Furniture source Oakwood Interiors to close
December 28, 2009,
ONTARIO, Calif. — Oakwood Interiors, a case goods resource that has been producing solid wood bedroom sets for nearly 28 years, will cease production in late January.
The company has decided to close in response to one of the most difficult retail environments in memory.
Oakwood is now seeking a buyer for its assets, including designs and equipment associated with the production of its bestselling domestic bedrooms. It plans to discontinue other lesser performers, as well as two of three of bedrooms imported under its Alan Morgan division.
It is selling the third of the bedroom designs, Heritage Manor Cherry, to Martin Home Furnishings, a California-based importer of home office, home entertainment and bedroom furniture.
Oakwood Interiors President and CEO Nick Lanphier said the company decided to cease operations, largely in response to sales declines associated with the closing of some key accounts. He declined to reveal specific sales numbers, other than to say that the company experienced a 28% sales decline on the domestic side in 2009.
Without revealing specifics, he said that imports, which represent about half of sales, are not down as much.
Lanphier, 50, started the business in February 1982 with two other associates. At its peak roughly 12 years ago, it employed 600. That dropped to 450 two years ago and fell again to 100 earlier this year. At present the company employs 25.
Oakwood Interiors is primarily known as a bedroom producer. It got more heavily into other categories such as home office following its 2006 merger with home office and home entertainment producer Creative Ideas. After facing challenges associated with producing both categories, the company exited the home office category in mid 2007.
Initially, Lanphier was the sole owner in the business. In 1984, he sold a 20% stake to Larry Parnell, a company sales and marketing executive who was eventually named president. Lanphier purchased back Parnell's stake before Parnell died several years ago, making Lanphier the sole owner once again.
Lanphier said closing the business was a difficult decision. But while the margins are still good, he said he didn't want to downsize it any further.
"The business has been shrinking," he said. "We lost quite a few of our dealers. Without the sales growth, it's difficult to make any money."
He said the company considered shifting to an all import model, but that the obstacles were more than he wanted to deal with presently.
Today, he is optimistic he will find a buyer for his bestselling domestic groups, which represent about 80% of the domestic sales.
"There is probably someone out there that needs the business in their line," he said, noting that four-piece domestic groups are targeted to retail between $5,000 and $6,000, compared to $3,500 to $4,000 for the imported sets. "The margins are still there. It is just the size of this facility and the cost of the overhead we have isn't supported by the sales."
Gil Martin, owner of Martin Home Furnishings, said he has known Lanphier for years and that the Heritage Manor bedroom was a "natural complement" to Martin's Mount View home office collection. Martin plans to begin shipping the bedroom group from its San Diego distribution center after Jan. 15 and will show it during the Feb. 1-5 Las Vegas Market.
Of Lanphier he said, "Nick's concern for his customers does not surprise me. He's a man of character and with our delivery infrastructure, Oakwood's customers can continue to run Heritage Manor Cherry without interruption."