Vaughan-Bassett: Made in U.S.A.
By Thomas Russell -- Furniture Today, March 15, 2010
GALAX, Va. —
Of all residential wood furniture sold in the United States, only about 31% is U.S.-made. That makes Vaughan-Bassett quite the anomaly.
The manufacturer, based here since 1919, produces more than 97% of its wood product mix domestically.
And Vaughan-Bassett's emphasis on domestic production set it apart even a decade ago, when 66% of the wood furniture sold in the U.S. was produced here. That was before a wave of low-priced Chinese merchandise flooded the market and shuttered many other U.S. case goods plants.
Company Chairman John Bassett III and his sons have seen the rise of imports and haven't backed down. Instead, they've invested heavily in their plants here and in Elkin, N.C., to produce what they say are the best values possible, domestic or otherwise.
Vaughan-Bassett says it has spent $57 million on equipment and facility expansion in the past decade, including a $14.4 million expansion of its Galax plant in 1999. Today, that facility is close to 1 million square feet, including a 200,000-square-foot warehouse.
Other big-ticket investments have included a $5 million, 400,000-square-foot warehouse in Elkin in 2006 and a $3 million rough-end lumber handling system in Galax in 2009.
Those improvements have included technology that is cutting-edge, in more ways than one. For example, the rough-end system by German manufacturer Weinig uses cameras to detect flaws in boards and calculates how to cut each board based on where the defects lie. The goal is to reduce waste by cutting out only the defects that need to go, and allowing others in certain parts of the wood where it makes sense.
John Bassett, a plant manager for 17 years earlier in his furniture career, chats as easily with plant workers on the production floor as he does with retail executives in their stores.
During a plant tour last year, he was checking the quality of some boards one minute, and the next was describing the new Weinig rough-end system with the authority of an equipment salesperson.
“This is the future of American manufacturing,” Bassett said as he watched the boards move along a conveyor belt. “If we don't invest in this country, we won't make anything. We have to learn to compete. You don't get here unless you want to be here. You have to have a willingness to look and study and learn and try to be more efficient.”
Bassett has been the force behind many of these investments, often traveling with his son, company President and CEO Wyatt Bassett, to shop for machinery. Ironically, since much of the best equipment for furniture production is no longer made in the U.S., they often have to travel overseas to find it.
Vaughan-Bassett is the first residential furniture plant to use the Weinig rough-end, said Chris Aiken, vice president of technology and service at Weinig. It has mainly been used in the cabinet and flooring industries.
Such investments have helped the company create a highly efficient operation that can cut some 3,000 headboards and 2,400 dressers in about a week. Finishing lines run as quickly as 44 feet per minute, about twice as fast as many lines at other U.S. plants, said Doug Bassett, also a son of John Bassett and the company's executive vice president and chief operating officer.
And while its plants may not have as many workers as some foreign counterparts — they employ just over 700, down from about 900 in the early 2000s — company officials believe they have the right people and equipment to do the job.
Master and youth bedroom are at the heart of Vaughan-Bassett's line, with four-piece adult suites targeted to retail between $1,199 and $2,199. In that range, it competes head to head with many importers.
The bulk of the line is veneered product, but it also includes solid-wood groups at the higher end of the price range.
The company offers multiple color options on various groups, a feature often touted by many higher-priced domestic producers. It also carries around $25 million in finished goods inventory and offers seven-day delivery on about 50% of its line through its Vaughan-Bassett Express delivery program. This represents more than 60% of company sales.
“I think John Bassett and his team have done a wonderful job in reinventing their business and making a domestically viable product,” said Jerry Epperson, a principal in Richmond-based research firm Mann, Armistead & Epperson, who knows the company well. “Their model isn't for everybody, but they have proven that it can be done and that you can be profitable doing it.”
Epperson's research is the source of the 31% figure cited above. Based on his analysis, 69% of wood furniture sold in the United States in the third quarter of 2009 was imported.
He said Vaughan-Bassett is doing well with a domestic strategy partly because its Express delivery program, combined with a tight SKU count, lets retailers get merchandise quickly without having to order large quantities. He also attributed the company's success to its sound construction and use of quality materials. These include pine, oak, maple, cherry, ash, poplar, birch and beech, 99% of which is grown and harvested within 500 miles of its plants.
“They make furniture that will last a long time,” Epperson said. “It's a high-value quotient.”
Like other companies, Vaughan-Bassett has felt the effects of the recession and competition from Asian producers. Its sales have declined in recent years.
According to its latest annual report, the company had $85.5 million in sales in 2009, down 12.8% from $98.1 million in 2008. But despite its sales declines, the company remained profitable with net income of $1.9 million or 59 cents per share in 2009.
Soft sales were a factor in Vaughan-Bassett's decision to mothball its Elkin plant in early 2009. It has since reopened that facility, which employs about 50 workers. Its Galax plant employs just over 650.
The success hasn't been without controversy. John Bassett's decision to remain a domestic producer placed him at the center of a push for an investigation in 2004 into the pricing tactics of Chinese wood bedroom manufacturers.
The investigation found that many Chinese producers were pricing their goods below normal market values, which is deemed illegal in the realm of international trade. It also found those unfairly priced goods were largely responsible for the demise of U.S. case goods producers. To help protect the remaining industry, the U.S. government imposed duties on Chinese wood bedrooms shipped to the U.S. market.
Vaughan Bassett and more than 20 other U.S. manufacturers that supported the original investigation have received varying portions of those duties since then. These were originally permitted under the Byrd Amendment, which has since been repealed, requiring the duties collected after Sept. 30, 2007, to go directly to the U.S. government.
According to reports from U.S. Customs and Border Protection, which distributes the funds each year, Vaughan- Bassett has collected nearly $20.8 million in duties since 2005.
Vaughan-Bassett officials declined to comment on how much a factor the duties have been in the company's success.
However, in interviews with Furniture/Today, company officials have said that their strong cash position — the company says it has had no debt since 2002 — has helped them maintain inventory levels and invest in their plants.
Keith Koenig, president of Fort Lauderdale, Fla.-based City Furniture, said he and John Bassett were on opposite sides of the antidumping issue. Koenig favors free trade and doesn't believe the imposition of duties has been good for the industry or the consumer.
Still, he said he has a tremendous respect for John Bassett and his sons and has remained a customer over the years.
“John, Wyatt and Doug have been a great success story, and I think the world of them,” Koenig said, adding that Vaughan-Bassett's “incredibly quick shipping” is a big asset.
“They are smart producers and merchants and … they offer high quality and service,” he said. “It doesn't mean that everything they produce is a home run, but they are very capable of competing on a global level. They have a very good financial foundation and are smart merchants and businessmen.”
Richard Harrison, general manager of Laurel, Md.-based Johnny Janosik World of Furniture, said he has carried the Vaughan-Bassett line for at least six years and thinks it's a great value. Today, about 15 of the 65 bedroom groups on his floors are from Vaughan-Bassett, mainly four-piece sets priced from $1,299 to $1,699.
“They tend to stay on top of the looks,” said Harrison, adding that the profit margins are as strong as on any line he carries. “If they have something that is not working, they get out of it quickly and keep the line fresh.”
-
Vaughan-Bassett furniture still made in U.S.A.
Mar 15, 2010
Kincaid Furniture honors Jimmy and Rosalynn Carter for Habitat work
Specialty retailer LoveSac introduces new store design
Belfort Furniture, Lawrance Furniture are NHFA Retailers of Year
Omnia Furniture ends relationship with Kathy Ireland Worldwide
New contemporary furniture show set for Copenhagen
Featured Company
-
Wright Labels
Bill and Tom Wright founded Wright of Thomasville in 1961 on the idea that printing was a creative medium and the belief that "a promise made is a promise kept." The Wright brothers focused their attention on providing exceptional printing for the... more
VIEW ALL GALLERIES
