Cabinet companies step out of the kitchen.

Cabinet manufacturers are showcasing a variety of styles and looks - for rooms outside of the kitchen and bath.

Ten years ago, sales of cabinets for use in rooms outside of the kitchen and bathroom represented little more than a blip on the industry's radar screen.

Throughout the '90s, sales have steadily increased for other-room cabinetry as marketing has improved to contractors, specifiers and interior designers. Many cabinet manufacturers are using their web sites to showcase available styles and color options.

"Certainly it is a growing trend," says Dick Titus, executive director of the Kitchen Cabinet Manufacturers Assn. "As remodeling has increased, the interest and the opportunities for that market have expanded."

Ten of the 25 largest companies in Wood & Wood [TABULAR DATA OMITTED] Products' 12th Annual Survey of the Cabinet Industry, reported other-room cabinetry sales and several others, including two of the three largest companies, market these products, but did not respond to this question. In all, 18 of 36 cabinet companies say they sell other-room cabinets. Sales of other-room products, which include entertainment centers, bookcases, home-office furniture and utility room cabinets, averaged 3 percent of overall cabinet sales, according to the W&WP survey. This figure is almost certainty underreported by the participating companies. Wellborn Cabinets Inc. of Ashland, AL, for example, estimates that as much as 15% of its $69 million in cabinet sales are used in rooms outside the kitchen, but it has no accurate way to judge these sales and so it did not break out these figures for W&WP's survey.

The numbers are also low compared to industry-wide statistics. F.W. Dodge, the New York-based company that tracks cabinet sales, report that other-room cabinetry makes up about 6% of the U.S. cabinet manufacturing industry. In 1997, 4.9 million other room cabinet units were sold, according to Dodge, and sales are projected to grow 18 percent to 5.8 million units in 1999.

Who's Who 

Other-room cabinetry may be a market haven for custom or semi-custom cabinet companies. Many smaller companies surveyed sell to this market. Product requirements vary depending on what the furniture is used for - will it hold a big-screen TV, computer or bric-a-brac - and custom companies such as Rutt, Heritage and Plain N' Fancy can custom design freestanding, built-in furniture-style cabinetry with these concepts in mind.

"We have a certain selection because we do large production," says Angela Wellborn O'Neill, director of marketing for Wellborn Cabinet Inc. "When it comes down to certain specific needs, customers will then have to go to a custom shop to take care of that."

Mid-sized and larger companies have not conceded this market, however. Companies such as Wellborn, Elkay, Omega, Wood-Mode, Les Care and Aristokraft offer products for other rooms in the house. Aristokraft and its semi-custom division, Decora, says it offers "Fine Cabinetry for Every Room in Your Home." Mill's Pride, which did not participate in this year's survey, is another player in the other-room cabinetry market. The Waverly, OH-based RTA company has targeted home-office furniture, for example.

Distributors USA, newly renamed the Mantle White Cabinetry Group, is a good example of a mid-sized shop selling other-room cabinetry. The Arizona-based company produces bookcases, shelving and furniture for libraries and bedrooms through its Cabinetry by Karman and the Brandom Collection lines. Karman has a special production line that produces 150 to 170 special-order cabinets a day. Brandom has a special custom cabinet production line called Pinnacle that offers other room furniture, says Steven White, president of the Mantle White Cabinet Group. "Other-room cabinetry is growing quite a bit for us," White says.

Some companies have always sold to this market, even if it wasn't tracked. Wood & Wood Products first asked cabinet companies if they sell other-room cabinetry in its second survey of the cabinet manufacturing industry in 1989. At that time, 18 of the top 25 companies said they sold cabinets for other rooms. (Many of those companies have since merged or gone out of business.) Bookcases and shelving were most mentioned, followed by desks, hutches, storage units and wet bars.

How Cabinet Companies Compete

Outside of the kitchen, residential furniture makers reign. Cabinet companies compete by offering a lower-cost product that can come in a number of different looks.

Tess Guiliani, CKD, a designer who won an award for other-room cabinetry at the Kitchen/Bath Industry Show in Chicago in 1998, says: "There is so much fine cabinetry, that you can take what they are offering and adapt it to something beautiful and freestanding. There is a great call for furniture-like cabinetry in family rooms, libraries, bedrooms and certainly in home offices." However, consumers want unique looks, not the "extra cabinetry that came with the kitchen," Guiliani adds.

Cabinetmakers are specialists in storage and storage designs, Titus adds. With that expertise it is just a "natural step for them to apply it to family rooms. libraries and the bedroom," he says.

Cost may be a deciding factor among buyers. Producing residential furniture of ten requires more work by the manufacturer than does a cabinet box, White says. "Whenever a contractor puts in a library or entertainment center and they price it out, they find we are substantially less expensive than furniture," White says.

Relationships with Contractors

Many cabinet companies benefit from their close ties with contractors and specifiers - two groups that often are involved in purchasing cabinets for new construction or remodeling jobs. "Contractors, architects and interior designers account for much of this business for cabinet companies," Titus says.

For homeowners who are remodeling, purchasing other-room cabinetry may allow them to bundle the cost into home-equity loans. "One of the main advantages that we are seeing with these products is builders are encouraging owners to buy cabinets to improve their home equity loan," Wellborn says.

Cabinet companies are placing more of an emphasis on marketing other-room cabinetry as well. While other-room cabinetry played a limited role at K/BIS in Chicago in 1998, it is expected it will play a bigger role at K/BIS in Orlando this April. "Manufacturers will be displaying entertainment centers at the kitchen and bath show," Titus says. "They are using them as an eye-catcher to get people into their booth."

1998 Best Year Ever for Many; 1999 May be Better Still

Nearly 45 percent of cabinet manufacturers surveyed say they had their best years ever in 1998, according to Wood & Wood Products' 12th Annual Survey of the Cabinet Industry.

Forty-four percent say they had a very good year in 1998, according to the survey responses by more than 30 of North America's largest cabinet companies.

1999 may be even better. Almost a quarter of the cabinet companies surveyed say they are predicting their best years ever in 1999. Another 58 percent say they expect to have a "very good" year this year.

The good health of the cabinet industry is corroborated by a Kitchen Cabinet Manufacturers Assn, membership survey which shows that cabinet sales were up more than 12 percent in 1998. The KCMA predicts that 1999 will flirt with 79 million units sold, a record. "The cabinet industry has recorded 33 consecutive months of growth in sales since the winter of 1996," Titus says. The longest period of steady industry growth was a 61-month run from November 1982 to November 1987. "Both stock and custom manufacturers averaged double-digit growth for 1998," Titus adds.

Despite the positive outlook, the economy is a concern for many of the cabinet companies that were surveyed. While just 3 percent are extremely concerned about the economy, 37 percent of those surveyed say they are very concerned about it (see Concerns, page 54).

About the Survey

Wood & Wood products mailed out copies of the 12th Annual Survey to cabinet manufacturers believed to have posted at least $10 million in sales last year. Executives for 36 companies responded to the survey. Information on how they feel about their business in 1998 and 1999 can be found on page 51, concerns on page 54 and other highlights on page 60.

W&WP gratefully acknowledges the assistance of the executives who participated in this year's survey. Companies interested in taking part in next year's survey should contact Larry Adams, senior editor, (800) 3432016; fax [phone].

Cabinet Divisions of Top 25

MASCO CORP.

AlmaKuchen Alvic Amera Berglen Fieldstone KraftMaid Merillat Moores Quality Cabinets StarMark Texwood Woodstar

MASTERBRAND CABINETS

Schrock Cabinet Co. MasterBrand Cabinets Aristokraft Inc. Decora

OMEGA HOLDINGS INC.

Kitchen Craft of Canada Ltd. Omega Cabinets Ltd. HomeCrest Cabinetry

ELKAY MANUFACTURING CO., CABINETRY GROUP

Yorktowne, Inc. Medallion Kitchens of Minnesota, Inc. MasterCraft Cabinets, Inc. Westwood Custom Cabinetry, Inc.

TRIANGLE PACIFIC CORP. (a division of Armstrong World Industries)

Triangle Pacific IXL Cabinets Bruce Cabinets

RSI HOME PRODUCTS

RSI General Marble Lamco

NORCRAFT

Mid-Continent Norcraft Cabinetry

REPUBLIC INDUSTRIES, INC.

EuroCraft

MANTLE WHITE CABINETRY GROUP

Cabinetry by Karman Brandom Mfg.

Other respondents

Dura Supreme                          $27.2
Howard Lake, MN

Grandview Products Co.                $26
Parsons, KS

Rutt Custom Cabinetry LLC             $26
Goodville, PA

Heritage Custom Kitchens              $25
New Holland, PA

Legacy Cabinets LLC                   $21.5
Eastaboga, AL

Mouser Custom Cabinetry               $20+
Elizabethtown, KY

Evans Cabinet Corp.                   $20
Dublin, GA

Jim Bishop Cabinets Inc.              $16.1
Montgomery, AL

Commercial Wood Products Co.          $16
Adelanto, CA

Plain 'N' Fancy Kitchens Inc.         $14.5
Schaefferstown, PA

Grabill Cabinet Co. Inc.              $14.2
Grabill, IN

Oak Craft Inc.                        $13.5
Peoria, AZ

Canac Kitchens                        N/A
Thornhill, Ontario

Employee Skills Lead Cabinet Industry Concerns

The skill level of employees is the biggest concern for three-quarters of the cabinet companies surveyed in the 12th Annual Survey of the Cabinet Industry.

Seventy-two percent say they are very or extremely concerned about the skill level of their employees. Recruiting and retaining employees, a separate category, is named by 66 percent as something they are very concerned about.

These labor issues run across the survey, for large and small companies, Alex Calabrese, president of RSI Home Products, a $174 million company, says: "Recruiting capable personnel to SuStain growth," is his company's biggest challenge.

Chino, CA-based Eurodesign, a mid-sized cabinet company with $31 million in sales, is also feeling the employee [TABULAR DATA OMITTED] crunch. To attract and keep employees it is looking to improve benefits and wages, and offer formal training. "At the rapid rate we are growing, finding qualified personnel in management, as well as skilled labor for production, remains the gravest challenge facing our company," says Fariba Shaygan.

Government regulations are also a major topic of concern. Finishing regulations are cited as a major concern by 66 percent of those surveyed and and wood dust is cited by 51 percent. "Present and future government regulations may be the gravest challenge we have ever faced," says John Fairis, chief financial officer of Wood-Mode Inc. "The possible cost of compliance could destroy our industry."

[TABULAR DATA OMITTED]

W&WP Cabinet Survey Highlights

1998 SALES totalled more than $4.18 billion with an average of $109.9 million for the companies who participated in the 12th Annual Survey of the Cabinet Industry.

Of the Top 25, sales totaled $3.9 billion with an average of $156 million.

Other highlights include:

* Frame cabinet sales continue to dominate, capturing nearly 85 percent of the market.

* The Kitchen is where most cabinets are installed, according to W&WP's survey. Nearly 85 percent of the cabinets produced by those surveyed went in kitchens.

* The boom in housing starts is reflected in the survey. Cabinets sold for use in new homes Topped 50 percent, despite KCMA statistics that show more cabinets are sold for remodeling than for new construction.

* Among the companies in this year's survey, more cabinets are sold through kitchen and bath stores than anywhere else. In this year's survey, sales to kitchen and bath stores are 46 percent Sales to contractors are another quarter of the market.

News at the Top

Here are a few highlights from the past year for some cabinetmakers.

Masco bought Heritage Bathrooms PLC whose annual sales are approximately $40 million. KraftMaid Cabinetry, a Masco company, appointed Tom Chieffe as president in December Consumers Digest gave KraftMaid a "Best Buy" Designation for all its product lines. The American Society on Aging honored KraftMaid's Passport cabinetry with its Outstanding Design for Mature Consumers 1998 Award. Today's Homeowner magazine awarded KraftMaid's Passport series of accessible cabinetry its 1998 Best Products award

Fortune Brands, owners of Aristokraft, purchased Schrock in 1998.

Mill's Pride chose Pennsylvania to build a new high-tech, hardwood manufacturing plant.

American Woodmark Group purchased Amende in 1998. It expanded plants in Georgia, Virginia and West Virginia. The company introduced a white thermofoil door and tested its Flat Pack ready-to-assemble cabinet line.

Omega Holdings Inc. acquired Kitchen Craft of Canada, Ltd., the largest manufacturer of semi-custom cabinetry and the second largest cabinet producer in Canada.

Yorktowne Inc., part of the Elkay Cabinet Group, had the largest new product introduction in its history. Products include new glazes, door styles, an all-wood cabinet, and mix 'n' match door styles on multiple boxes.

Triangle Pacific Corp., and its flooring division, were purchased by Armstrong World Industries for $1 billion.

Cardell Kitchen & Bath Cabinetry completed installation of a new paint line and catalytic oxidizer to control emissions in 1998. The company plans to complete an expansion program at its San Antonio, TX, plant.

Wood-Mode Inc. consolidated its ownership and management. Robert Gronlund, chairman and CEO, and Ted Gronlund, vice-president, are now the sole owners.

Pfingsten Partners acquired Norcraft Cos. Inc. in 1998.

Republic Industries Inc. added Eurocraft Inc to the Republic Companies. The purchase adds frameless cabinet capacity to Republic's product line.

McConnell Cabinets Inc. added a kitchen cabinet product line and re-engineered its facilities and infrastructure.

Distributors USA changed its name to Mantle White Cabinet Group. Mantle White owns Karman Kitchens and Brandom Mfg. Co.

Canyon Creek Cabinet Co. moved into a new 196,000-sq.-ft. plant, added new equipment, a new finish facility and increased sales 20%.

A state-of the-art automated finishing line was completed in 1998 by Eurodesign Cabinets, Inc. The company also completed a purchase of an additional five acres of land to build another facility to manufacture laminate flooring.

Huntwood Industries had a record year in sales. The Spokane-based company invested in excess of $800,000 and implemented a continuous flow manufacturing system.

Heritage Custom Kitchens present ed a new product in January. The "St. Charles" line followed the October 1998 showing of the Winterthur brand.

Jim Bishop Cabinets Inc. is considering an automatic spray finish line and looking to expand its facility to allow room for further automation.

Cannon Valley Woodwork Inc has purchased the assets of 124-year-old Brammer Co Details of the March 1 acquisition were not released.

- Deborah Guske

Deborah Guske contributed to this report.