NEW YORK— Although Made in the USA has meant the development and reshoring of manufacturing in the U.S., ideas surrounding the concept have evolved to a point when it can be fairly said that the growth of domestic production, in the case of ready-to-assemble furniture, can be buttressed by a company’s international operations.
Another critical factor thrown into the mix was the rise of e-commerce. RTA furniture producers have become adept at fulfillment and their capacity to drop ship stood them in good stead during the COVID-19 outbreak.
The growth of RTA furniture manufacturers into multifaceted producers able to tap diverse sources was critical to the response to the pandemic. Of course, tariffs and related political issues already had encouraged those manufacturers to rethink their supply chains and what dependency they had on China.
The evolution of the segment in the U.S., even if it couldn’t anticipate coronavirus, had been proceeding through a problematic period from one perspective, especially as regards tariffs, but the period of difficulty translated into opportunity for RTA manufacturers that already had addressed sourcing, inventory and fulfillment issues in ways that allowed them to accommodate surging demand from housebound consumers.
Yet, even though the general trends affect all the companies in the RTA sector, each of the major suppliers who are manufacturing here has taken a unique path that has led it to become increasingly sophisticated in terms of consumer behavior, marketing and merchandising.
In January, Novacap, a Canadian private equity firm, struck a deal with Bush Industries ownership that resulted in the Jamestown, NY-based RTA producer’s combination with Bestar, which has manufacturing operations in Quebec. Both companies had developed strong e-commerce operations that could drive even stronger growth by leveraging resources, capacities and expertise.
The combined Bestar-Bush company started 2020 strong by continuing to grow sales through e-commerce to an extent that the company’s Jamestown plant, reopened after a temporary closure, began looking to add employees, Mark Weppner, svp/marketing, design and engineering noted. Although the Jamestown plant was closed for a few weeks, Bush distribution centers in Erie, PA, and Sacramento, CA, remained open to feed growing sales.
Companies that have grown comfortable with remote work during the COVID-19 crisis will, Bush expects, prompt further home office sales growth as many employees get a chance to work from home permanently.
“We’re also anticipating many office redesigns in the near future to focus more on giving employees personal space,” Weppner said.
“Our immediate need for additional staff will be in manufacturing, but we expect to add more office positions to continue to drive our e-commerce business,” Weppner said. “This is an exciting time of growth for our company, and we’re thrilled to continue our long history in Jamestown and to add to our team here.”
Sauder Woodworking has taken a measured approach to how it is manufacturing overseas and at its Archbold, OH, facilities.
“We have been very intentional with regards to producing both domestically and in Asia,” said Brent Gingerich, Sauder evp/sales and marketing. “We feel like one of our benefits is the ability to mitigate some risk by having both options. Initially, we simply made mixed material collections and chairs in Asia and everything else in Ohio. We have developed many more options so that now we can look at each opportunity and see where we get the best fit.”
Because it was prepared for contingencies such as Lunar New Year, Sauder entered the coronavirus crisis as it emerged in China and the U.S. with the ability to respond.
“Fortunately, we always keep a large amount of inventory in our Ohio and California warehouses,” Gingerich said. “Our import team also did a nice job of loading up prior to Chinese New Year so when COVID-19 hit we were in pretty good shape. We also have a long history with the office category and our portfolio reflects this. Our Ohio factory was closed for six weeks but the warehouses were able to continue shipping. Our e-commerce business has been very strong for the past several years, but it jumped to another level during this time. Many of the mass merchants stayed open and continued to sell furniture also during this time, although it was at a reduced level. Our Ohio factory has been back up for just over a month and is working hard to keep up with the strong demand and eventually replenish our warehouses.”
The advantage of flexibility, both in manufacturing and how to reach consumers, whether through stores or digital platforms, with all the attendant support required to ensure the best outcomes in both channels, will play a significant role in how RTA furniture producers get the most out the opportunities arising through the pandemic.
“We continue to see strong demand on both the domestic and import product,” Gingerich said. “E-commerce continues to be very strong but stores have bounced back the past several weeks also. I do believe that online retail has jumped ahead by several years and work at home is going to be a reality in the future. I think for those of us in the furniture industry, this is a huge opportunity and not really a threat.”
