Orman Grubb retools to compete
By Tom Edmonds -- Furniture Today, January 25, 2004
Anaheim, Calif. — Anaheim, Calif.– Intense price competition from imports has contributed to the re-engineering of The Orman Grubb Co.
An office and entertainment furniture specialist that has branched into bedroom, the California manufacturer has retooled its domestic production in order to hit lower retails, and it has embarked on an import sourcing program for its established step-up collections.
The retooled lineup will be on display at the San Francisco furniture market this week.
The company has developed four new collections for its core categories, including a country casual country design available in three heavily-distressed finishes. The other designs are apothecary, casual contemporary and a fresh look at arts and crafts.
"Making my class of merchandise, which is more or less the Chevrolet to Buick equivalent, the price points are getting devalued dramatically," said Jeff Grubb, president. "Our stuff was not as competitive as we needed it to be. We sat down and asked, how do you make something in this factory and still be competitive in price?"
The answer was not an easy one, he added: "When you have a whole bunch of successful groups that are nine years old, it's really hard to walk away from that even though they may have passed their peak."
These new entries are replacing several familiar but declining Orman Grubb groups, but more important, they are priced 20% below the company's previous standards for equivalent pieces. For instance, the new entertainment walls should retail for about $799, and a bedroom suite, including a queen bed, nightstand, dresser and mirror, is priced for a $599 retail.
"Now, we're going to be within $50 of what you can land a container from China, but my customers can buy one or 100 and get it shipped within 16 days," Grubb said. "Once we're close enough on price, we think we'll have more than a fighting chance."
With all faces and tops made of solids and veneers, Grubb believes the company has a value that will stand up to imported competition.
"To knock these costs down, we have relooked at all our material palettes," Grubb said. "We're making it from ash, and we're using our CNC router and moulders so that we have fewer components in each piece while still delivering style and look." And the company has also developed point-of-sale tagging that will tell consumers they are looking at furniture made in the United States.
For the step-up designs that justify higher price points, Grubb is turning to an import strategy on parts that are then assembled, stocked and shipped from the Orman Grubb facility in Southern California.
With imported parts, Grubb said the company is now able to drop prices on existing collections such as Avenue, Victory and Century. "Those are big powerful engines now, and with the drop in price, we'll be able to support greater sales gains," he said, describing per-piece price reductions of at least 10%, some to 20%.
"There's no reason a domestic factory shouldn't be able to stay busy," Grubb said. "We just had to figure out how to do it. We think we have a business model that works. We're going to win."•
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