The move follows a downturn in repeat orders over the past six months because of poor summer weather combined with the general weakness of the wider economy.
The West Yorkshire-based company is hopeful of better sales after diversifying to incorporate its timber-framed house business. Plans include manufacturing wooden office-garden buildings at the firm's 5,400sq m manufacturing site.
The Smith family has bought out the management team's assets and business of Peter Smith Garden Furniture, which called a creditors meeting with a view to going into voluntary liquidation.
Shareholder Sharon Sheard said: "Poor trading over the past six months and declining repeat orders has forced us to restructure. We couldn't meet our payments, but we now have cash from other sources to kick us off and get us going."
She said imports of bird stations from China had affected the sales of the firm's premium products: "There's still a market, but it's a luxury item and the public is not spending."
Flatpacking items would save transport costs, she said.
"Everyone in our situation supplying garden centres is struggling, with no repeat orders at the moment. With our overheads and lack of orders, something had to give. We are looking positive now for 2012. We've made a lot of provisions over the past few months."