Refacing giant hails the birth of Century 21 Home Improvements.

AMRE Inc. aims to accelerate consumer demand for its professional remodeling services, including cabinet refacing, by joining forces with the nation's largest real estate corporation.

In an industry as heavily fragmented as the professional remodeling field is, AMRE Inc.'s decision to dump Sears as a business partner in favor of Century 21 was blockbuster news.

Dallas-based AMRE, the nation's largest professional remodeling contractor, entered 1996 by ending its 13-year partnership with Sears, Roebuck & Co. and beginning a new 20-year licensing agreement with Century 21 Real Estate Corp. The agreement allows AMRE to market its remodeling services, including vinyl siding and cabinet refacing, as Century 21 Home Improvements.

Robert Swartz, who joined AMRE as president and CEO last July, said the goal of the union with Century 21 is to develop a nationally recognized brand name in what is mostly a business comprised of local remodeling contractors. This will in part be accomplished through an intensive television and print advertising and promotion blitz that builds on the Century 21 name.

The agreement also gives AMRE access to Century 21's data base of 3.5 million home owners to which 40,000 new names are added each month. Sales leads will also be generated through telephone solicitations and shopping mall kiosks of which 110 are already in place. Perhaps most interesting of all, Century 21's army of 70,000 real estate agents will earn commissions for finding remodeling customers.

"Consumers in America like to buy brand names," Swartz said. "By teaming up with Century 21, we are creating the premiere brand for home improvements. Together we are going to consolidate the fragmented remodeling industry by offering a national one-stop concept for home improvements. Use of the Century 21 Home Improvements brand name will allow us to grow substantially in the U.S. and throughout North America."

The switch in allegiance from Sears to Century 21 is the banner headline news for AMRE. Other news of note includes:

* AMRE's acquisition of Facelifters Home Systems Inc. The New York-based company was second only to AMRE as the nation's largest provider of cabinet refacing services, and also was a Sears licensee. (See sidebar on page 69.)

* The acquisition of Congressional Construction Co. of Washington, D.C. This sends a signal that AMRE is continuing to keep an eye open for strategic buyouts and alliances that will further its consolidation plans. Congressional Construction rang up sales of $18 million in 1994 for its vinyl siding, vinyl and aluminum windows and fencing and deck services in the Mid-Atlantic states. The company also is an ex-Sears licensee.

* Forging a sublicensing agreement with Garden State Brickface of Roselle, N.J., to market exterior home products under the Century 21 Home Improvement name. This deal represents the first of many sublicensing agreements that AMRE expects to create in its push to bring established local and regional remodeling contractors under the Century 21 Home Improvements' umbrella.

Expanding the refacing concept

While vinyl siding represents AMRE's core business, Swartz said, "Clearly cabinet refacing is one of the strong product offerings we have that we think can grow substantially in the future."

Indeed, AMRE's commitment to expanding its refacing business is underscored by its recent purchase of Facelifters and hefty capital investments at its manufacturing plant in northwest suburban Chicago.

Combined, AMRE's and Facelifters' cabinet refacing businesses generated more than $110 million in revenues last year. Swartz said he is certain that AMRE is the nation's biggest cabinet refacing service, but added that he does not know how big the refacing market is. "We know that the home improvement industry is growing by about 8 percent annually," Swartz said. "We believe cabinet facing is growing at least as fast, but I have no data to support it."

The Kitchen Cabinet Manufacturers Assn., which monitors the financial pulse of the cabinet industry through its monthly Trends of Business survey, does not track the refacing market. What's more, Dick Titus, KCMA executive vice president, said he knows of no association members involved in cabinet refacing. "KCMA has no information on the size of the cabinet refacing market," Titus said. "The majority of consumers involved in kitchen/bath remodeling appear more interested in obtaining the many advantages today's kitchen and bath storage systems offer rather than a cosmetic short-term makeover of cabinetry that is generally old and outdated. Frequently, new cabinetry can cost less than resurfaced and reconditioned products."

Century 21 Home Improvements would no doubt beg to differ. "Let Century 21 Home Improvements open the door to your dream kitchen ... without the expense, mess and time of remodeling" is the message of a four-color promotion piece that was inserted in newspapers throughout the country in the early weeks of 1996.

"There are many cabinets that have been around for decades that are still structurally sound, but the consumer wants something current and fresh," Swartz said. "Cabinet refacing is a three- to five-day installation process so there is far less mess and disruption to the homeowner. Generally speaking, there are also significant cost advantages. The cost of a refacing job depends on the size of the kitchen; the average price is about $6,000."

Swartz added another advantage of refacing is that the sales presentation is made in the convenience of the prospective customer's home.

What is refacing?

Century 21 Home Improvements' sales literature touts its cabinet refacing program as an "easy" three-step process:

1. Old cabinet doors, drawer fronts, handles and hinges are removed.

2. All exposed cabinet surfaces are covered (refaced) with "beautiful, durable, easy-care Formica brand laminate."

3. New custom-made cabinet doors and drawer fronts, with the customer's choice of handles and hinges, are installed.

Century 21 Home Improvements also can offer replacement countertops, tilt-out trays, pull-out shelves, sinks, faucets, drawer boxes and add-on cabinets. "Basically we can do anything that does not entail changing the layout of the kitchen," Swartz said.

Don Cipriano, director of national manufacturing at AMRE's Arlington Heights, III., facility, said, "Every refacing job is a little different. Sometimes the cabinets are 30 years old and sometimes they are practically brand new but the new homeowner doesn't like their look. We reface everybody's cabinets, from the biggest names in the industry to cabinets made by a woodworking hobbyist. We even reface metal cabinets.

"While there are some standards, for the most part we have to pretty much be able to do any size door up to 24 inches by 66 inches," Cipriano added. "That is the custom nature of this business and precision in both taking measurements in the field and in the plant is a must."

AMRE's cabinet plant

Cipriano said AMRE aims to complete a customer's installation within 40 days of taking the order.

AMRE is in the final stages of a capital investment program at the Arlington Heights plant that has dramatically helped streamline its production operations. Among the key equipment purchases are a Wemhoner membrane press, a Shoda CNC router purchased from Computer Router Services and a Heian CNC router from Stiles Machinery. The company now specializes in profile routing and laminating one-piece MDF cabinet doors instead of making traditional cabinets involving five-piece construction.

"We have recently invested substantial dollars on new equipment to modernize our production process both in terms of productivity and quality," Cipriano said. "It used to take us 18 steps to make a single cabinet door. Now it only takes eight steps. By switching from five-piece door construction to the one-piece vinyl-laminated door, we have eliminated a lot of hand work including prepping, painting, sanding and cleaning, not to mention all of the parts handling in between." Cipriano added that the modernization program has allowed AMRE to sell off much of its manual equipment, which has freed up space in the shop. "Things were packed a lot tighter on the shop floor last year than they are now," he said.

Working from a blueprint of a customer's kitchen, a CAD operator inputs the order into a computer, from which a cutlist is generated. Medium density fiberboard panels, purchased with melamine preapplied on one side, are cut to size on either a Holzma panel saw or an Altendorf sliding table saw.

The dimensioned MDF panels are then precision routed on either the Shoda or Heian CNC router. Both machining centers feature eight machining heads outfitted with diamond tooling from Markay Cutting Tools and twin tables with 5-foot by 8-foot beds. "Because both routers have Fanuc controls, we can machine any part profile on either one," Cipriano said. He added that four standard door styles are offered: square, cathedral, octagonal and arch.

The profiled parts are stacked on handcarts and wheeled into a nearby "clean room," which houses the membrane press operation. Cipriano said the room's ventilating system also provides positive air flow to keep out dust generated by machining operations; the room provides air-conditioned comfort for press workers in the summer.

AMRE's Wemhoner membrane press has a 4-foot by 8-foot capacity and is supported by material handling equipment to allow for continuous operation on a three-minute cycle, Included are three shuttle tables: one to load cabinet doors and drawer fronts on, the second to press and the third to unload. Markay Cutting Tools specially built AMRE's materials handling rack that can hold eight rolls of toil. This eliminates downtime in changing between the eight colors and patterns that AMRE offers, Cipriano said the three most popular designs - blush oak, dark plain maple and white - currently account for 55 percent of customer orders.

AMRE purchases its vinyls from Reneer Films; glue is preapplied on the backside of each roll by Bemis. "When we used to spray glue onto the vinyls we experienced delamination," Cipriano said. "Reactivating the pre-applied glue on the membrane press has eliminated that problem."

The doors, along with hardware from Amerock, Blum and Grass, and drawers supplied by Valendrawers, are shipped by private carrier to the installer. AMRE officials are still in the process of working out definitive distribution patterns between the Arlington Heights plant and the Facelifters plant in Bronx, N.Y., which manufactures five-piece doors.

Big expectations

Cipriano said he was clued in about AMRE's agreement with Century 21 a day before the formal announcement was made. "They sent me a videotape to watch that explained the Century 21 Home Improvements concept. I was immediately impressed because it was perfectly obvious that the affiliation with Century 21 has the potential to bring in more leads, and thus more business."

Shortly after the announcement was made, Cipriano said he gathered a throng of AMRE salespeople at his facility's new training room. "I didn't even watch the video. Instead I just watched the faces and reactions of the salespeople. Within a few minutes of showing the video, I could see them nudging each other. Some started doing calculations and then began to smile. They were realizing that they stood to make a lot more sales."

"We are extremely excited about the future," Swartz said. "As Century 21 Home Improvements we can now sell our entire product range throughout the entire United States, plus Canada and Mexico. I believe the tie to Century 21 will be of benefit to all those who work for AMRE, Century 21 agents and ultimately our customers."

RELATED ARTICLE: AMRE IN A NUTSHELL

AMRE Inc., short for American Remodeling Inc., is far and away the nation's largest remodeling contractor, according to Qualified Remodeler's Top 500 listing of remodeler's (September 1995). AMRE's 1994 sales of $286 million were more than double the second company listed (Pacesetter Corp. of Omaha, Neb.) and greater than the second through seventh largest remodeling companies combined.

According to AMRE's annual report for 1994, vinyl siding accounted for $152 million of its contract sales, followed by cabinet refacing, $71 million; windows, $49 million; and other services, $14 million.

AMRE has 62 offices in 48 markets across the United States and more than 800 sales representatives. The company is listed on the New York Stock Exchange.

For 13 years, AMRE marketed its products and services under Sears, Roebuck & Co.'s name. As of last year, AMRE was paying a 12 percent licensing fee of its total revenues to Sears. AMRE's Century 21 licensing deal calls for a 3 percent fee, subject to certain guaranteed minimums.

The agreement with Century 21 also gives AMRE access to the whole of North America. Because Sears worked with multiple companies, AMRE was restricted to certain territories. In the case of cabinet refacing, selling under the Sears name, AMRE had about 60 percent of the market and Facelifters Home Systems Inc. has nearly all of the rest.

AMRE's entrance into cabinet refacing coincided with its purchase of Cabinet Magic in 1989, a company that was an offshoot of Joy Laminators. Like AMRE, Cabinet Magic marketed its products and services through a license agreement with Sears.

The Facelifters' merger

For all intents and purposes, Sears was - at the very least temporarily - put out of the cabinet refacing business when AMRE acquired Facelifters of New York. Facelifters, which did nearly $50 million in cabinet refacing business last year, operates out of a 75,000-square-foot facility. Unlike AMRE, which recently began manufacturing vinyl-laminated one-piece cabinet doors and drawer fronts, Facelifters makes five-piece doors, according to Don Cipriano, director of national manufacturing for AMRE.

"The purchase of Facelifters was very exciting news to me," Cipriano said. "It was a dream come true to go to the Facelifters' plant and begin sharing ideas. In away, it was like being reunited with a long-lost twin. Now I have someone to share trials and tribulations with, to teach and to learn from. Together we can only get better."