American Furniture aiming to rebound with improvements
Larry Thomas -- Furniture Today, April 24, 2013
HIGH POINT - Promotional upholstery producer American Furniture Mfg. has been a bit of a problem child for its publicly traded parent company, Compass Diversified Holdings, in recent years, and no one is more aware of that than American's new management team.
Al Wiygul, the former Bauhaus USA president who was hired as CEO in November, has seen the spreadsheets that show sales falling from $137 million in 2010 to $91.5 million last year - while racking up operating losses that were exacerbated by the write down of various intangible assets.
But Wiygul, whose 40-year furniture industry career also has included management posts at Berkline, Bassett, Stratford and Washington Furniture, is convinced the red ink won't be needed much longer.
In his six months at the helm, he already has implemented numerous operational improvements at the Ecru, Miss., factory, and directed a redesign of a significant portion of the product line.
"Our values are what's appealing to the customer, and that's not going to change," he said. "But I think people will see that we're starting to improve our customer service and offer styling that's more up to date."
One of the biggest service issues, Wiygul said, was the company's inability to accurately "flow" its cut-and-sew cover kits that are produced in China. That led to production delays due to out-of-stock covers, which led to delayed and missed shipments - and some very unhappy retail customers.
However, Compass brought in a consultant last fall to work with American on the problem, and Wiygul said the improvements implemented via a new computerized order- tracking system already are evident.
Wiygul and his management team were especially pumped after last month's High Point Premarket - it was the first time American had opened its showroom doors at the event, a preview of the High Point Market - noting that retailers responded favorably to the new products and the remodeled exhibit space.
The 3500 sectional is one of a dozen stationary upholstery pieces American Furniture Mfg. is introducing in High Point.
"We got a lot of feedback that was very positive," he said. "Hopefully, that will translate to the end consumer."
Randy Spak, another furniture industry veteran who was hired as vice president of sales in December, said the company's strengths remain at the $399 and $499 retail price points for stationary sofas and $699 to $799 for motion sofas. Plus, the company is hoping to capitalize on the continuing popularity of reclining seats to improve its recliner business at $299 and $399.
"Our values are going to be the same as they always have, but all of the back-end operations will be better," said Spak.
Although Compass' status as a public company prevents Wiygul and Spak from discussing specific sales numbers, they said they believe the turnaround should pick up steam in the second half of the year.
Compass is expected to announce sales for the first quarter, which ended March 31, in early May.
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