Forged In Fire

June 15, 2007
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CHICAGO — There likely could not have been a worse environment in which to launch a new contract furniture company than the three-year downturn between 2001 and 2003, when the industry was in a 40 percent freefall. Yet, a number of West Michigan's fastest-growing small furniture brands did just that.

Altus Inc., Grand Rapids Chair Co., Amneon Furniture and izzydesign all launched within months of the 2001 recession. Another up-and-coming firm, Stelter Partners, launched at the tail end of the downturn.

"Scary is the word I would use," said izzydesign founder and President Chuck Saylor, who wrote the business plan for his Spring Lake firm in late 1999. "The economy was starting to bounce around a little bit at the time, but nobody had any idea that would happen."

The U.S. office furniture market was flat in 1999, posting a 0.9 percent decrease in total production and a 1.2 percent increase in consumption, according to data from the Business and Institutional Furniture Manufacturers Association. It bounced back in 2000 with 8.5 percent growth in production, and as late as February 2001, BIFMA was still projecting growth for that year. The following month saw a 17 percent drop in industry-wide orders and layoffs across West Michigan

After the 17.4 percent slide in 2001, the doomsday prediction of an 8.8 percent drop in 2002 proved optimistic. What followed was the industry's worst decline ever: 19 percent.

It was during 2001 that Doug Huesdash and Jim Bird, then operators of JC Tackit Inc., a supplier to furniture OEMs, were offered the opportunity to purchase a bankrupt maker of cloned systems furniture. Expecting the downturn to emulate the short-lived 1991 recession, they purchased the firm and renamed it Amneon Furniture.

"We were making investments and expanding our manufacturing space, Web sites, brochures, binders — all with the assumption that the market was going to recover in a year or two," recalled Huesdash. "Obviously, it didn't, and we were in a pretty tough spot with the amount of investment we had made in developing and bringing the line together."

Craig Vander Heide and Eric Kahkonen, who had recently sold their first venture, Idea Industries, to then publicly traded Knape & Vogt, had just launched Altus Inc.

"We started out thinking that we would be selling products for the office, but nobody was buying anything new for the office," recalled Vander Heide, Altus president. "It was, 'We have a new employee: We need one chair.' You really had to look for opportunities."

As it searched for its niche, Altus made value-priced ergonomic chairs, including some offerings for big-box retailers. The brand soon evolved into Altus Healthcare, where it found a booming market for its signature line of computer carts.

At izzydesign, Saylor was admittedly nervous. He was passionate about his model, a collection-based furniture company focused on the emerging cultural changes of the modern office.

"When you're passionately committed to a business and you believe in what you're doing, it's incredibly difficult to give it up," said Saylor. "You can't just walk away from it."

Saylor credits a strong support network for getting izzydesign through its most challenging period, particularly communications specialist Clare Wade and primary investor JSJ Corp.

"It would have been easy for JSJ to walk away," Saylor said. "A lot of corporations would have at the first sign of the downturn, but they hung in there even when it looked horrible. Even when the industry was dropping 20 percent a year, they didn't pull the plug."

Now six years old, izzydesign is one of the most recognizable fledgling furniture makers in the country.

Stelter Partners, a breakout company experiencing its first exhibition at last week's NeoCon trade show in Chicago, has a similar story. Jim Stelter, who launched the company in 2003, credits his young employees.

"It's really invigorating for an old guy like me," said Stelter, who has seen 50 percent growth in his company to date this year. "You look at the pictures on our walls — it's the youth that is making this happen. And it's all coming out of West Michigan."

Like Amneon and izzydesign, which absorbed much of JSJ Corp.'s Counter Point operation, Grand Rapids Chair Co. emerged from a private label manufacturer, launching from five-year-old Manufacturers Resource Inc. in 2001. With hospitality its primary market, the new brand wasn't nearly as affected by the dot-com bust and office furniture downturn as its peers. Its challenge was overcoming the overseas competition that had overwhelmed the residential furniture industry and taken president and founder David Miller's former employer, John Widdicomb Co.

"When I started this business in my garage, people told me I couldn't do it," Miller said. "But I did."

Grand Rapids Chair Co. found opportunity in the weaknesses of offshore outsourcing. It established itself with quick, sometimes emergency, turnarounds, commonly fielding calls to replace, for instance, a several-hundred chair order stuck on a container ship in the Pacific. Using that same agility, the 80-employee firm began focusing on mass customization, carving intricate designs into or special shapes out of seat backs. Last year, it turned that skill into a now best-selling offering: the Amanda chair.

G.R. Chair Vice President of Sales and Marketing Tom Southwell found interior designers couldn't get enough of Amanda — or its newly introduced follow-ups Allison, Leigh and Mojo — at NeoCon. The centerpiece of the company's exhibit last week was a large chalk board on which designers could sketch out chair backs and file an order onsite.

"One of the ways the smaller companies are able to fill roles is with customers, especially smaller ones, that need a high degree of customization," said Michael A. Dunlap, principal of furniture consulting group Michael A. Dunlap & Associates. "Bigger companies aren't able to have that flexibility."

Amneon Furniture has found similar success with short runs and custom orders, as have other small local furniture firms, including Bold Companies in SpringLake, Charter House Innovations in Holland and Jeup Furniture in Jenison

Last year was by far G.R. Chair's most successful to date. In the first five months of this year, generally the company's slowest time, it is 40 percent ahead of its 2006 pace. The growth is necessitating another expansion — it recently expanded its Renaissance Zone site on

Chestnut Street
in Grand Rapids by 80,000 square feet.

Amneon is also seeing strong growth. Currently not an onsite NeoCon exhibitor, it announced last week that it would be represented at the Merchandise Mart in 2008, and will likely invest in a permanent showroom. Earlier this year, Amneon became a full-line OEM with the acquisition of Altus' seating line.

Now divested from the seating business, Altus last week launched Workstuff, an ergonomics accessory brand. At NeoCon, it locked in a coast-to-coast sales force for the venture. Next month, the company will relocate from Grandville to a new, larger facility in Walker

"We've paid our dues to get to this point," said Kahkonen, Altus co-founder and vice president. "We definitely have momentum and it's an awful fun time to be in the business. If you had asked me in 2001 or 2002, when the industry was real soft and we were first getting started, that wouldn't have been the case."     

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