Missouri-based Lami Wood Products Corp., manufacturer of custom cabinets for builders and the parent company of Signature Kitchen and Bath, which offers custom cabinetry for the residential market, made news recently when it became a California Closets franchise owner, opening two new showrooms in the St. Louis metro area.
Lami Wood’s decision to move into the closet and home organization niche follows the trend of custom cabinet companies looking for more ways to diversify their product lines into profitable markets.
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The recession and housing market freefall has had a significant impact on the woodworking industry, affecting and depressing cabinet orders from builders and residential customers alike. As a result, custom cabinet companies, both large and small, are looking at the storage and home organization market as a way to increase their customer base, while keeping work flowing through their shops.
Even with industry and economic challenges, niche markets have shown some stability while dealing with the downturn. For instance, in 2009 the home organization market was estimated at $7.2 billion by The Freedonia Group, and demand for storage products is expected to rise 4.3 percent annually through 2013.
So, as cabinet companies search for ways to shore up their businesses and to keep machinery running in their shops, the move towards home organization products seems a viable solution for many.
Major woodworking shows, including the International Woodworking Machinery & Furniture Supply Fair (IWF), Association of Woodworking & Furnishings Suppliers (AWFS) and Woodworking Machinery & Supply (WMS) Expo, have featured closet seminars showcasing opportunities for woodworking companies to begin selling and/or to increase their sales in the closet market.
The 2012 IWF will feature an all-day symposium, conducted by members of the Association of Closet and Storage Professionals (ACSP), titled “Closets - Your Niche for Growth.”
Although the trend started long before the economic downturn, it has been spurred by recent events. The closets and home organization market had experienced tremendous growth over the past decade and many large cabinet manufacturers with dealer networks across the country quickly took notice and capitalized by developing products lines to serve the fast-growing industry.
According to Dan Heath, Lami Wood Products controller, expanding into the custom storage business was an ideal way for the company to increase growth and keep its manufacturing lines moving.
“Like many businesses in our industry, we were heavily impacted by the economic recession,” he says. “We found ourselves with excess manufacturing capacity and were looking to add a product that would utilize that capacity and increase our top line growth, while complementing our existing product lines.”
Heath says the custom home organization business was ideal for a number of reasons, including the fact that the company’s Signature Kitchen and Bath business shared similar demographics with the custom closet and storage customer.
The newly franchised California Closets retail locations will share space with Signature Kitchen and Bath showrooms, including the 5,700-square-foot retail location in Manchester, MO, and the 3,400-square-foot location scheduled to open in Rock Hill, MO, in May.
“With the two operations sharing space, we can operate more cost effectively and also increase our showroom traffic,” Heath says. The combined displays will also allow customers to see the available options offered by the company beyond its typical kitchen cabinetry lines. Featured showroom vignettes will highlight 15 different styles of home storage solutions, ranging from kitchen pantries to garage storage, media centers and custom His and Hers master bedrooms.
“The Midwest is known for being a melting pot in many ways, and in St. Louis this comes to life through a healthy mix of older homes with unique spaces and new builds with large square footage. In both instances, custom storage solutions offer homeowners the opportunity to maximize their space, whether remodeling or starting from scratch,” said Bill Barton, California Closets president, in a statement. “While known for closets, we’re happy to offer St. Louis residents even more solutions for garages and mud rooms.”
The home organization line will also have dedicated design consultants, separate from the kitchen cabinet designers, Heath says. “The initial customer meeting with kitchen design consultants is typically in one of our showrooms, while the closet design consultants have their first meeting with the customer in their home.” As for software, kitchen cabinet designers will use 20/20 Technologies design products and closet designers will use California Closets proprietary software.
Choosing the Brand
Although Lami Wood has its own custom cabinetry line, which it sells to the commercial builder and residential market, the company decided to go with California Closets as its first foray into the home organization market because of its long history and experience.
“We decided to choose the California Closets franchise because of the brand reputation and the national brand awareness,” Heath explains. “We felt the backing of California Closets would ‘jump start’ our entry into the custom closet and storage solutions market.” Particularly appealing, he adds, was the brand’s national support network and capacity in the areas of marketing, technology and manufacturing.
Started in 1978 by an 18-year-old part-time student at Pierce College in Los Angeles, California Closets has grown into one of the largest home organization companies in the country. Originally based in a garage, the custom closet company was sold in 1990 to Williams-Sonoma for a reported $11 million. And in 1998, it was acquired by The Franchise Co., known for its franchising and property service management.
Rebranding as FS Brands, the company owns a number franchises besides California Closets including, Paul Davis Restoration, BrandPoint Services, CertaPro Painters, College Pro Painters, Pillar To Post Home Inspection, Floor Coverings International, Handyman Connection and TLS.
Today California Closets has over 700 employees with 100 franchises in the United States, Canada, Japan, Australia, New Zealand and Spain.
Lami Wood Products will manufacture the California Closets line, along with the company’s custom cabinet lines and laminate countertops, at its 80,000-square-foot facility, located in St. Peters, MO.
Very few changes were necessary to incorporate the new products. “We only had to add a vertical boring machine to press the Häfele Rafix connectors to accommodate the line,” Heath says.
Lami Wood History
Bob Alexander, Sr. and his son, Bob Alexander, Jr. started Lami Wood Products in 1976. At the outset the company primarily sold cabinetry and laminate countertops to the home building industry.
Over the years Lami Wood expanded its operations to include retail stores, selling to the consumer and remodeling industry as well as for commercial construction.
The company employs approximately 60 workers with 15 in sales and design, seven in management, nine in the office and 29 in production and the warehouse.
In 2009 the company expanded into the fabrication and installation of granite and other solid surface countertops.
Along with Lami’s manufactured line of custom cabinetry and laminate countertops, it carries 13 different kitchen cabinet lines and is also a distributer for a number of national cabinet brands including Merillat, MasterBrand and Dura Supreme.