Vermont Tubbs reworks its strategy
Under new leader Houston, company drops 40% of its line
By Jeff Linville -- Furniture Today, February 3, 2003
Brandon, Vt. — Bedroom furniture manufacturer Vermont Tubbs has faced tough business and financial challenges in the past year, but is fighting back with a revamped line and a new leader.
Six months ago, parent company Carris Reels named industry veteran Lee Houston as president of Vermont Tubbs, succeeding then-general manager Harold Anderson. Houston had worked for Ladd and was a consultant who promoted "lean manufacturing" to U.S. companies competing with imports.
Under Houston, 163-year-old Vermont Tubbs has taken drastic steps to increase profitability.
"We had to make some very hard business decisions," said John Vogel, manager of sales and marketing, who has been with the company throughout the management change.
A big step was discontinuing about 40% of the product line. Most pieces were slow sellers, Vogel said, but not all. "Some of those products were hot sellers, but we were losing money on them."
This isn't the first time Vermont Tubbs has reinvented itself. The company was founded as a producer of bentwood ash snowshoes and skis in 1840 and later added dogsleds. In 1928, Admiral Richard Byrd's Antarctic expedition used its products.
About 30 years ago, aluminum and alloy models were replacing wooden snowshoes, so the company took the bold step into furniture, using its expertise at steam-bending solid ash in its furniture designs. The company still steam-bends many of its components, which according to Houston makes a much stronger piece than joinery could create.
Vermont Tubbs' annual sales top $20 million, with 60% in adult bedroom and 40% in youth, he said. It builds high-end goods, mainly in Shaker, transitional and cottage styles.
"We use 100% ash, which is an New England/upper New York State wood," said Houston. Vermont Tubbs remains committed to domestic production despite obvious challenges, he added.
"So much is coming from offshore, it's changing the marketplace," Vogel said. People used to say they wanted American-made goods, he said, but adult and youth bedroom furniture has become very price-sensitive.
Houston isn't convinced that imports are the best solution for manufacturers in the long run. Yes, import quality continues to improve, but he believes many offshore factories are only able to keep costs low now because of government subsidies, which may not last forever. He said that at a Chinese plant he visited in 2001, for instance, about two thirds of the wages were paid by the Chinese government.
"These governments are willing to buy market share until their dominance is assured," Houston said. At some point, the leaders could pull that funding and force factories to raise prices to support themselves, he believes.
Another important point, he said, is that foreign manufacturers are learning more about the North American furniture industry and how to import and are expanding their direct-to-retailer container business. U.S. manufacturers switching to import sourcing might be cut out of the loop, he said.
In developing a business plan for Vermont Tubbs, Houston chose three strategic goals: (1) find a niche and get better at it so the company is less vulnerable; (2) provide a service no one else can match, such as Vaughan-Bassett's ability to ship product anywhere in the United States in a week; and (3) export its goods to be competitive on an international basis.
One niche the company has is in solid ash, Houston said. "In China, 80% of the wood comes from the United States or New Zealand, so there is one place you can pick up a slight advantage."
With Houston in charge, Vogel feels confident the company is headed in the right direction. To generate excitement, the manufacturer plans several new items for the April High Point market, including three adult bedroom suites and a youth group.
