When it comes to Made in America, retailers report things are looking up on the home front
America loves a comeback story, especially when the odds seem not only long, but near insurmountable.
When the layoffs and plant closings began in the late 1990s, the outlook was dire for domestic furniture manufacturing. By the “double ohs,” more than half of all factory jobs had been eliminated in North Carolina alone and industry pundits were unanimous in their assessment: American companies simply could no longer compete. Blame it on the consumer, they said. A shame maybe, but nobody really cares where their furniture comes from as long as the price is right.
While few would dispute that imported goods continue to dominate the vast majority of sales in the furniture business today, a growing number of consumers are challenging conventional wisdom about whether people care about buying American, and more importantly, whether they are willing to pay more for the opportunity to do so.
Jim McIngvale, owner of Houston-based Gallery Furniture, is among the retailers calling for a rewrite of the domestic manufacturing storyline. Never one to shy from stating his beliefs or to buck trends, Mattress Mack began shifting Gallery Furniture’s assortment away from imported goods 10 years ago. “I was driving through North Carolina and Virginia and thinking about the unemployment rate and the heroin epidemic,” he remembers, “and about how people lose hope when they lose their jobs. I was thinking about how there were people who had made a lot of money in the furniture business and all the people that helped them do it were out of work because their jobs had been shipped overseas. And I was thinking it was almost immoral.”
Today, 90 percent of all the furniture Gallery sells is made in America. While upholstery was relatively unaffected (since most continues to be produced domestically), accomplishing this required raising casegoods prices by 10 to 20 percent across the board. And this is where the plot turns. Sales increased.
“When you go made-in-America you make a stand and you differentiate yourself with a good marketing angle that separates you from the race to the bottom,” McIngvale says. “We raised our price points and there haven’t been any problems. It actually helped our sales. We explain to people that the furniture is solid wood and not particle board. We ask, ‘Is made in America important to you?’ About 80 percent of our customers say that it is, and that it’s why they are shopping with us, and why they wouldn’t consider going anywhere else. We’re proud to support jobs in America at a living wage and we’re constantly reminding customers that made in America is good for jobs, good for the economy and good for America. They understand they are buying something they can be proud of for years and years to come, versus something that smells of formaldehyde.”
Rocky Mountain High
Located in blue collar, energy dependent Casper, Wyo., HFA member Farnham’s Furniture Galleries and Mattress Center features Amish casegood brands like Borkholder, Whittier and Witmer alongside reclaimed timber frame styles from Green Gables and domestic upholstered goods from Flexsteel, La-Z-Boy and Broyhill leather. But owner Chaz Farnham says his focus on featuring American-made goods is something he grew into. “My approach from the beginning has always been to be a mid- to high-end operation with competitive values,” a strategy he embarked on following his initial foray into the furniture business, working for years in the liquidations arena for the legendary Gene Rosenberg, founder of Gene Rosenberg & Associates.
“Working in liquidations, you learn a ton about products, vendors and very quickly what not to do in retail,” the executive says. “While some of it is legit, you’re also buying incredible amounts of inventory to deceive the public by supplementing the inventories of the retailers going out of business. That’s a fact…as we all know.”
The negativity he heard during all the liquidations finally took its toll, and Farnham eventually decided to open his own store in Wyoming, a state of only 600,000 people. I thought, “Just because it’s small doesn’t mean that you can’t do it right,” he remembers.
Along the way there have been plenty of ups and down, particularly in the late ‘90s. “I started sliding away from the importers because it was only about price and product and that’s a tough game to play when you’re not buying containers,” he says. “Then, our customers started asking ‘Who makes it?’ Clients will tell you what they like and don’t like, and in the heartland of America, in the Rocky Mountain West, they like the words ‘American-made.’ In the past two years especially, people have tired of giving money overseas. They are really red, white and blue here and they believe in shopping local.”
Today, American-made product is the clear focus at the 25-year-old, 50,000-square-foot full-line furniture store. And Farnham soon discovered another benefit to his approach: “Most American-made product is not carried in big-box stores.”
That’s a key point for independent retailers according to industry analyst Jerry Epperson, managing director of Richmond-based investment banking firm Mann, Armistead & Epperson, Ltd. “Look at one of the most successful retailers in America, [HFA member] Room & Board based out of Minneapolis, and you’ll find that 95 percent of what they sell is made in the U.S., and the 5 percent that is imported isn’t because it’s cheaper, but because they can’t find anybody in the U.S. to buy the product from. When you focus on American-made product, you’re not going to be competing with the big boys because they don’t sell that product very much anymore. There is craftsmanship to be found in the U.S. and you can find it and create a strong merchandising package that differentiates your store. You’ll also benefit from great service on the product which isn’t always available on imports, and you’ll find you’re appreciated.”
Finding the Chestnuts
Michael Baty, general manager of Chestnut Hall, a better-end retailer located in the Memphis area, has long been an outspoken advocate for American craftsmanship. “Outside of Amish shops, I would say we have succeeded in offering the largest percentage of American-made home furnishings products anywhere. My mandate is to provide the best quality products and best prices that I can for my customers and I try as hard as I can to find those products in the United States.”
Baty, who co-owns the 30-year-old retail enterprise with his sister, says that following the recession, he began paying more attention to the accelerating number of factories and manufacturers closing. “I thought, if there was anything I could do to turn the situation around, I would truly like to do it. So I endeavored to begin taking everybody that works for us to as many domestic factories as I could. I wanted them to see first-hand what goes on there and I don’t think it would be over-stating to say that I really fell in love with American-made products, and the part that is so rooted in our society of what it means to be an American…to be able to make things. Most people will tell you that my generation lost their connectivity to the land, and that grocery stores are where food comes from. The generation after us has lost its connection to tools and making things. I see it in my own children.”
Noting that what he witnessed in his many visits to factories was sometimes gut-wrenching and often tragic, Baty felt driven to try and make a difference. “There’s a limit to what I can do, but what I can, I will,” he decided. “At the end of the day, we have one of two tags on everything we sell, one identifies products as imported, and the other is Made in America. I tell our clients, when you see a tag that says import on it, that’s how it comes, and there are no alterations or sizings possible. But if you see a made-in-America piece on the floor, chances are pretty good that I can get you that same piece in another wood species, other stains and other colors. Really, your choices are near-infinite. I have a refractory dining table on the floor from a father-son team, for example. I can get it any size, drop the leaves or make them bigger, change the leg, the skirt or the finish. As a retailer, that one table becomes any number of tables and that expands the square footage of our floor. But when you have an imported table, that’s all you have: One piece.”
Baty points out that Chestnut Hall was different from the start, “because our background really grew out of a focus on design. We started out offering customizable products from the get-go, because my sister is an interior designer. And the other thing that sets us apart is our focus on knowledge transfer. We have to be extremely knowledgeable about the products and know them inside and out, how they are made and what makes them special, so we can share those stories with our customers. It’s not an incredibly complicated formula, but I think that’s what a lot of higher-end stores miss.”
Inside Chestnut Hall is a store-within-a-store known as The Cabin filled with authentic rustic made-in-America pieces and accessories, along with Native American trade blankets. Best described stylistically as “premium retreat,” Baty says it is designed to appeal to captains of industry, and does, based on the number of whole home installations the company performs around the country.
The executive also works closely with workshops in Amish communities like Lancaster, Pa., and Polk County, Ohio, where many of the people who build the furniture Chestnut Hall offers are direct descendants of the Amish who settled there in 1803. Given the insulated nature of the community, Baty says “part of the magic for us has been working with them on styling products just for us. That’s worked really well for us because when you come into our store, if I didn’t tell you that the products were made by the Amish, you wouldn’t know.” He’s also recently aligned with the more mainstream Borkholder Furniture, a company with Amish roots that has partnered with world-class furniture designers to set its product apart.
Baty’s message to other independent retailers is simple. “If we don’t try and protect what’s left of American manufacturing, it will go away. And I think the important thing for us as a country is to be able to make things, whether it’s B-1 bombers or dining tables. I believe it affects our sense of self.”