70-year-old Sauder holds steady in difficult market
By Tom Edmonds -- Furniture Today, April 18, 2004
ARCHBOLD, Ohio — Sauder Woodworking is marking some significant milestones this year.
Perhaps most importantly, founder Erie Sauder was born 100 years ago this August. He was the man who, 70 years ago, started a woodworking business in the barn behind his home in this small town in the northwestern corner of Ohio.
That business grew into what is now the sixth-largest U.S. furniture manufacturer and the largest producer of ready-to-assemble furniture.
Another cause for celebration — although it won't happen because the company is run by people who don't like to toot their own horns — is Sauder's survival and growth in the past few years.
During a very difficult period for flat-pack furniture producers, while longtime rivals have faced significant sales declines and even filed for bankruptcy protection, Sauder has held steady, maintaining its annual RTA sales at about $500 million, which now represents about 25% of the U.S. market.
In a fast-paced game of musical chairs, Sauder has managed to find a comfortable chair every time the music stops. In particular, the company has found a way to grow its business in the strongest channel for RTA furniture, the discount channel that includes Wal-Mart and Target.
Kevin Sauder, third-generation president and CEO, said the RTA business has changed tremendously in recent years. And with fewer and fewer retail customers, the new model is not as reliably consistent as the one that fueled 30 years of steady growth.
"I think we're going to have to be very creative in our product development and our operations or it all could go downhill," Sauder said.
One new operating requirement is to be more flexible in manufacturing, with shorter runs. "We want to be good at running medium-size lots, not just the giant runs we grew accustomed to," he said.
The company also has taken several bold steps toward insuring its long-term survival and prosperity, acquiring two companies that represent the "bookend" forces that have been putting a squeeze on the domestic RTA business.
With the Progressive Furniture purchase two years ago, Sauder staked a claim in the Asian-import gold rush that has pushed retail prices on assembled case goods lower and lower.
And with the acquisition of Studio RTA last year, the company found a way to participate in RTA importing, which has taken over a huge chunk of the promotional domestic market and which is now pursuing higher price points.
Sauder, which already exports to more than 60 countries, also is investing in international markets. Earlier this year, the company said it is setting up a 60,000-square-foot factory in Uberaba, Brazil, which will give it better access to the growing markets of Latin America. On top of that, the company has started importing Italian veneer designs for retailers, such as Sam's Club, that want to add another dimension to the RTA value story.
All of Sauder Woodworking's divisions now represent more than $700 million in annual furniture sales, and while a question mark hangs over much of the domestic RTA industry, it's less threatening to the diversified Sauder.
"Instead of focusing only on what our factory can make," Sauder said, "we are looking at what our customers want. We will make it or source it, but we will provide it. We have become a much different company."
-
Ashley to open stores globally
May 23, 2012 -
Ricci revives DeCoro
Dec 7, 2011 -
Stylish, high-end goods break rustic stereotype
Mar 9, 2008 -
Stylish, high-end goods break rustic stereotype
Mar 9, 2008
Featured Company
-
Wright Labels
Bill and Tom Wright founded Wright of Thomasville in 1961 on the idea that printing was a creative medium and the belief that "a promise made is a promise kept." The Wright brothers focused their attention on providing exceptional printing for the... more
VIEW ALL GALLERIES
