Gloster makes investments to control & sustain growth
Cinde Ingram -- Casual Living, September 1, 2008
Gloster Furniture is responding to ongoing growth in a sustainable and controlled manner, reflecting its company culture. The high-end outdoor furniture manufacturer recently made two major investments to serve its North American customers better while staying true to European business practices and progressing toward its goal of being the best.
To sustain its long-term growth, Gloster’s principals had been considering construction of a U.S. headquarters and distribution center when a 670,000-sq.-ft. manufacturing facility became available in South Boston, Va., near the warehouse Gloster shared with another European manufacturer since incorporating as a U.S. company in 1999.
“In that 10-year span from then to now, we just saw incredible growth,” Gloster President Eric Parsons said. “We were growing at clips of 25% to 30% per year. We literally made a move of our warehouse space on average every two years because we just continued to grow. During that time, our offices became separated from our warehouse. We also grew internally from the infrastructure side, and we needed to find a new home to keep pace with who we were becoming.”
During that decade of double-digit growth, Gloster evolved from a dining chair company making flat-pack teak furniture products to a manufacturer of seating groups in both teak and woven materials. Those changes tracked what was happening in the casual furniture market it has served since the early 1990s. Prior to finding success with its first garden bench in 1989, the company had made Scandinavian style indoor furniture and furniture components.
Listening to its North American customers and recognizing the trend toward cushioned seating led Gloster to make its second major investment by starting cushion production inside its new headquarters building. Gloster also doubled its fabric offerings and rearranged its customer service department. Each of those changes was prompted by customer-based market research as well as ongoing sales growth and the changing casual marketplace.
“Forecasting is critical to our success because we’re manufacturing five months out on the other side of the world,” Parsons said. “Five years ago, early buy business was about 40% of our annual retail business. That’s dropped to a third or less because the level we’re selling at is much more a special order business than it ever has been. Inventory is still an important part because in certain parts of the country you’ve got such a short window and you’ve really got to meet the demand in real time.”
To ramp up for that challenge, Gloster now has a significantly greater amount of inventory in its U.S. warehouse and an extensive in-stock cushion program. “For custom orders this year, our cushions were shipping within three weeks of the date they were placed, which is unheard of in this industry,” Parsons said. A stock availability bulletin goes out each Thursday to describe the amount of frames and stock cushions available. “So they know on Friday, Saturday or Sunday, the busiest days on that retail floor, they’re selling to exactly what we have. It’s a hugely important tool. We’ve set this model up so we’re their inventory when it comes to special order goods.”
As Gloster’s principals began to realize the deep seating trend as consumers’ desire for lounging, relaxing and outdoor living, they changed their products to reflect it. Recognizing cushions were becoming an integral part of product design, Gloster decided to take control of cushion production to ensure both its quality level and shipping times.
“We very quickly developed the notion that we have to go beyond the traditional approach to deep seating; we have to go to furniture you can live in outdoors,” said Charles Vernon, Gloster deputy CEO. “People don’t live at dining tables, they live in living rooms.”
Key employees were hired for Gloster’s cut-and-sew cushion production at the same time renovations were being made to the new facility. Its first sewer was hired last September. Production Manager Duane Root brought upholstery experience while Cut-and-Sew Supervisor LeaAnn Champeau brought 20 years of experience specific to the outdoor furniture industry. “She’s on the floor, hands-on; she’s great with R&D; she’s great from a training standpoint,” Parsons said. “We now have nine sewers out on the floor. We have a staff in-season of about 30 people in that operation.”
Champeau was pleased with how easily the sewers have learned the craft. “They picked up everything so quick,” she said. “It’s a great group of people, both upper management and on the floor.”By mid-July, about 40% of Gloster’s demand for cushioned product was being handled through the newly renovated facility. That allowed the company to deliver custom orders in under three weeks during the season, which is short in much of the country.
When Gloster launched its Halifax teak collection during the July premarket, “I heard as many good comments about the cushions as I did about the product, and that’s what we wanted,” Vernon said. The Halifax Collection should have prompted comments on its own because it includes a swivel rocker armchair, which brings motion to teak furniture.
“By recognizing what our customer needed and having the foresight to say we’ve now hit a point in volume, we were in agreement about making that investment,” Parsons said of Gloster’s push into cushion production. “It wouldn’t have made sense three years ago. We weren’t doing the volume to justify the investment in the personnel as well as the equipment.”
In spring 2007, Gloster began making renovations at the new facility to allow for cushion production and make room for its administration offices and customer service. Completed this year by April 1, the lengthy redesign and renovation process reflects a core business philosophy for the company.
“We don’t move forward until we get consensus,” Vernon said. “If you have to compromise, you’ve lost. If you get consensus then everybody believes in it. We do it in a lot of areas, from product design to marketing to how we approach things. So there’s a lot of debating and getting everybody’s views to the point we agree, then we can move forward with much more power because everybody’s on board.”
Such management style was a novelty for Parsons and other key members of Gloster’s U.S. management team, which includes Root as production manager, CFO John Nelson and David Meeks, national contract sales manager. That group interacts with Gloster’s global network to reach consensus about processes and to make sure it delivers what the customer wants.
“We decided to put a showroom in here, as our plans unfolded, to bring in retail customers to train them on what we do and who we are in an environment that makes sense to be able to show off what we do in the best light,” Parsons said.
A modular cube display inside the new showroom is filled with throw pillows in a range of colors. “We’ve gone from 40 to 90 fabric choices in 10 color families,” said Braddan Johnson, marketing manager. “What we’ve tried to do is offer a true breadth of outdoor fabrics with various textures.” Some have striking geometric patterns or soft velor feel, influenced more closely by apparel trends than interior design.
The showroom inside the front of the headquarters building was put to use for sales rep training in late June. Referred to as a sales boot camp, the training covered not only materials and construction but hands-on care and maintenance plus instruction on repair and how to assemble or disassemble product. “We had a number of sessions where they rolled up their sleeves and they got dirty,” Parsons said. “Selling this type of high-designed fashion product at premium price points, you have to educate your folks on the sales floor.”
Vernon added, “I think this was the best sales meeting I’ve ever been to because it was in our new home. Eric made the expensive decision to make it three days. I say it was expensive because it took them (sales reps) off the road, but it was money well spent. Seeing guys who have been reps for 10 years learn beside the new reps makes everybody equal.”
Not that sales training is a new investment for Gloster. Each year it sends 10-12 of its sales reps to visit its plants in Indonesia and China so they can witness, understand and be able to explain the company and its unusual management style. The concepts of sustainability and consensus-building are key to the manufacturer, which supplies high-end outdoor furniture in six continents and more than 50 countries.
Because of Gloster’s goal of being best in its niche, it has continually worked to maintain control of its materials and manufacturing processes. It owns sawmill, kiln operation and furniture manufacturing plants in Indonesia and works with two factories in China and another in Vietnam. If Gloster cannot own the factory, it sets up its own staff onsite to manage quality and control. “If the product’s going to have our name on it, it’s got to be up to our standards, even if somebody else is doing it for us,” Vernon said.
Vernon pointed out a sticker on each piece of furniture that shows the inspector’s initials and indicates where and when the product was made. Since opening its factory in Indonesia in 1986, Gloster has continued to invest in sustainable teak grown in managed plantations. When the popularity of teak began to wane in 2000, Gloster was quick to add teak and woven combinations that featured stainless steel accents. The ability to respond quickly to changes in the marketplace is another core company value that has transcended trends through the years.
“We don’t see the green issue as a trend, we see it as a way of life because that’s what we’ve always done,” Vernon said.