ANNA, Ill. -- Bunny Bread Bakeries is closing its flagship operation.

The bakery, which was founded in a log cabin at Anna in 1925 and is now headquartered in Evansville, Ind., announced Wednesday that it would close its Anna baking operations in January.

"We'll continue our sales and service throughout the area and our thrift stores will remain open at Anna and other areas throughout Southern Illinois and Southeast Missouri," said Ann Greenfield, vice president of the firm's human resources. "But, due to marketing changes, the production facility will be closed by Jan. 30."

Between 120 and 125 workers will be affected by the closure.

"There are some heavy hearts throughout our company today," said Greenfield. "The company was founded at Anna, and we regret having to make the decision to close the plant."

Greenfield said production at the plant would be divided among some of the firm's other baking facilities, including Sikeston.

The news of closure is the second bit of bad news for Anna within the past month.

In November Florsheim Shoe announced that the Anna shoe factory, which has been in operation since 1966 and employs more than 300 people, will close in early 1993. Company officials say the Florsheim layoffs would start Jan. 11, with the final layoffs to be completed about the end of February.

Loss of population throughout the area is blamed for the Bunny Bread restructuring. The firm has grown east from its origination point at Anna.

"We did a complete analysis of our marketing territory," said Greenfield. "The population loss in Southern Illinois from Interstate 64 south and from river to river (Ohio to Mississippi rivers) has been surprising. Seventy-five percent of the southern counties have lost population. During the past decade the population declined by 12,500. And several small grocers who use our products have closed."

Asked if any of the workers would be offered transfers, Greenfield said that worker settlements would have to be negotiated.

"Workers would have to apply for jobs at the other bakeries," she said. "All of our bakery operations are union."

Greenfield said the Anna facility would be for sale.

The Anna bakery is the second to close within the past four years, Bunny Bread closed out baking operations at Cape Girardeau in early 1988, with the loss of 70 jobs. At that time Cape Girardeau baking operations were moved to a new bakery at Vincennes, Ind.

Bunny Bread Inc. was founded by three brothers, R.J. "Jack" Lewis, Cotton Lewis and R.C. Lewis, who borrowed $300 to start the business. The brothers baked their bread at night and made deliveries in and around Anna each morning.

A new bakery was constructed at Anna in 1951. The Cape Girardeau bakery was the first branch. Later baking operations were acquired in Evansville and Ft. Wayne, Ind., Murfreesboro, Tenn., and Sikeston, Mo. A new bakery was built at Vincennes, Ind. in 1988.