LesCare Kitchens - A Reversal of Misfortune
Posted: 10/12/2006 2:00AM
A Reversal of Misfortune
LesCare Kitchens’ new facility pumps life into North Carolina woodworking industry and economy.
By Hannah Miller
The long-established, family-run manufacturer of kitchen cabinets recently invested $20 million in a newly renovated state-of-the-art facility in North Carolina.
“We’ve been very fortunate,” says President and CFO Louis Lestorti Jr., explaining why LesCare, which had $109.7 million in 2002 sales, can think about expansion. “But we’ve been aggressive also,” he adds, as he surveys the 310,000-square-foot facility in Statesville, NC, where freshly assembled hardwood cabinet doors are moving through a $6 million, state-of-the-art finishing line. As part of the Lestorti-owned Newman Consolidated Industries holding company, Waterbury, CT-based LesCare claims to be the world’s largest privately owned maker of frameless kitchen cabinets.
Investment is the key to staying competitive, says Lestorti’s brother, James, chairman and CEO. Propped by a strong home construction market, he acknowledges that the recession has not hit the cabinet-making industry as it has many other manufacturing sectors. He also notes that he thinks the domestic furniture industry would be in a better position to profit from the current building boom if manufacturers had invested in their plants years ago rather than closing down operations and buying products from Asia.
When it wanted to expand past its two plants in Waterbury and Southington, CT, earlier this year, LesCare looked to North Carolina partly because furniture plant closings had made available a large pool of trained employees. The company found a plant and 30 surrounding acres that were being vacated by a Falcon Co. operation that made commercial tables and chairs.
Now, having hired a 120-member workforce that is primarily former furniture and woodworking employees, LesCare has started producing cabinets of a quality and variety and at a speed that competitors cannot match, James Lestorti says. The company plans to move its headquarters from Waterbury to Statesville, where production began May 1.
Lead Times Shrink
Part of LesCare’s plan is to bring some of the attributes of its custom cabinetry to commodity cabinets for the building industry. LesCare offers builders, via distributors, something it previously aimed at the mid-range market: a choice of three hardwood door species, oak, cherry and maple, on a melamine particleboard box, in 600 SKUs. The price is 25 percent less; the lead time is down to two weeks.
The entire plan, James Lestorti points out, is to add speed and quality engineering at all three levels of LesCare’s manufacturing lines: custom, semi-custom and commodity. LesCare is one of the few companies to serve all three price points, with products ranging “from a $1,000 kitchen to a $100,000 kitchen.” Production is equally divided among the three ranges, he says.
In Statesville, parts for the company’s frameless cabinets are sized, glued, drilled and doweled by computerized equipment largely purchased from Stiles Machinery. That equipment, plus the flatline finishing system installed by Cefla Finishing America, cost $18 million. The other $2 million of the $20 million expansion went toward building renovations.
The equipment and the space have enabled LesCare to become more vertically integrated, James Lestorti says. The company now makes its own commodity hardwood doors, formerly bought finished from vendors. In addition, LesCare is doing all of its own finishing, some of which was formerly contracted to outside vendors. “Before,” he says, “we were giving away too much profitability to suppliers.”
Tim Longino, managing director, sums up LesCare’s core manufacturing strategy when he says, “This place is about complete manufacturing.”
Equipment Offers Flexibility and Precision
Productivity is further enhanced by a Holzma beam saw that can slice through a five-sheet stack of 3/4-inch material in one cut. Another timesaver is the Koch equipment that drills construction holes and inserts dowels in rhythmic procession.
On the Cefla finishing line, doors roll through the various stations in a specific pattern, so that robotic equipment can grab them up and flip them to coat both sides. In the stain booth, positive air pressure enters one side of an enclosed booth and directs fumes and dirt into a wall of filters on the other side. Topcoating and final sealant are applied robotically in a booth with see-through sides; the equipment is self-cleaning.
A Quickwood Pro 1400 finish and sealer sander from Sand-Tech automates cabinet sanding operations.
LesCare buys its finishing materials from three RPM divisions, Westfield, Chemical Coatings and RPM. LesCare procures its thermalfused melamine particleboard and MDF panels from GVK America and Uniboard.
The Statesville plant has the capacity to finish 3,000 doors a shift, James Lestorti says. At this stage, with ramp-up production amounting to about 1,000 cabinets a shift, he says, “We could about do other people’s finishing.” If all goes according to plan, the plant will be producing 3,000 cabinets a shift within five years and require every bit of that capacity.
Capacity restraints prompted the Lesortis to develop the Statesville plant. The two Connecticut plants combine to make about 1,500 cabinets a day.
LesCare looked to North Carolina partly because “the Northeast, especially Connecticut, is not user-friendly to manufacturers,” James Lestorti says. “They want to help companies in the biotech industry. Cabinetmaking is not one of their priorities.”
Things are 180 degrees different in North Carolina, where the last few years have witnessed a seemingly non-stop parade of furniture companies closing plants either because they decided to procure product from East Asia or could no longer compete with imported products. The governments of North Carolina and Statesville have set up training programs for LesCare employees at a local community college. The company also received some monetary incentives — “not a lot, but everything helps,” James Lestorti says.
Early Leader In Laminates
All three LesCare plants make cabinets in each of the company’s three price categories. Southington makes most of the thermalfoil cabinets, Waterbury does most of the custom plywood boxes with hardwood doors, and Statesville does custom laminates and melamine-clad particleboard boxes with hardwood doors. The Statesville plant also finishes hardwood doors for the custom cabinets turned out by the Waterbury plant.
While LesCare does not inventory finished cabinets, it does keep a full supply of components on hand, Longino says. In new house construction, “if they’re missing a moulding, the builder doesn’t get paid.” In the event a replacement part is required, LesCare pulls it off the shelf and quickly ships it, he says.
Imports are not likely to ever become a competitive factor in custom cabinets, James Lestorti believes, because of the amount of choice that consumers demand. “Somebody is always going to want something different.” Furniture manufacturers have to offer only one or two finishes for their products, he says, while cabinets require a whole palette of colors.
LesCare offers doors in eight wood species in its custom lines. In its commodity line for builders, there are three species and 150 doors that can be used on 600 cabinets. As James Lestorti and Longino are interviewed, they finger a sample of one of the company’s newest mouldings. It is painted black and then rubbed to reveal a thin line of gold MDF, which calls attention to the layered profile of the moulding.
Although James Lestorti says he does not think the Chinese will ever be competitive in custom cabinets, he thinks they will be a factor in the commodity cabinet market. “This (expansion) will put us on a level playing field,” he adds.
“We’re not strangers to importing products,” says Louis Lestorti Jr. He says the company buys components, but not complete cabinets, wherever it thinks they will add value to its products. Examples include Russian birch drawer boxes, cabinet hardware and interior fittings.
What Lies Ahead?
He says he tries to keep in close personal touch with the distributors and dealers that sell LesCare cabinets. LesCare sponsors driver Mike McLaughlin’s race car in NASCAR’s Busch Series; McLaughlin rewarded his sponsors by winning the 2002 Busch Grand National North championship. James Lestorti says the company’s racing interests is a great way to entertain dealers.
“For us, it’s not about having the name on the car,” he says. “It’s about getting together with our dealers, keeping the connection with them.”
In cabinet styles, James Lestorti says he sees a huge return to contemporary, but not the hard-edged contemporary of the 1980s, with its metal and bright colors. “It’s a much softer look,” he says, that mixes metal with wood and uses more subdued colors. Style changes start with the top 5 percent of consumers, he says, and “now the top 5 percent are saying ‘Give us something new.’”
As for LesCare itself, a $20 million investment in Statesville is only the beginning, the Lestorti team says. The equipment in place represents only phase one. “We’ll add more equipment before the first of the year,” James Lestorti promises. “Our goals are not limited to anything at this point.”
LesCare Gives Hope to Jobless
When LesCare Kitchens announced last spring that it was expanding to Statesville in North Carolina’s Iredell County, response was a little overwhelming, remembers President and CFO Louis Lestorti Jr.
Two thousand people showed up for a two-day job fair. “And that was for five posted positions, a total of about 50 jobs,” says his brother, Chairman and CEO James Lestorti.
The Lestortis expected an ample labor pool, but not that ample. Iredell and four nearby counties, long acknowledged as a center of furniture making, lost more than 2,000 furniture manufacturing jobs between 2000 and 2003. Unemployment in one of the counties, Caldwell, hit 11.2 percent, in July of 2002.
“The reaction was one of extreme excitement” when LesCare announced it had bought the former Statesville facility of commercial furniture maker Falcon/Thonet, says Jeff McKay, director of the Greater Statesville Development Corp. St. Louis-based Falcon closed its plant and consolidated its manufacturing at other sites in February 2002. The action eliminated 200 jobs.
“We’ve been very impressed with not only their company but their perspective on the future of their industry,” McKay said of LesCare. “They seem to operate more as a 21st century-type company. A lot of their equipment is state of the art. There’s a lot of out-of-the-box thinking with their manufacturing process, which certainly, in my opinion, will make them even more competitive.”
LesCare hired 120 people, an estimated 85 percent of them former furniture and woodworking employees. Only two of the new employees are former Falcon/Thonet workers because the two companies’ products have little in common, said James Lestorti. Most Falcon/Thonet employees were involved in metal plating, for which LesCare has no need.
Plans are to increase employment to 560 in five years, as capacity grows to 3,000 cabinets per shift. The plant is highly automated, but “it takes a lot of people moving things around to make 3,000 cabinets,” says Managing Director Tim Longino.
“With space and good labor you can do a lot,” James Lestorti says. LesCare is finding that out in Statesville, he adds.
— Hannah Miller