New Generations doubles capacity
By Gary Evans -- Furniture Today, February 15, 2004
MCKENZIE, Tenn. — Upholstery producer New Generations has purchased a 200,000-square-foot production and storage facility on 30 acres of land here, doubling its manufacturing capacity for its moderately priced seating products.
President Rich Favata said the facility, formerly owned by River Oaks and rescued from bankruptcy proceedings, will support current production and allow the company to add new business. New Generations expects to hire 100 to 150 people soon to add to its payroll of about 420.
"I'm embarrassed to say what we paid for it," said Favata, noting that the property was appraised at $1.6 million but was purchased for less than $100,000 and delinquent taxes (about $200,000). "We got it for a song. Between using what we need and leasing out part of it, we'll add very little to our overhead."
Production workers have been putting in weeks of 50 to 52 hours for the past year to keep up with sales, he said.
"Part of it had to do with space, part of it had to do with getting people. But this will make us a lot more efficient across the board. We've been trying to play catch-up over the past year so hopefully this will put us over the top," he said.
"The pressure for the last 18 months has been on our manufacturing people; now I hope to put it back on our sales and marketing department."
The seven-year-old company makes fabric sofas to retail from $499 to $699 and offers leather at $799 to $999. The new facility, with the capacity for 10 to 12 production lines, joins two other New Generations plants here, one of 60,000 square feet and another at 103,000 square feet.
Favata said the company has room to consolidate all of its production in the newly acquired property but instead will use it for expansion and storage. In addition, some of the space may be leased to raw materials suppliers.
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