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Theodore Alexander puts OEM plant on the block

Will de-emphasize OEM business

Powell Slaughter -- Furniture Today, November 21, 2005

HO CHI MINH CITY, Vietnam -- Theodore Alexander has put Saigon Fine Furniture, the high-end full-line manufacturer’s OEM plant here, up for sale or lease in order to concentrate on more profitable business.

Theodore Alexander opened the 425,000-square-foot plant in 2003 to expand its OEM business, but found it had to surrender too much margin to get the sales necessary to fully utilize the facility.

“A recent analysis of our business indicates that as a result, our OEM customers constitute the lowest-margin category of our production,” said Randy Austin, group president of Theodore Alexander. “We therefore are de-emphasizing our OEM business and reducing the number of OEM customers we produce for.”

Remaining OEM production has been moved to the 1 million-plus-square-foot Theodore Alexander factory in Ho Chi Minh City, where 250,000 square feet of warehouse space will be converted to production.
 
“Theodore Alexander continues to grow, thrive and be very profitable, and this move is simply a smart business decision for us,” Austin said.

“We are expanding the part of our business that is the most profitable, and the part that we do best.  We have indeed been going upmarket, particularly with Althorp and Replica, in order to step a bit away from the competition and capitalize on our core competencies.”

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