After the smoke clears
by For the MBJ
Published: February 25,2008
The workday ended pretty much as every other Tuesday does. Lyle Harris left American Furniture, where he serves as president of the firm based in Ecru, a few minutes after 5 p.m.
Within a half hour, he was headed back to his Pontotoc County factory. Fire had broken out in the main warehouse area, where Harris estimates more than 70,000 pieces of finished furniture were stacked, awaiting shipment to the hundreds of dealers and retailers American counts as customers.
“They’re all over the country,” Harris says of his customer base. American builds stationary upholstered furniture, reclining chairs, reclining sofas and sells correlating tables it imports from China.
The company’s focus is the “promotional” market, which is the least expensive class of furniture, aimed at consumers of moderate means or those looking to spend less on their furniture.
Before the fire February 12, American employed a workforce of 1,100. All but a handful of them were effectively left unemployed because of the fire, which completely destroyed the 600,000-square-foot warehouse, roughly half of American’s building space at the main site. Harris credits the Pontotoc Fire Department and several area volunteer fire departments with saving the rest of the sprawling complex.
Harris says as many as 280 employees were to return to work February 18, making furniture in assembly areas that were unaffected by the fire.
Others will likely trickle back in coming weeks, as other options become available.
“As one step,” says Harris, “we’ve leased the 170,000-square-foot former Landmark Furniture building in Pontotoc.” Some assembly lines will be moved there and production started after it is set up before the end of the month.
Another move will be to outfit a “flex-line” facility that American keeps leased so 125 employees can begin production there, also. All the satellite buildings are within a few miles of the main plant.
“Our customers have been great,” Harris declares. “We are not a special-order company so our customers order deep.” Indeed, standing in one of the remaining undamaged storage areas, Harris and American CEO Mike Thomas are surrounded by rows of thousands of sofas, loveseats and other boxed and plastic-covered goods.
“This is, by far, the biggest business disaster we’ve ever been involved with, but, at the end of the day, we’re going to be a better company,” says Thomas.
Even as the investigation continues by insurer Lloyd’s of London, the state fire marshal’s office and the U.S. Bureau of Alcohol, Tobacco and Firearms, Harris and Thomas are receiving bids on rebuilding on the same footprint as the burned structure, but with some interior changes.
“We will change the plant layout,” says Thomas, explaining that there will likely be some realignment of storage and production areas within the plant. The new building will also be outfitted with sprinklers, though it’s not a required improvement.
Thomas says that water in the rural location will likely become an issue as the community grows, so American plans to install a water-storage tank and pump as a hedge against any future fires. The furniture officers are also spearheading a move to seek a grant to build an elevated community water tank.
Harris and Thomas are two of a group of partners who purchased American Furniture in 2004. Harris says the company reported $119 million in sales that year. Last year, it sold $170 million in furniture.
“In light of this setback,” Harris muses, “we’ll be lucky to finish 2008 flat.”
Harris explains the company’s success is directly attributable to keeping plenty of pieces stocked and ready to go when orders come in. He says those orders can be delivered virtually anywhere in the United States in 48 hours.
While American maintains a fleet of 50 truck tractors and 120 trailers, it must also contract with other trucking firms to keep its customers supplied.
“We’re kind of a China-proof business model,” Harris says to explain how American has been able to remain viable producing domestically while many other furniture companies have begun to import cheaper Chinese upholstered goods. (American does import the accessory wooden side- and coffee tables from China.)
“China can’t compete with us on upholstered furniture.”
Harris says health insurance coverage for American’s employees has been extended to March 31, when the company hopes to be back in full operation. Several state agencies and area furniture companies have offered assistance of various types to American.
Optimism within American’s workforce runs high, if remarks by Sherry Ramirez, the company’s labor scheduler, are representative: “This is just a little setback. We’re strong, we’re strong, we’re strong.”
Contact MBJ contributing writer C. Richard Cotton at email@example.com .
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