Smith Kindles Sales At Kindel

January 14, 2008
| By Pete Daly |
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GRAND RAPIDS — While other manufacturing executives are traveling overseas to find cheap sources of production, Jonathan L. Smith just went to Tokyo for the opposite reason. He went to celebrate the first sales in Japan of furniture made by Kindel, the last all-American luxury residential furniture maker of significant size still in Grand Rapids.

Smith, a former bank executive, has been president and CEO of the 106-year-old company since the former leadership was removed by Kindel Furniture Co.'s owners almost one year ago due to lackluster sales.

Late last summer, a management contingent from Sala Azabu, the largest fine furniture retail company in Tokyo, came to Grand Rapids to arrange the first shipment last November of Kindel furniture to Japan, the start of a three-year exclusive contract with Kindel, according to Smith.

"The entire second floor (of the Sala Azabu building) is Kindel furniture," said Smith.

"The international market was non-existent for Kindel a year ago, with small exceptions," said Smith. But in December, Kindel furniture was being prepped for shipment to Japan, India, Kuwait and the Ukraine. Smith predicted that up to 20 percent of Kindel’s sales may be international by the end of 2008.

Smith would not divulge the company's total sales but said they are "up 12 percent over one year ago." Last year, an industry analyst estimated the company's annual sales at around $9 million.

Smith said Kindel has about 120 full-time employees at its factory at 100 Garden St. SE, where it has been located since 1912.

Jonathan L. Smith
Company: Kindel Furniture
Title: President & CEO
Age: 55
Birthplace: Grand Rapids
Residence: East Grand Rapids
Family: Wife, Betsy; three sons and two daughters
Business/Community Organizations: President of the board, St. Cecilia Music Center; board member, Community Shores Bank.
Biggest Career Break: "In 1987, I went from running a small business for Citibank in New York City to running one of the largest domestic businesses because it was in trouble."

Smith earned an MBA at the University of Michigan, with emphasis on finance. He worked in New York and Chicago for Citigroup Inc. for 20 years, and then for a couple of years for Fifth Third Bank in West Michigan. A few years ago he went into business on his own as a management consultant. One company he worked with was Kindel, which has been owned by the John Fisher family of Muncie, Ind., since 1964.

Smith said his professional skill set is knowledge and experience of "how to grow a business — how to evolve and change so that you don't get left behind."

The transition from finance to furniture was not a problem for him, he said, because his "primary task (at Kindel) is to grow the business."

The company has aggressive strategies under way that involve new products, new markets and a new marketing campaign.

One interesting new product is a secretary inspired by the one used by George Washington at Mount Vernon. Concealed inside one of the drawers is wiring for connecting to the Internet.

"We want to make things that are authentic (in appearance), but most people buy furniture to use it. It has to be current," said Smith. He added that Kindel recently was licensed by the Mount Vernon Ladies Association — the caretakers of Mount Vernon — to produce a line of designs based on the furniture owned by the Washington family.

Kindel got some good publicity late in the fall when it donated a one-of-a-kind Duncan Phyfe-style mahogany table to Mount Vernon for use at a Nov. 7 meeting of President George Bush and French president Nicholas Sarkozy. Kindel craftsmen spent three months designing and building the 23-foot table, estimated to be worth at least $30,000.

A major task facing Kindel now is advertising — which the company has not done for about 15 years, according to Smith. He said the thought apparently was that advertising should be a function of Kindel dealers throughout the country.

The first advertising will appear this year, and some of it will definitely target interior designers. Interior Design magazine recently published a photo of an Empire chair that Kindel first produced more than 50 years ago. The photo immediately generated 30 inquiries from designers who were not familiar with the furniture company, according to Smith.

Kindel also just came out with a new, high-end catalog, and is revamping its Web site, which has seen a 138 percent increase in hits since March.

"Not high enough, but going in the right direction," said Smith.

"We need to quadruple the number of people who walk in the door and say, 'Do you carry Kindel?'"

The Michigan economy has not really made an impact on Kindel sales, according to Smith, because "98 percent of our business is outside the state of Michigan."

A potential national recession does not worry him much, either, because Kindel is a high-end, luxury brand bought by fairly affluent people who generally are less affected by an economic downturn than the average American, Smith said.

Kindel Furniture also re-established a relationship with Robert Allen/Beacon Hill, which will display Kindel furniture in showrooms in New York City, Los Angeles, Chicago, Atlanta, Boston, San Francisco, Seattle, Houston, Washington, D.C., Philadelphia, Dallas, Dania Beach, Fla., Westbury, N.Y. and Troy, Mich.

Robert Allen/Beacon Hill is the showroom subsidiary of The Robert Allen Group, "which has a sterling reputation among interior designers," Smith said.

Kindel recently launched a new program called ReNew for people who own Kindel furniture that shows the ill effects on furniture of long use. Kindel will refurbish a piece using the same woodworking and hand-finishing techniques at the same Grand Rapids plant where it was originally built. Smith said the ReNew program is an excellent way to introduce Kindel to young, affluent consumers who have inherited an old piece of Kindel furniture.

Kindel faces challenges, one of which is keeping handcraftsmanship alive in the high-tech era. Kindel is famous for still employing many skilled woodcarvers and hand-finish specialists, and it uses very little automated equipment. "You can't find a computer in the factory itself," said Smith.

While other high-end residential furniture makers such as Baker, Hekman and Sligh have closed or left Grand Rapids in recent years, Kindel is staying put.

"We produce everything right here at 100 Garden Street," said Smith. While other makers are looking for cheaper labor costs elsewhere, Smith likes the fact that Kindel can "control that manufacturing process (here) very well."

At the same time, the management team is constantly looking for ways to be more efficient. One of the biggest challenges is finding new employees who are able and willing to learn the skills of handcraftsmanship. "They are rare," said Smith.

Another challenge is a shift in America to a more informal life style — "compared to my parents' generation. Their lifestyle was very formal," said Smith, whose father was a prominent attorney. Many of the affluent young buy furniture on the assumption they will replace it in a few years, whereas Kindel quality was appreciated by older generations because it was seen as a lifetime investment.

Ironically, the new business Kindel has found in Japan is in sales of the more traditional Kindel lines. Tradition and formality may appear to be waning here, but it is obviously alive and well in other parts of the world. And that's where companies like Kindel come in.

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