Cavalier will axe jobs and sell loss-making businesses as part of a major overhaul to reduce debt and restore the carpet-maker's fortunes.
Cavalier interim chief executive Paul Alston said the company planned to sell its Australian carpet tile arm, Ontera Modular Carpet, to US-based Milliken and Co.
"It has been losing us money and we think it's time to exit out of a manufacturing business that's very difficult to make money," Mr Alston said.
Cavalier will also outsource its Australian broadloom carpet warehousing and distribution operations to a specialist provider, which will reduce stock and pave the way for the sale of its Sydney premises.
Mr Alston said a final decision on 20 job losses in New Zealand was expected within a few weeks, mainly in sales and support areas.
"It's part of reducing costs. The profits haven't been where we want [them to be] and we believe that we need to take some costs out of the business, and that's part of the restructure we're doing in New Zealand."
Mr Alston said there were more restructuring announcements to come.
The company had struggled to compete against cheaper synthetic carpet rivals in recent years.
Mr Alston said the restructuring has so far has reduced its net bank debt by about $6 million, mainly due to the inventory reduction programme.
The company also planned to write down between $20 million to $23 million of assets in the year to June.