THE BUSINESS OF FURNITURE

Transcription

1 MMQB THE BUSINESS OF FURNITURE

2 Reprinted with permission from The Monday Morning Quarterback. Ergo Contract By ROB KIRKBRIDE Ergo Contract has more than 400 dealers around the U.S. that carry its line and its sales are up 40 percent this year (and expect to be up about the same amount next year as well).

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4 MAKERS S ome office furniture manufacturers treat the fact that they work with Chinese manufacturers a bit like the Wizard of Oz they are happy to show you the product, but don t look behind the curtain. They are not exactly hiding the fact that they do, but most aren t completely open with how much they depend on their Asian partners. Other office furniture makers bemoan a race to the bottom with Asian office furniture makers, claiming that they don t want to compete with them because they can t win a pricing war. Still others feel the quality of Asian office furniture is so low that it isn t a real threat. While there are bits of truth to all those statements, there is also another side of the Asian furniture manufacturing story that is rarely told: For those willing to do the footwork, there are amazing opportunities for North American office furniture makers to partner with their Asian counterparts. 16 The Monday Morning Quarterback SUBSCRIBE December 22 & 29, 2014 mmqb.com Reprinted with Permission

5 Mark Denham Reprinted with Permission mmqb.com December 22 & 29, 2014 SUBSCRIBE The Monday Morning Quarterback 17

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8 That is exactly what Ergo Contract is doing (and with great success). The California office furniture brand is taking the best seating it can find in Asia and bringing it to an increasingly cost-conscious market. They are proving there are great seating products being made in Asia for those willing to seek out the best, most reliable companies to work with. Ergo Contract has more than 400 dealers around the U.S. that carry its line and its sales are up 40 percent this year (and expect to be up about the same amount next year as well). The Ergo Contract brand continues to grow and it also has a robust business as a seating OEM, working as a conduit between its Asian manufacturing partners and U.S. office furniture makers looking to round out their furniture lines with affordable products. The company opened in 2004, just after the dot.com meltdown in San Jose. Ergo Contract Founder Mark Denham discovered a glut of pre-owned office furniture on the market after the tech implosion. He also found companies weren t willing to spend as much on workstations per employee. While they might have spent $5,000 a worker for furniture, that dropped to $2,000 and to $1,000 for some companies. At the invitation of a friend, we went to Asian and found that there were world-class manufacturers over there that do a really good job of tweaking their products to the American market, Denham said. It was a compelling proposition, so we started developing (channels) for U.S.-based manufacturers who wanted private label seating, components and finished goods brought to the United States. Like any manufacturing venture offshore, Denham found good manufacturers and bad ones in Asia. But he was surprised to find so many with state of the art manufacturing, top-notch tooling and robust design and quality control programs. I always use the example of automobiles, he said. The first Asian cars to come to the U.S. were Toyotas and Hondas and they weren t very good cars. That has changed. Now the quality is excellent and if you buy a Honda or Toyota, it ll probably last a long time. The same is true for furniture. We feel comfortable enough to offer a lifetime warranty (on many of Ergo Contract s products). As the company grew, it found it was developing more products than it could push through its OEM channel. So in 2009, it spun off its Ergo Contract brand to sell into the office furniture dealership channel as an importer and distributor. That s when the company really took off as a mid-market value seating company. The company has a full range of seating for the entire office, from reception to task to executive to lunch room, stacking chairs and stools at a price point that is compelling. Many times projects get squeezed and people start looking for places to save money; looking at alternatives, Denham said. We shoot for that 80 percent sweet spot. Heavy customization is hard. A lot of our products come in black or a limited fabric selection, but we can ship them in 24 hours. Of course, designers want choices as well, so Ergo Contract is rolling out its Layover seating collection in January that will have a choice of six fabric and mesh colors. The company is also rolling out its Ergo Flex height adjustable tables. Ergo Flex uses a European height adjustment mechanism coupled with a top made in China and assembled at its plant in Shanghai. You get the frame and manufacturing efficiencies from Asia with the stateof-the-art controllers with all the safety devices included from Europe, Denham said. As far as quality is concern, Denham believes in overbuilding or over engineering at least a little. All of the components are high quality. Every aspect of the seating products are customized to Ergo Contract s specifications. One of the things we do not compromise on is quality, said Lea Goldenring, general manager. The design of the seating products have become more sophisticated as well with minimum adjustments and lots of comfort. Gone are the chairs with oodles of protruding paddles underneath for adjustment, Denham said. Denham is an industry veteran who started selling office furniture and school equipment in the 1970s. He designed his first height adjustable table for handicapped, wheelchair-bound children. I saw nothing on the market that could help them, he said. That was my first foray into designing furniture for a specific application; for a functional need. Now that the company is firmly established in the value seating market and is entering the height adjustable table business, the obvious question is: What s next? Denham said the company will continue to grow its height adjustable table base line to five models. It is a market that is large and still growing. And with its base in San Jose, ground zero for the technological revolution, Ergo Contract has the opportunity to have a front row seat for what that market needs in terms of new furniture. We are going to develop products that have a significant impact in the workplace, he said. Q 20 The Monday Morning Quarterback SUBSCRIBE December 22 & 29, 2014 mmqb.com Reprinted with Permission

9 Reprinted with Permission mmqb.com December 22 & 29, 2014 SUBSCRIBE The Monday Morning Quarterback 21