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Trendway A Partner With European Firm
HOLLAND — Trendway Corp's. joint venture with a European seating company will enable the firm to greatly expand its seating line and finally offer a "complete product package" to customers.
Under the deal signed June 17 at NeoCon, Interstuhl Buromobel GmbH gets instant access to the lucrative U.S. market that it has been unable to tap for years. Trendway, which has a goal to double its sales within four to five years, gets a new line of seating that it can sell through its network of 500 independent dealers nationwide.
"The rationale for the joint venture is pretty simple. Interstuhl wants to be in North America, and we want to increased our seating offering," Trendway Marketing Director Jim Lehmann said.
Both companies have explored the possibility of a joint venture for years, "and now the time is right," Lehmann said.
The Holland Township-based company will adapt four to six of Interstuhl's 12 seating lines for the North American market for sale under the Trendway brand name. The joint venture, named InterTrend Seating LLC, will also develop its own product line.
The plan is to sell the chairs resulting from the partnership in conjunction with existing Trendway office furnishings and systems. Lacking a strong seating line, less than 10 percent of the office systems Trendway sells includes one of the company's own chairs, Lehmann said.
Trendway's goal through the joint venture is to eventually bring that up to 70 percent, which in turn would generate $10 million in new revenues annually. InterTrend "really plugs a major gap in our product line," Lehmann said.
"We now have a complete product package," he said.
Interstuhl will initially produce and ship key components to Trendway from Germany, with the number of products sourced and manufactured in the U.S. growing over time. Executives are presently looking for manufacturing space in the U.S. to house InterTrend, which expects to create 75 new jobs within two years.
The new company expects to begin shipping products by January, Lehmann said. Producing the new seating line in the U.S. will enable InterTrend to achieve the same short-term delivery times as Trendway, he said.
"Aesthetically and functionally, our offering will compete with any chair on the market and will carry an extremely attractive price," said Brad Fritz, Trendway's seating product manager.
The foundation for the partnership between Trendway and Interstuhl was set in 1990, when Interstuhl executive Joe Link, the son of company president and CEO Werner Kink, served an engineering internship at Trendway. Executives from both companies traveled back and forth in the years that followed, forming business ties that eventually led to the joint venture.
Both companies are family-owned and of similar size. Trendway, owned by the family of chairman and CEO Don Heeringa, posted sales of nearly $100 million in 2000 and employs about 450 people. Interstuhl, located in the small town of Messstetten-Tieringin, about 60 miles south of Stuttgart, employs 540 people and recorded 2000 sales of $80 million.
Announcement of the joint venture came just days after Trendway eliminated 57 production and salaried positions in response to a downturn this year in the office furniture industry. While Holland "comes in pretty high" on the list of possible sites to base InterTrend, "we don't want to rule anybody out either."