Oakwood shifts back to solid-wood bedroom
By Thomas Russell -- Furniture Today, January 20, 2008
Ontario, Calif. — A streamlined Oakwood Interiors has returned to its roots in solid-wood bedroom after an unsuccessful merger with home office and home entertainment producer Creative Ideas.
The spring 2006 merger between the two California companies was aimed at expanding each company's domestically produced case goods. But making a broad line of home office and entertainment products in over 20 finishes proved too complicated, said Oakwood President and CEO Nick Lanphier.
Production of the Creative Ideas line was halted in July 2007. As of early December, the company had about $100,000 worth of inventory to sell, down from $250,000 in the summer.
Oakwood is now focusing on its four domestic bedroom groups and has taken steps to become more efficient, including scaling back the plant from 200,000 square feet to about 100,000, Lanphier said. The plant has about 90 workers, down from over 300 following the merger.
The company also has spent about $400,000 to automate production, and moved administrative offices closer to manufacturing. "This makes communication easier," he said.
Oakwood imports about 35% of its mix, or two bedroom groups, through its Alan Morgan division. The future percentages of domestic product versus imports will be determined by sales, Lanphier said, adding that in December, year-to-date import sales were up 10% while domestic sales were down just under 10%.
He wants to keep as much of the domestic operation running as possible. "I feel we're ... flexible enough to keep our domestic manufacturing," he said. "We can find some niches not served by foreign countries."
He cited Oakwood's use of oak, alder and cherry solids, particularly for the tops and drawers of case pieces, as a key advantage. "That is our niche, and we still feel the supply side in the oak business has gone away faster than the demand side," he said.
The company also uses computer-controlled equipment to achieve hand-carved looks in some components, and has cut lead times from eight weeks before the merger to three weeks or less on made-to-order goods. In-stock product is available for immediate shipment.
Oakwood is weighing its marketing options. It hasn't shown in High Point for three years and last showed in Las Vegas in July 2006. Instead, it has focused on showing its product on the road. That could change this year, Lanphier said.
"We would like to grow the business everywhere," he said, noting that while the company has dealers in every state, a hefty 20% of its business is in California. "We are reformulating our marketing plans to start growing the business in a simpler, controlled manner."
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