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Restoring the Family Business
The CEO of Montalbano Majestic International talks about his company's turn to restoration and refinishing to help compensate for ceasing furniture production.
By J.D. Piland
To say the least, Richard Montalbano is not happy with China or its furniture.
"They never went to war with us, but they beat us," says Montalbano, CEO of Montalbano Majestic International in Bellwood, IL.
It is not hard to see why he is so upset. Like many before it, his company, a 76-year-old manufacturer of Baroque, Victorian and 18th-century French-style furniture, was forced to cease production of its furniture lines earlier this year in large part due to lower-cost Chinese furniture imports, he says.
Rather than give in completely or outsource its work overseas as many other U.S. furniture makers have, Montalbano chose to redefine the third-generation business.
Montalbano Majestic, which has a long history that has seen a former Saudi Arabian official tour its showroom and counts a Mexican state governor among its customers, has found salvation in the restoration segment of the industry. The company formed the Montalbano Furniture Restoration Factory division - restoring, refinishing and reupholstering everything from simple chests of drawers to generations-old family heirlooms.
Montalbano Majestic, founded by Montalbano's father, Thomas, a master carver still active at 94 years old, continues to manufacture furniture, but on a limited, contract-only basis.
Despite what may seem to be a story about the downfall of a world-renowned company that for decades produced quality furniture, Richard Montalbano refuses to see it that way.
Actually, it is quite the opposite. He wants to encourage other furniture companies to start their own restoration operations.
Wood & Wood Products spoke with Richard Montalbano about the company's changeover, what the Chinese antidumping rulings mean to his company and what is still to come.
Richard Montalbano: We actually started about four years ago. As the manufacturing segment started going down, people wanted us to refinish because only a furniture factory can put a furniture finish on. We've got all the equipment, all the manpower, the know-how and everything else.
We started doing it little by little, refinishing, restoration, reupholstering and repairs. As time went on, a couple of the newspapers did a story on us, and people became very interested. And in the last four years, we have been increasing by about 20 percent in that portion of the business. It could become a very nice business that we could run an entire factory on.
My thought was, with all the [low-cost furniture] that's coming from China now, and the closings of all our furniture factories in America, a lot of the furniture manufacturers have the manpower and the know-how. A lot of the other furniture factories should go into this because there is plenty (of business) for everyone.
Everyone has been asking us for probably 20 years. They've been asking, "Can you refinish this for us?" because no one can redo a finish like a factory can. As the manufacturing segment started going down, we were looking for something else to do, so we started doing it little by little. We saw that it was actually much more profitable than manufacturing furniture.
Montalbano: The markup is probably three times, sometimes as much as four times. So with less people, you can make much more money. Less people, less work; you can do a lot more.
When you are manufacturing, you are starting from scratch. You've got to buy the raw lumber, all the raw materials. You have to do everything yourself. When you are restoring something, the people already own the furniture, so a good part of the cost of the product doesn't exist.
All you're doing is repairing it and refinishing it for people. Their cost is a lot less than if they were to buy comparable-quality furniture, and your cost is so much less that you can make much more on it.
Montalbano: It came naturally to us, since we had four years of doing it. That's what we had to do to stay in business. But, you know, it's less of a hassle. You don't have to worry about the furniture shows; you're not at the mercy of the stores and them going bankrupt on you. You get a deposit, and then the balance when [the furniture] is ready. Basically, you really can't lose. Your losses are negligible.
Montalbano: If it came back because someone wanted it in bulk that would be no problem. We do some contract work. We also do custom orders, but we have a line of furniture that we are ceasing production on because we will have inventory for a couple years.
But I don't foresee that happening because people won't look beyond price for quality anymore.
Montalbano: I saw it coming about five years ago - and [it's been] tremendously heavy in the last two years. I predicted that it would take five years [for America] to switch over [to imports]. At the time, at one of the furniture shows, everybody laughed at me. It actually happened in three years, not the five years I predicted. Then most of our industry was gone. The following year, it just fell apart. There's no way you can manufacture here anymore. Though many companies try, and there are those that claim they are making money here, the vast majority are assembling products that are made in other countries.
W&WP: What do you think of the rulings in last year's antidumping case against Chinese wood bedroom furniture manufacturers?
Montalbano: We were one of the manufacturers that were fighting dumping. First, all the furniture retail stores got off it because they were all greedy and knew how much money they could make with the imports. And then the Chinese told the furniture manufacturers that were on that list that they would never sell. And a lot more of the manufacturers got off. It was just too little too late.
But restoration, refinishing and reupholstering are the biggest things we are going into. To me, that is the future for furniture people.
Montalbano: We've begun refinishing church pews, too. In our area, there are about 30,000 churches within a 100-square-mile radius. For every furniture factory, there will be a lot of churches around, and [the churches will] restore and refinish their pews. We're finishing up a church now with 300 pews. Right after Easter, we have two other churches lined up. They're kind of nice big jobs to augment. Then you get the reupholstering and refinishing of bedroom and dining room sets and small pieces in between. It could be a very nice business for anyone.
As a quality furniture manufacturer, you get a lot of furniture, especially furniture that is painted over. You remove the paints, and like I tell some people, "You've got a Picasso here." With beautiful marquetry, inlay work, veneers and everything, they are totally fabulous underneath. We can appreciate the artistry of these pieces, so, for the workers, it's enjoyable.
Montalbano: We can't do anything in under two weeks, if we are removing the finish and putting a new finish on. Our average time is about four to six weeks.
We get a lot of repeat business, a lot of referrals in this, which you would not get in new furniture. If someone has Uncle Harry's bedroom set and someone else has Aunt Sherry's dining room set, they are totally different pieces, and people do tell their friends about us.
Montalbano: We wash off the [furniture] probably once a week. Then they go in a cycle for who needs it the fastest. Some people don't need it for two or three months. Some people are moving six months from now. If you want to see it, fine. Otherwise we'll store it for you until you are ready for it, provided the balance is paid in full.
Montalbano: For the average furniture company, all the manufacturing equipment you already have would still be usable. Many times, we remanufacture parts. Like with the church pews, we'll put stuff through the planers or the sanding machines. The only extra thing you would need is the metal pans to put the thinner in.
It's a very low amount of money that you would need. You've already got the spray booth set up; you've already got the spray equipment; you've got the workers. I would think it would cost no more than $5,000 to switch over a company. The biggest expense would be advertising.
But if you've got trim saws and some of the other machinery, you're OK. You don't need a heck of a lot of machinery. As a matter of fact, we've sold off some of our excess machinery because we don't need it. We never will.
Montalbano: We did hire one guy, a touch-up and repair guy, because you get so many phone calls when you advertise, and not everyone wants it restored or refinished, [just repaired]. It's added business.
[Montalbano Majestic employs about 20 workers in its plant.]
By comparison, we used to have 65, all in the factory. We are doing as much business now as we were then.
Montalbano: My advice is to get into it right away, while you still have a good workforce and your manufacturing facilities set up. I would be happy to give information and thoughts on what to do, if anyone interested wanted. There's plenty for everyone; it's a big country, and you could have six manufacturers in every state. There's room in America for a thousand manufacturers to do this.
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