Small, new companies created by Steelcase Inc. to outfit hospitals and doctors offices are among the latest indicators that the once-ailing U.S. office furniture industry both on the road to recovery.
Maintain by Steelcase, launched this month with 23 employees, which occurred after a certain market to grow as baby boomers and Gen X age and require more medical attention. Will offer furniture for patient rooms, nursing stations, laboratories, waiting areas and other medical environments.
Will also foster more diversified income stream Steelcase, something many successful office furniture companies do when they continued to rebound from the unprecedented, industrywide sales decline that lasted for nearly four years beginning in 2001.
Some furniture makers are finding new revenue sources by expanding into new product categories. Another has focused on the sale of goods with high prices for big companies that sell goods more midpriced smaller businesses. The other is exploring the possibility of expansion into the Asian market is growing.
Steelcase and Herman Miller Inc. said they continue to put more money into product innovation during the slump. Herman Miller, perhaps best known for its Aeron ergonomic office chair, will introduce the largest collection of new products in its history during the Neocon World's Trade Fair, spokesman Mark Schurman said.
Office of the future may be illuminated by Herman Miller's new LED lighting that will be among the products introduced in the office furniture industry's largest annual trade show. This event will be held 12-14 June in Chicago.
Will also foster the Neocon to introduce some of the product design.
After nearly three decades of constant growth, the industry enjoys best year ever in 2000, recording $ 13.3 billion worth of orders, according to the Business and Institutional Furniture Manufacturers Association International, a Grand Rapids-based trade group.
Then orders slide, bottoming out at $ 8.5 billion in 2003 and increased only to $ 8.9 billion in the next year. Halted expansion plans - and stopped ordering furniture - because of concerns about the economy and terrorism.
"This clearly wasn'ta fun time to go through," said Joe Nowicki, treasurer and Vice President of investor relations for Herman Miller.
In 2005, things started looking up. Industrywide orders increased to $ 10.1 billion, up 12.7 percent from the previous year.
But the industry has experienced some painful adjustments to remain profitable. The number of people employed by the state office furniture industry fell 23 percent - from 75,000 to 58,000 - between 1997 and 2002, the latest year figures are available, according to the Census Bureau.
Steelcase, the nation's largest office furniture company, cut thousands of jobs, the consolidation of manufacturing operations and begin to rely more on third-party suppliers and outsourcing as shifted toward a leaner and more flexible manufacturing model popularized by Japanese automaker Toyota Motor Corp.
"If you go through as we experienced a decrease and then you come out the other side, you learn how important it is to really understand where you're going as a company," said James P. Keane, Steelcase's Senior Vice President and chief financial officer.
Grand Rapids-based company must catch up with some major competitors, including Herman Miller and Muscatine, Iowa-based hni Corp., which has long embraced the efficiency of production.
"While most of these people apply these principles in the early to mid 90's, only Steelcase is still chugging along, building a factory," said Matthew McCall, an industry analyst BB & T Capital Markets.
Working around the world Steelcase to cut 46 percent, from 24,000 to 13,000 and is in the process of cutting the factory space in North America with more than 60 percent.
Change has been good for the company's bottom line. Steelcase reported sales of $ 2.6 billion in fiscal year 2005, up 11 percent from the previous year but still far from a record $ 4 billion in sales during fiscal 2001, which ended in February 2001.
"Some firms are quicker to act than others but in general, a decrease of nearly hitting all the same," said Thomas Reardon, executive director of BIFMA International. "Everyone is feeling pain."
Zeeland, Mich.-based Herman Miller has pared down its global work force of approximately 12,000 employees at the beginning of the sales slide to around 7,000 now, a decrease of 42 percent.
At least one small office furniture maker has found success by growing the business rather than their manufacturing is shrinking.
Spring Lake, Mich.-based izzydesign, founded in August 2000 by former Knoll Inc. executive Chuck Saylor, uses an unusual, but so far successful, producing two branches approach. Companies build their own brand of chairs and other furniture as well as competitors' products, including Herman Miller and Holland, Mich.-based Haworth Inc
In this way, he said, if sales slip izzydesign-branded furniture, the company, a subsidiary of JSJ Corp. in Grand Haven, still can do well by filling orders for OEM products.
Saylor says izzydesign build "simple, clean, well-designed, affordable furniture for the next generation of technology-based." Just about everything is named employee of children or grandchildren, such as Jack Hannah chairs and tables.
Although he declined to release specific figures, said sales of izzydesign-branded products have an average growth of 20 percent over three years.
"If we go through another difficult economic times, we'll be fine," said Saylor. www.fortwayne.com
Maintain by Steelcase, launched this month with 23 employees, which occurred after a certain market to grow as baby boomers and Gen X age and require more medical attention. Will offer furniture for patient rooms, nursing stations, laboratories, waiting areas and other medical environments.
Will also foster more diversified income stream Steelcase, something many successful office furniture companies do when they continued to rebound from the unprecedented, industrywide sales decline that lasted for nearly four years beginning in 2001.
Some furniture makers are finding new revenue sources by expanding into new product categories. Another has focused on the sale of goods with high prices for big companies that sell goods more midpriced smaller businesses. The other is exploring the possibility of expansion into the Asian market is growing.
Steelcase and Herman Miller Inc. said they continue to put more money into product innovation during the slump. Herman Miller, perhaps best known for its Aeron ergonomic office chair, will introduce the largest collection of new products in its history during the Neocon World's Trade Fair, spokesman Mark Schurman said.
Office of the future may be illuminated by Herman Miller's new LED lighting that will be among the products introduced in the office furniture industry's largest annual trade show. This event will be held 12-14 June in Chicago.
Will also foster the Neocon to introduce some of the product design.
After nearly three decades of constant growth, the industry enjoys best year ever in 2000, recording $ 13.3 billion worth of orders, according to the Business and Institutional Furniture Manufacturers Association International, a Grand Rapids-based trade group.
Then orders slide, bottoming out at $ 8.5 billion in 2003 and increased only to $ 8.9 billion in the next year. Halted expansion plans - and stopped ordering furniture - because of concerns about the economy and terrorism.
"This clearly wasn'ta fun time to go through," said Joe Nowicki, treasurer and Vice President of investor relations for Herman Miller.
In 2005, things started looking up. Industrywide orders increased to $ 10.1 billion, up 12.7 percent from the previous year.
But the industry has experienced some painful adjustments to remain profitable. The number of people employed by the state office furniture industry fell 23 percent - from 75,000 to 58,000 - between 1997 and 2002, the latest year figures are available, according to the Census Bureau.
Steelcase, the nation's largest office furniture company, cut thousands of jobs, the consolidation of manufacturing operations and begin to rely more on third-party suppliers and outsourcing as shifted toward a leaner and more flexible manufacturing model popularized by Japanese automaker Toyota Motor Corp.
"If you go through as we experienced a decrease and then you come out the other side, you learn how important it is to really understand where you're going as a company," said James P. Keane, Steelcase's Senior Vice President and chief financial officer.
Grand Rapids-based company must catch up with some major competitors, including Herman Miller and Muscatine, Iowa-based hni Corp., which has long embraced the efficiency of production.
"While most of these people apply these principles in the early to mid 90's, only Steelcase is still chugging along, building a factory," said Matthew McCall, an industry analyst BB & T Capital Markets.
Working around the world Steelcase to cut 46 percent, from 24,000 to 13,000 and is in the process of cutting the factory space in North America with more than 60 percent.
Change has been good for the company's bottom line. Steelcase reported sales of $ 2.6 billion in fiscal year 2005, up 11 percent from the previous year but still far from a record $ 4 billion in sales during fiscal 2001, which ended in February 2001.
"Some firms are quicker to act than others but in general, a decrease of nearly hitting all the same," said Thomas Reardon, executive director of BIFMA International. "Everyone is feeling pain."
Zeeland, Mich.-based Herman Miller has pared down its global work force of approximately 12,000 employees at the beginning of the sales slide to around 7,000 now, a decrease of 42 percent.
At least one small office furniture maker has found success by growing the business rather than their manufacturing is shrinking.
Spring Lake, Mich.-based izzydesign, founded in August 2000 by former Knoll Inc. executive Chuck Saylor, uses an unusual, but so far successful, producing two branches approach. Companies build their own brand of chairs and other furniture as well as competitors' products, including Herman Miller and Holland, Mich.-based Haworth Inc
In this way, he said, if sales slip izzydesign-branded furniture, the company, a subsidiary of JSJ Corp. in Grand Haven, still can do well by filling orders for OEM products.
Saylor says izzydesign build "simple, clean, well-designed, affordable furniture for the next generation of technology-based." Just about everything is named employee of children or grandchildren, such as Jack Hannah chairs and tables.
Although he declined to release specific figures, said sales of izzydesign-branded products have an average growth of 20 percent over three years.
"If we go through another difficult economic times, we'll be fine," said Saylor. www.fortwayne.com
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