 10.3, 10.4 and 10.5 to this Annual
             Report on Form 10-K for the year ended January 2, 1999:

             10.2    First Amendment to Executive Employment Agreement between 
             the Company and William S. Creekmuir dated March 10, 1999

             10.3    First Amendment to Executive Employment Agreement between 
             the Company and Kenneth E. Church dated March 10, 1999

             10.4    First Amendment to Executive Employment Agreement between 
             the Company and Donald L. Mitchell dated March 10, 1999



                                       10
<PAGE>   11

             10.5    First Amendment to Executive Employment Agreement between 
             the Company and Michael P. Haley dated March 10, 1999

             Asset Purchase Agreement, dated as of June 1, 1989, among the
             Company, Maytag Corporation, The BJC Company and The Gunlocke
             Company

             (Previously filed as Exhibit 10(a) to the Company's Current Report
             on Form 8-K, dated as of June 1, 1989, filed with the Commission on
             June 2, 1989)

             First Amendment and Waiver to Asset Purchase Agreement, dated as of
             July 7, 1989, by and among the Company, Pennsylvania House, Inc.,
             The McGuire Furniture Company, The Kittinger Company, Charter
             Furniture, Inc., Brown Jordan Company and The Gunlocke Company, a
             North Carolina corporation, and Maytag Corporation, The Gunlocke
             Company, a Delaware corporation, and The BJC Company

             (Previously filed as Exhibit 10 to the Company's Current Report on
             Form 8-K, filed with the Commission on July 21, 1989, as amended by
             Form 8 filed with the Commission on September 18, 1989)

             LADD Furniture, Inc. Executive Retirement Plan

             (Previously filed as Exhibit 10.4 to the Company's Quarterly Report
             on Form 10-Q for the quarter ended October 3, 1998, filed with the
             Commission on November 13, 1998)

             LADD Furniture, Inc. Management Deferred Compensation Plan

             (Previously filed as Exhibit 4 to the Company's Registration
             Statement on Form S-8, No. 333-68189, filed with the Commission on
             December 1, 1998)

             LADD Furniture, Inc. Long-Term Incentive Plan (1996)

             (Previously filed as Exhibit - 10.13 to the Company's Annual Report
             on Form 10-K for the year ended December 30, 1995, filed with
             Commission on March 28, 1996)

             LADD Furniture, Inc. Long-Term Incentive Plan (1997)

             (Previously filed as Exhibit 10.2 to the Company's Annual Report on
             Form 10-K for the year ended December 28, 1996, filed with the
             Commission April 1, 1997)

             LADD Furniture, Inc. Long-Term Incentive Plan (1998)

             (Previously filed as Exhibit 10.2 to the Company's Annual Report on
             Form 10-K for the year ended January 3, 1998, filed with the
             Commission March 31, 1998)

             Enclosed as Exhibit 10.6 to this Annual Report on Form 10-K for the
             year ended January 2, 1999:

             10.6    LADD Furniture, Inc. Long-Term Incentive Plan (1999)

             Loan and Security Agreement dated as of July 12, 1996, between the
             Company, NationsBank, N.A. (South) as Agent, and each of the banks
             signatory to the Loan and Security Agreement

             (Previously filed as an Exhibit to the Company's Current Report on
             Form 8-K, dated July 18, 1996, filed with the Commission on July
             24, 1996)

             Amendment No. 1 (dated as of August 15, 1996) to Loan and Security
             Agreement dated as of July 12, 1996 among the Company, NationsBank,
             N.A. (South) as Agent and each of the banks signatory thereto



                                       11
<PAGE>   12

             Amendment No. 2 (dated as of October 10, 1996) to Loan and Security
             Agreement dated as of July 12, 1996 among the Company, NationsBank,
             N.A. (South) as Agent, and each of the banks signatory thereto

             Equipment Leasing Agreement dated as of September 19, 1996 between
             BTM Financial & Leasing Corporation B-4 and the Company

             (Previously filed as Exhibits 10.1 - 10.3 to the Company's
             Quarterly Report on Form 10-Q for the quarter ended September 28,
             1996, filed with the Commission on November 12, 1996)

             Amendment No. 3 (dated December 23, 1996) to Loan and Security
             Agreement dated as of July 12, 1996 among the Company, NationsBank,
             N.A. (South), as Agent and each of the banks signatory thereto

             (Previously filed as Exhibit 10.3 to the Company's Annual Report on
             Form 10-K for the year ended December 28, 1996, filed with the
             Commission on April 1, 1997)

             Amendment No. 4 (dated as of July 24, 1997) to Loan and Security
             Agreement dated as of July 12, 1996 among the Company, NationsBank,
             N.A. (South), as Agent and each of the banks signatory thereto

             Factoring Agreement dated August 1, 1997 between the Company and
             NationsBanc Commercial Corporation

             Amendment No. 5 (dated as of October 1, 1997) to Loan and Security
             Agreement dated as of July 12, 1996 among the Company, NationsBank,
             N.A. (South), as Agent and each of the banks signatory thereto

             (Previously filed as Exhibits 10.1 - 10.3 to the Company's
             Quarterly Report on Form 10-Q for the quarter ended September 27,
             1997, filed with the Commission on November 12, 1997)

             Amendment No. 6 (dated as of May 15, 1998) to Loan and Security
             Agreement dated as of July 12, 1996 among the Company, NationsBank,
             N.A. (South), as Agent, and each of the banks signatory thereto

             (Previously filed as Exhibit 10.1 to the Company's Current Report
             on Form 8-K dated May 15, 1998, filed with the Commission on May
             21, 1998)

             Amendment No. 7 (dated as of August 28, 1998) to the Loan and
             Security Agreement dated as of July 12, 1996 among the Company,
             NationsBank, N.A. (South), as Agent and each of the banks signatory
             thereto

             Supplement No. 1 to Amendment No. 7 and Consent (dated as of
             September 25, 1998) to Loan and Security Agreement dated as of July
             12, 1996 among the Company, NationsBank, N.A. (South), as Agent and
             each of the banks signatory thereto

             (Previously filed as Exhibits 10.1 and 10.2 to the Company's
             Quarterly Report on Form 10-Q for the quarter ended October 3,
             1998, filed with the Commission on November 13, 1998)

             Amendment No. 8 (dated as of February 18, 1999) to Loan and
             Security Agreement dated as of July 12, 1996 among the Company,
             NationsBank, N.A. (South), as Agent, and each banks signatory
             thereto

             (Previously filed as Exhibit 10.1 to the Company's Current Report
             on Form 8-K dated February 18, 1999, filed with the Commission on
             February 24, 1999)

             Equipment Leasing Agreement dated as of December 15, 1994 between
             BOT Financial Corporation and the Company

             Equipment Leasing Agreement dated as of December 15, 1994 between
             UnionBanc Leasing Corporation and the Company



                                       12
<PAGE>   13

             (Previously filed as Exhibits 10.1 and 10.2 to Item 7 of the
             Company's Current Report on Form 8-K, dated December 28, 1994,
             filed with the Commission on January 15, 1995)

             Amendment No. 1 dated as of June 7, 1995 to the Equipment Leasing
             Agreement dated as of December 15, 1994 between Unionbanc Leasing
             Corporation and the Company

             Amendment No. 1 dated as of June 7, 1995 to the Equipment Leasing
             Agreement dated as of December 15, 1994 between BOT Financial
             Corporation and the Company

             Amendment No. 1 dated as of June 15, 1995 amending Lease Supplement
             No. One to the Equipment Leasing Agreement dated as of December 15,
             1994 between BOT Financial Corporation and the Company

             (Previously filed as Exhibits 10.2 - 10.4 to Item 6 of the
             Company's Quarterly Report on Form 10-Q for the quarter ended July
             1, 1995, filed with the Commission on August 15, 1995)

             Master Lease Agreement dated as of October 17, 1997 between the
             Company and CoreStates Leasing, Inc.

             (Previously filed as Exhibit 10.3 to the Company's Annual Report on
             Form 10-K for the year ended January 3, 1998, filed with the
             Commission on March 31, 1998)

             Enclosed as Exhibit 10.7 to this Annual Report on Form 10-K for the
             year ended January 3, 1998

             10.7    Master Lease Agreement dated as of December 2, 1997 between
             BancBoston Leasing Inc. and the Company

             Stock Purchase Agreement dated November 7, 1995 between LADD
             Furniture, Inc. and BJCL, Inc.

             First Amendment to Stock Purchase Agreement dated December 29, 1995
             among LADD Furniture, Inc., BJCL, Inc. and BJ Acquisition Corp.

             (Previously filed as Exhibits 2.1 - 2.2 to the Company's Current
             Report on Form 8-K dated December 29, 1995 filed with the
             Commission on January 16, 1996)

             LADD Furniture, Inc. 1997 Management Incentive Plan

             (Previously filed as Exhibit 10.4 to the Company's Annual Report on
             Form 10-K for the year ended December 28, 1996 filed with the
             Commission on April 1, 1997)

             LADD Furniture, Inc. 1998 Management Incentive Plan

             (Previously filed as Exhibit 10.4 to the Company's Annual Report on
             Form 10-K for the year ended January 3, 1998 filed with the
             Commission on March 31, 1998)

             Enclosed as Exhibit 10.8 to this Annual Report on Form 10-K for the
             year ended January 2, 1999:

             10.8    1999 Management Incentive Plan

             Enclosed as Exhibit 13.1 to this Annual Report on Form 10-K for the
             year ended January 2, 1999;

             13.1    LADD Furniture, Inc. 1998 Annual Report to Shareholders


                                       13
<PAGE>   14

             22.    Subsidiaries of Registrant

             American Drew, Inc., a North Carolina corporation

             American Furniture Company, Incorporated, a Virginia corporation

             Clayton-Marcus Company, Inc., a North Carolina corporation

             Kenbridge Furniture, Inc., a North Carolina corporation

             LFI Capital Management, Inc., a Delaware corporation

             LADD Contract Sales Corporation, a North Carolina corporation

             LADD International Sales Corporation, a Barbados corporation

             LADD Transportation, Inc., a North Carolina corporation

             Lea Industries, Inc., a Tennessee corporation

             Lea Industries of Virginia, Inc., a Virginia corporation

             Pennsylvania House, Inc., a North Carolina corporation

             Pilliod Furniture, Inc., a North Carolina corporation

             Enclosed as Exhibit 24.1 to this Annual Report on Form 10-K for the
             year ended January 2, 1999:

             24.1    Consent of KPMG LLP

             Enclosed as Exhibit 27.1 to this Annual Report on Form 10-K for the
             year ended January 2, 1999:

             27.1    Financial Data Schedule (EDGAR version only)



                                       14
<PAGE>   15

                                   SIGNATURES

         Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                  LADD FURNITURE, INC.
                                  (Registrant)

                                  By /S/WILLIAM S. CREEKMUIR             3/26/99
                                     -------------------------------------------
                                     William S. Creekmuir                (Date)
                                     Executive Vice President, Chief
                                     Financial Officer, Secretary, and
                                     Treasurer (Principal Financial Officer)

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>

<S>                                                       <C>             <C>                                        <C>
/s/RICHARD R. ALLEN                                       3/26/99         /S/DARYL B. ADAMS                          3/26/99
-----------------------------------------------------------------         --------------------------------------------------
Richard R. Allen                                          (Date)          Daryl B. Adams                              (Date)
Director                                                                  Vice President, Corporate Controller,
                                                                          Assistant Secretary, and Assistant
/S/THOMAS F. KELLER                                       3/26/99         Treasurer (Principal Accounting Officer)
-----------------------------------------------------------------                                                 
Thomas F. Keller                                          (Date)
Director

/S/CHARLES R. EITEL                                       3/26/99         /S/DAVID A. JONES                          3/26/99
-----------------------------------------------------------------         --------------------------------------------------
Charles R. Eitel                                          (Date)          David A. Jones                              (Date)
Director                                                                  Director

/S/FRED L. SCHUERMANN, JR.                                3/26/99                                                    3/  /99
-----------------------------------------------------------------         --------------------------------------------------
Fred L. Schuermann, Jr.                                   (Date)          Ian J. McCarthy                             (Date)
Chairman of the Board, President, Chief Executive Officer                 Director

/S/ZENON S. NIE                                           3/26/99         /S/L. GLENN ORR, JR.                       3/26/99
-----------------------------------------------------------------         --------------------------------------------------
Zenon S. Nie                                              (Date)          L. Glenn Orr, Jr.                           (Date)
Director                                                                  Director

/s/J. PATRICK DANAHY                                      3/26/99         /S/WILLIAM S. CREEKMUIR                    3/26/99
-----------------------------------------------------------------         --------------------------------------------------
J. Patrick Danahy                                         (Date)          William S. Creekmuir                        (Date)
Director                                                                  Executive Vice President, Chief
                                                                          Financial Officer, Secretary, and Treasurer
                                                                          (Principal Financial Officer)
</TABLE>




                                       15
<PAGE>   16

                                                                             F-1





                          INDEPENDENT AUDITORS' REPORT



The Board of Directors
LADD Furniture, Inc.:


Under date of February 5, 1999, we reported on the consolidated balance sheets
of LADD Furniture, Inc. and subsidiaries as of January 2, 1999 and January 3,
1998 and the related consolidated statements of operations, shareholders' equity
and cash flows for each of the years in the three-year period ended January 2,
1999, as contained in the 1999 annual report to shareholders. These consolidated
financial statements and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year ended January 2, 1999. In connection
with our audits of the aforementioned consolidated financial statements, we also
have audited the related financial statement schedule as listed in the
accompanying index. This financial statement schedule is the responsibility of
the company's management. Our responsibility is to express an opinion on this
financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.


                                       /s/ KPMG LLP

Greensboro, North Carolina
February 5, 1999


<PAGE>   17
                                                                             F-2

                                                                     Schedule II
                      LADD FURNITURE, INC. AND SUBSIDIARIES
                 Valuation and Qualifying Accounts and Reserves
                          (dollar amounts in thousands)


<TABLE>
<CAPTION>
                                                       Charged
                                   Balance at         (credited)                                               Balance at
                                  beginning of       to costs and        Charged to         Deductions           end of
       Description                   year              expenses        other accounts           (c)               year
----------------------------      ------------       ------------      ---------------      -----------        ----------
<S>                                 <C>                 <C>             <C>                    <C>                 <C>  
Year ended January 2, 1999
     Doubtful receivables           $1,229              1,138                  -               (1,124)             1,243
     Discounts                          80                  4 (b)              -                    -                 84
     Returns and Allowances          1,426               (271)(b)              -                    -              1,155
                                    -------             ------           --------             --------            -------
                                    $2,735                871                  -               (1,124)             2,482
                                    =======             ======           ========             ========            =======


Year ended January 3, 1998
     Doubtful receivables           $1,625                781                  -               (1,177)             1,229
     Discounts                          83                 (3)(b)              -                    -                 80
     Returns and Allowances          1,297                129 (b)              -                    -              1,426
                                    -------             ------           --------             --------            -------
                                    $3,005                907                  -               (1,177)             2,735
                                    =======             ======           ========             ========            =======


Year ended December 28, 1996
     Doubtful receivables           $2,553              3,308               (540)(a)           (3,696)             1,625
     Discounts                         123                (40)(b)              -                    -                 83
     Returns and Allowances          1,381                (84)(b)              -                    -              1,297
                                    -------             ------           --------             --------            -------
                                    $4,057              3,184               (540)              (3,696)             3,005
                                    =======             ======           ========             ========            =======
</TABLE>

Notes
 (a) Represents businesses divested or reclassified to businesses held for sale.
 (b) Represents net increase (decrease) in required reserve.
 (c) Represents uncollectible receivables written-off, net of recoveries.