U.S. case goods manufacturers reopen the door to new business

Companies that previously held off on new accounts in periods of high demand have changed their stance as business has begun to slow

HIGH POINT — Domestic case goods manufacturers that had turned away some business to focus on their existing customer base in the past year or more are starting taking on new accounts again.

That has been the message from several key wood manufacturers whose lead times have been extended over the past 12 months or more due to high demand from retailers around the country. Until now, to keep those lead times from getting too far out, they had either turned away new business or limited the number of new accounts they were willing to ship.

Vaughan-Bassett Furniture had a moratorium on new accounts starting around the middle of last year so it could focus on existing customers. That changed this past spring market when the company told reps they could sign on new business.

“We urged our reps to bring in new accounts at the April market,” company President Doug Bassett told Home News Now, noting that depending on the collection, they may not be able to ship some of these customers until June or July.

A worker seen processing wood boards in the rough end at Vaughan-Bassett Furniture in Galax, Va.

Bassett attributed this change to the fact that the company has recently caught up on its stocking position as business has slowed some, with more than 85% of the line in stock. By the end of May it expects to be higher than 90% in stock with some $16 million in finished goods inventory.

“We think that is a huge advantage as it is what dealers are looking for right now,” Bassett said of the amount of product that domestic suppliers can carry. “They are over-inventoried and business has slowed down. The ability to order one, two or three sets at a time instead of a container is a powerful reason to do business with us… We have made a concerted effort to bring the backlog down and increase our finished goods inventory.”

“Then the trick will be to get orders up a little bit so we are not building excess inventory,” he added. “We don’t want to go too far in that direction either.”

Case goods manufacturer Copeland Furniture has held off on taking on any new accounts over the past year. But having recently added 50,000 square feet of manufacturing space, the company is planning to pursue more new accounts starting this summer and into the early fall.

“That is in line with our production coming on line,” company President Tim Copeland said, noting that he also has seen some leveling off in business. “We are at a point now where we are consistently producing more than we are shipping. But by the fall we will be much more aggressive about picking up new accounts.”

As the company has added capacity, Copeland noted that lead times for special order product have also fallen a week or two right after market, to roughly 21-22 weeks in late April and down from 25 weeks last fall. By comparison, the lead times for bestsellers and priority shipment product produced for inventory — which represents about 40% of the business — is about 12 weeks, compared to as high as 14 previously.

“It won’t be long before we go down to 20 and 10,” he said. “Not only are we quoting the dates, we are hitting them.”

Nick Pickrel, general manager of case goods manufacturer Canal Dover, said the company never really stopped taking on new business during the pandemic, although it has been much more guarded in which new accounts it did take on.

“We had stopped pursuing business and took the foot off the gas when we realized there is more here than we can handle,” he said of the company’s efforts to aggressively seek new accounts. “Last year we had all the orders you could possibly want.”

Woodworking in process at the Canal Dover plant in Millersburg, Ohio.

The company also did not show at the recent April High Point Market as part of an effort to catch up on its backlog, which was at 20 weeks at the end of this month compared to 26 weeks at from mid-2021 until this past January. It expects to lower the backlog to 16-18 weeks by the end of May.

Pickrel said since earlier this year, the company has brought on some more business on the OEM side, which is partly due to an increase in workers. Currently the manufacturer has 55 employees, which is roughly 20% more compared to around this time last year. By the end of this year, it wants to bring on another 10.

Throughput — shipments and capacity — also is up 20-30% compared to this time last year, Pickrel said, which also puts it in a better position to bring on new retail accounts.

“We are getting to that point now where we can bring on some more customers, and we have pursued some larger accounts, he said, noting that while the company is looking to lower lead times further, it also depends on its suppliers.

“We can’t get that way unless we are more vertically integrated,” he said of a further reduction in lead times. “Some of our vendors are out 8-10 weeks. It has to happen for everybody at the same time.”

Not everyone is looking to bring on more new accounts right away. For case goods manufacturer Gat Creek, the ability to do so will occur as it brings on more capacity, including an expansion of its Berkeley Springs, West Virginia, plant that will bring the facility to 140,000 square feet, up from 100,000 today. The company has begun to lay the foundation for the added space and is expecting to receive steel shipments for the building frame soon, said Gat Caperton, president and CEO.

“That will give us the infrastructure to double our capacity,” he said, noting that while a portion of the building will be completed by summer, most of the production won’t come on line until the end of this year.

Caperton said in the meantime, the company has not pursued any new customers and has turned down what he described as non-strategic business.

“We always do a couple of hotels each year and we are not doing them,” he said of hospitality projects. He also add that the company is not pursuing business with retail accounts that it hasn’t worked with previously.

He said with the expansion being completed later this year he doesn’t expect to begin aggressively pursuing new business perhaps until mid-2023. Until then, the company continues to work  through its backlog of roughly 20 weeks give or take.

And while he said he doesn’t like turning down accounts, he said that the company has enough business to keep busy for some time.

“There is not much of a slowdown,” he said of the current state of business. “The new normal has held up and continues to hold up.”

Others who are starting to pursue new business say they too are not immediately concerned about a slowdown as they will still have plenty of work to keep them busy for some time.

“I think we are starting to see a little drop off in orders. One week it is down and the next week it is back up,” Pickrel, of Canal Dover said, adding that he doesn’t think it is anything to get too concerned about at this time despite economic uncertainties including talk of a recession.

He added that as the company seeks new business, it also continues to maintain a balance between its OEM business and its retail business in case of a larger downturn.

A worker seen applying a finish on one of the pieces in the Simply Amish line.

“We have different levers we can pull if needed, and are trying to set it up so we are not all retail and not all OEM,” he said. “We are trying to find a balance there between the two and what best serves our team and employees so if something happens, we are in the best possible position.”

Kevin Kauffman, founder and owner of case goods manufacturer Simply Amish, said that the company never really stopped taking on new business but instead added accounts with some caution.

“We just decided to be selective,” he said. “We have brought in some new accounts that we think will make a difference  and make sure they are good accounts before we bring them on.”

As new business has come to fruition, the company has seen its lead times rise slightly after the April market to 18-22 weeks, up from 16-20 previously. Thus, even with a slowdown, the company expects to be in good shape for much of the rest of the year.

“It will be the fall before we run out of work even if no new orders come in,” Kauffman said of that unlikely situation. “I am sure it is going to slow down though. I have spoken to retailers that have seen slower traffic. We are prepared for that.”

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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