Printer Friendly

Economy: concerns top contract furniture makers.

"The U.S. economy will be the greatest challenge facing not only our industry, but anyone who is in business," said Thomas Spangler, vice president of operations for Executive Furniture Inc. of Huntingburg, Ind.

Last year's WOOD & WOOD PRODUCTS Top 25 survey showed office and institutional furniture manufacturers were most concerned with the slumping state of the economy. A year later, not much has improved in the U.S. economic picture to lessen their worries. In addition to the economy, representatives of the leading companies expressed a concern with maintaining production employee skill levels, environmental issues and mergers.

Surviving a stagnant economy

Only 32% of the companies in this year's survey indicated sales increases from last year's figures, and 20% of the companies lost money, according to figures and information compared with last year's Top 25 survey. This year's survey allowed respondents to offer some suggestions on improving the contract furniture industry. Advice included identifying niche market opportunities and improving fiscal policy.

Vernon, Pa.-based Haskell of Pittsburgh viewed its challenge as maintaining profitability and market share in a slow or no growth economy. "Our plan is to continue to address new opportunities, such as those created by the Americans with Disabilities Act and the San Francisco VDT legislation," said Pamela Grove, vice president of marketing, "and we will offer new products to increase revenues." She also mentioned cost reductions and improved product quality of current lines as goals to meet the challenge.

Trends also are playing a marketing role at Grand Rapids, Mich.-based American Seating. Dave De Marse, director of marketing, said, "There has been a massive downsizing in the white collar, private sector corporations. To adjust to this trend, our strategy is niche marketing that focuses on public sector opportunities."

Identifying cycles and streamlining operations accordingly are what Green Bay, Wis.-based Krueger International is implementing. "In the '70s and '80s, the (contract furniture) industry was in a rapid growth mode," said Terry Bosch, vice president of marketing. "Now that we are in a non-growth mode, our businesses need to be run differently. We're increasing efficiencies and paying more attention on how to improve the bottom line."

Government's role in revising fiscal policies to help revive the contract furniture industry also received some response. "A problem facing the industry is the lack of incentives for commercial real estate development which has had a direct impact on the office products industry," said Bill Wong, director of marketing at Globe Business Furniture of Hendersonville, Tenn. "We must continue to pressure Congress to have a fiscal policy which will put incentives back into business development."

Skilled labor shortage

Behind the economy, 77% of contract furniture manufacturers cited concern for improving production employee skill levels. In a time where layoffs are hitting some manufacturers, other companies are looking at possible alternatives toward keeping skilled labor and finding more cost-effective training programs. For example, Haworth Inc. of Holland, Mich., has formed a labor resource pool that hires temporary help when its forecast calls for an upswing in business. When times are lean, employees are let go. But the employees are told up front their jobs are temporary, for one reason, said Richard Berreth, "Because the furniture business is cyclical ... and full employment is impossible to guarantee."

If machinery is going to replace employees, Haworth also notifies employees with a job elimination notice well ahead of the machinery purchase. Workers are then given an opportunity to find another position in the company. "The result is we end up keeping people we'd be foolish to lose," said Berreth.

Other concerns

A few years ago, environmental concerns, including finishing emissions, wood dust and rain forest issues started appearing in the wake of pressure from environmental groups and government regulation. But with changing trends, environmental concerns, most notably finishing emissions (54%), have taken a distant third in the three most critical areas affecting manufacturers.

Not to say that the environment is being ignored, however. The Knoll Group is monitoring the utilization of woods harvested from sustainable forests. According to Coco Kim, director of press relations, "The Knoll Group has joined with Green Cross Certification Co., the nation's pioneer in the independent certification of environmental claims, to identify timber products produced under stringent, carefully monitored sustainable forestry management methods."

Finally, results regarding mergers and acquisitions also dropped when respondents said only 18% of their companies were concerned with this topic. This is in stark contrast to last year's interest in this area, when 27 major acquisitions and significant interest buyouts occurred between 1985 and 1990 in the contract furniture industry.


WOOD & WOOD PRODUCTS' fourth annual survey of the 25 leading office and institutional furniture manufacturers features 26 this year because of a tie between Panel Concepts and DMI Furniture. The accompanying chart summarizes information for each of the 26 firms including their sales volume, headquarters location, types of products manufactured, material usage and biggest concerns.

Current data for Allsteel, Geiger International, HON Industries, Kimball International and The Knoll Group were not readily available. As a consequence, last year's information is repeated.

Including exports, the 26 companies combined for an estimated $6.9 billion in sales. All but Office Group America offer at least some wood furniture in their product mix.
COPYRIGHT 1992 Vance Publishing Corp.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:includes related article; a survey of furniture manufacturers
Author:Derning, Sean
Publication:Wood & Wood Products
Date:Feb 1, 1992
Previous Article:How Haworth beats a recession.
Next Article:Edgebanders perform through thick and thin.

Related Articles
Economy still top concern of contract furniture manufacturers.
Government regulations top office furniture manufacturers' concerns.
Survey finds cause for optimism.
Residential furniture makers hope to regain momentum.
Confidence soars in 10th annual survey.
Cabinet industry continues growth surge.
Sales strong, but for how long?
U.S. Economy Pushes Wood Products Industry Onward and Upward.
BIFMA's Reardon Discusses Economy's Impact On Office Furniture Sales.
A Rough Patch for Residential Furniture.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters