Brown Street, Vermont Tubbs suspend operations

Thomas Russell -- Furniture Today, July 16, 2012

WHITEFIELD, N.H. - Jointly owned bedroom furniture producers Brown Street Furniture and Vermont Tubbs say they have suspended operations amid financial difficulties resulting from a lack of capital.
     However, company owners Kyle and Adam Tager are in the process of raising capital to restart manufacturing, Kyle Tager told Furniture/Today.
     One possibility is through a federal EB-5 visa program that allows foreigners to become U.S. citizens if they invest in a U.S. company, he said. If the program is successful, it could help reopen the manufacturing operation by the fall, said Kyle Tager.
     He said the closing wasn't part of a bankruptcy proceeding. Management, not the banks, decided to suspend operations, with the last of 45 remaining workers clocking out on July 10, he said.
     "Adam and I are deeply saddened to have to suspend the operations, which we have worked so hard over the last four years to sustain and build," Tager said. "We are sorry to disappoint our customers and suppliers, but also our employees. But we look to recapitalize and resume the business in the fall."
     Kyle and Adam Tager acquired Brown Street Furniture in January 2008 and six months later acquired certain assets of Vermont Tubbs, although not its plant and equipment in Brandon, Vt.
     Consolidating the two companies - including the merging of 300 SKUs of Vermont Tubbs product into the Whitefield plant - was a big challenge. Management and workers completed the task over time, and by the summer of 2009 the companies had converted from a build-to-inventory model to a build-to-order production model. As part of that transition, it also had converted to a lean manufacturing process.
     Despite those efforts, the company remained undercapitalized at a time when it was trying to sharpen its lead times and improve its ability to serve customers with a custom-focused domestic manufacturing model.
     "We merged these two product lines in the summer of 2008 and the great recession formally began in the fall of 2008, so we suffered from what appeared to be a perfect storm," Tager said.
     Brown Street primarily has produced traditional style bedrooms in cherry, maple, white ash and pine. Vermont Tubbs has taken a more transitional and contemporary approach, producing in solid birch and ash. A typical four-piece set from Brown Street retailed at $3,000, while Vermont Tubbs was closer to $4,000.
     Due to the shutdown, Tager said the company has been unable to complete all orders and has notified the affected customers that "their orders will be cancelled and put on hold until we resume production."
     Peggy Burns, an owner of Acton, Mass.-based retailer Circle Furniture, said she hopes the business can reopen and get back on its feet. She said her company has been a customer of Vermont Tubbs since the 1980s.
     "It's kind of sad - we have been a customer of Vermont Tubbs since their inception," she said. "They have had a tumultuous history over the years, but we have had some great success with them.... When I came into the business, it was one of our biggest vendors. There is an emotional attachment to it."
     Customers liked the furniture and sought it out, even though lately it had been taking 16 weeks for the manufacturer to fill orders, Burns said.
     "The quality was always simple, but it was so well built," she added. "I give those guys (Kyle and Adam Tager) credit for trying it in the first place. They put their hearts and souls into it.... I am rooting for them."