When Universal Furniture purchased Southern Furniture in September 2019, it immediately gave the case goods company a foothold into custom domestic upholstery production.
Today, this domestic capacity complements the company’s imported ready-to-ship upholstery line with special-order capability that offers customers some 400 fabrics and more than 50 leathers, plus multiple options in wood finish and nailhead trim.
In October, the company took its custom offerings to the next level with its U/Choose program, which offers multiple arm, leg, cushion, welted and nonwelted options on sofas, chairs and sectionals, to name a few core product segments. Sleeper options are also available on sofas and swivel options are available on chairs.
The goal with U/Choose was to turn heads with retailers and designers alike with a program that the High Point-based company anticipates will represent a significant part of its revenue over time because of the typical demand in custom offerings among other upper-middle to upper-end upholstery resources.
Based on the reaction at High Point Market and premarket, the company expects this will happen sooner rather than later.
But getting to this point took time given the many hurdles the company faced launching its own domestic upholstery operation and line. First, no one knew there would be a global pandemic within six months of the purchase that would upend everything from materials availability to the breakneck pace of demand that drew lead times out to 28 weeks or more for Universal and other manufacturers.
Second, Universal has been primarily known as a case goods resource that once produced domestically but has been producing goods overseas for decades. That has begun to change with the start of its import upholstery program made in Vietnam, which offers fabric sofas retailing around $1,399, compared with similar domestic sofas retailing around $1,999.
Starting its own domestic upholstery operations created challenges and opportunities, not the least of which has been to gain the trust and support of both vendors and suppliers, as well as workers who are getting plenty of offers from other manufacturers.
“Universal has been around a long time, but they have not been in the manufacturing area in years,” said Dale Smith, general manager. “And they were all case goods at that time. Upholstery was brand new, and nobody knew who we were. It has been three years of trying to get our name out in the community and being involved in the community. There also has been a lot of word-of-mouth from our employees who are encouraging other people to come here.
“We also have partnered with some very strong vendors in the area — foam vendors and frame vendors — and we have good strong relationships with them. And that helps in this industry. When you pay your bills and everybody knows you pay your bills, they are talking about you and it’s a great thing. … With our suppliers, they know that they can count on us, and we can count on them.”
Having a facility and equipment in place in Conover, North Carolina — not to mention a team of workers with many years of experience — helped get things off the ground. Still, the company had to make plenty of adjustments along the way.
This included winnowing down Southern’s line, estimated at 3,000 SKUs, and also moving away from the plant’s OEM business, estimated at 75% of Southern’s business at the time of the acquisition. These were customers that included mostly wholesalers, but also some retailers.
Universal continued to service those customers while also deciding what products to keep in the line and incorporate into the Universal mix. That process also included figuring out which items made sense to manufacture from a cost and efficiency perspective.
“There were things that made sense for us and things that didn’t,” said Sean O’Connor, senior vice president at Universal. “So, the first year, we worked with their sales team and ran it as it was, but as we tried to get our arms around costs and the things that weren’t selling, we started immediately dropping items and dropped a big part of the Southern line knowing that we were going to onboard all this Universal product. And we had to figure out what things made sense for the Universal line, too. It was about running the best of the best of what was going to go forward and really reshaping all of that.”
The large amount of OEM business — combined with various supply chain challenges from the onset of the pandemic through much of 2021 — pushed lead times to 28 weeks.
But once the company got away from the OEM business near the end of 2021, it was able to focus solely on the Universal product line. In turn, this made a big difference in lead times, which by late summer of this year, had decreased to 8-10 weeks.
Changes at the plant
But the transition also involved major investments in new equipment and a redesign of the plant floor, which was overseen by Smith. Smith joined the company from Fairfield Chair and previously had worked in various positions at Hooker Furniture, including as vice president manufacturing. He started with Universal in October 2019 and hit the ground running to make improvements.
“It gave me the time to get in here and really see the flow of this plant and see where the deficiencies were and what we needed to change,” he said. “We evaluated the whole process and … I was just like a kid in a candy shop. There was so much opportunity. … We grabbed the low-hanging fruit very quickly and knew what we needed to do.”
This led to a reconfiguration of the plant’s layout, including revamping the sewing room floor.
“We have refined it and have another plan to revamp it again as we go along,” he said. “We are always going to make it better. We are always improving.”
In addition, the company replaced 30-year-old sewing machines and invested in two new fabric cutting machines that have more than doubled its cutting capacity.
“The flow of the plant has as much to do with the capacity as anything, but the additional equipment that we purchased on the front end for the fabric and the sewing process has allowed us get the product to the upholsterers much more efficiently and much more quickly,” Smith said.
While the company continues to use a few outside suppliers for its frames, it recently invested in new CNC equipment that will allow it to build some frames in-house.
While not revealing a specific figure, O’Connor estimates that the company has invested several million dollars in new equipment in the past two years alone.
‘Fresh eyes’ and veterans
But perhaps the most challenging aspect of the transition was labor.
For example, because of typical changes in worker sentiment when a new owner comes in and does things differently, Smith estimated that there was a 70% turnover of the original Southern workforce and management.
“When we came in, we had a lot of the old Southern crew here, and we kept some of the management thinking there was some institutional knowledge of the frames and how things were done,” O’Connor said.
But soon, the executives noted, there was some resistance to changes Universal wanted to make. That, in turn, required a large-scale recruitment effort to replace workers who left.
“Bringing in these new people, you had these fresh eyes on it and experience from lots of different places where we could get some better management,” Smith said. “And that management brought in their friends and new people that we could depend on.”
“It really helped change things in the last year by bringing in these new people to oversee these departments and that really helped flip the switch on the culture,” he added. “It became sort of a game changer for us in recruiting and having people look at us.”
He and O’Connor also noted that many of the original Southern crew also decided to stay on board and have adapted well to changes Universal has instituted to improve the process and the product mix.
“There are still some Southern veterans here, and they are very good,” O’Connor said.
“They are open to looking at things differently and are the kind of people you want to keep,” Smith added. “They get it.”
With about 130 workers — compared to the low 70s when it made the acquisition — the facility has a solid team in place. However, turnover remains an issue because of the large amount of competition in the area.
“We could hire 20 people, but then we were losing people,” O’Connor noted, of the early challenges in recruiting workers. “Then we were never really getting ahead because of the labor shortages. … And especially during the pandemic, every upholsterer that came in here said ‘I am making $35 an hour’ and they could name their price.”
Because of the ongoing competition for workers, the company is always looking for talent, not just to fill open jobs, but also to give workers opportunities to move into leadership roles.
“I have to find people that can grow and be able to promote them from within, if possible, to have our base built for the next 10 years, the next 20 years,” Smith said. “We have a lot of good people here that are stepping into those roles. … We have to keep cultivating people and encouraging people to work here knowing they are going to have opportunity.”
“We want to get young people in here and get to the point where we can start training our own people,” he added. “That is how we are going to be here, 10 years from now, 20 years from now. I will be long gone, but I have to leave a legacy here in preparing people for these jobs.”