Above: “Elvis Presley’s Hollywood,” designed to evoke the retro look of the ‘50s and ‘60s, is one of two licensed bedroom furniture collections being manufactured by Vaughan-Bassett Furniture. The company says it has written orders for more than 1,000 suites of each collection since their debut at the Spring International Home Furnishings Market.  
     

Elvis Presley-inspired furniture is the company's newest weapon in its turf war with furniture imports.



Two new furniture collections bearing Elvis Presley’s moniker have sales rockin’ and rollin’ for Vaughan-Bassett Furniture Co. Yet, company officials say, The King alone cannot keep its manufacturing plants’ doors open during a period of intense import competition.

That’s why the Galax, VA-based bedroom furniture maker, which introduced the much-ballyhooed “Elvis-inspired” collections at the April International Home Furnishings Market in High Point, continues to streamline manufacturing, shorten delivery times and drive its prices low enough to more effectively compete with imports.

     
Vaughan-Bassett Furniture Co.

Galax, VA

Vaughan-Bassett Furniture Co., a more than 80-year-old, family-owned manufacturer of predominantly wood bedroom furniture, employs 1,600 people at four manufacturing facilities. Company sales were $152.3 million in fiscal 2001. While the company imports 5% to 10% of its products, President and CEO John Bassett III has been extremely vocal in stating his company’s intention to maintain a strong domestic furniture manufacturing presence.

Three Keys

1. Developed Vaughan-Bassett Xpress program to quick-ship most popular products to retail customers within two to three weeks.

2. Worked closely with employees to increase manufacturing productivity and with suppliers to meet delivery schedules and contain prices.

3. Introduced two Elvis Presley bedroom furniture collections at Spring High Point Market to great fanfare and the attention of consumer media.

 
   
     

Now, after several years of shrinking delivery times to as little as 10 days by concentrating on large-volume output, warehousing of its most popular products and enlisting the cooperation of employees and suppliers, the company can see the results.

Sales of $40.3 million for the first quarter of fiscal 2002, (December 2001 through February 2002) were 23% greater than the previous first quarter. This bodes well for a company that saw its annual sales slide 7% from $163.4 million in fiscal year 2000 to $152.3 million last fiscal.

Vaughan-Bassett’s three major furniture production plants, which employ a total of 1,600 people in Galax; Elkin, NC; and Sumter, SC; are each running one shift plus overtime; more employees are being hired to help meet growing demand.

Meanwhile, the company’s rough mill departments are each regularly operating two or three shifts to keep pace. To address this bottleneck, Vaughan-Bassett plans to convert its high-end furniture plant in Atkins, VA, purchased from Virginia House Furniture in 1998, into a supply source for cut-and-glued lumber. Furniture previously made in Atkins will be manufactured at the company’s other three facilities.

Quick Delivery Plus Low Price Equals More Sales

Executive Vice President Wyatt Bassett says when retailers factor delivery times in with prices, “we think we win the value equation” against furniture imports.

Forty percent of the company’s SKUs — the best-selling ones — ship VBX (Vaughan-Bassett Xpress). The system uses common carriers and streamlined order processing to guarantee delivery to retail customers within 10 days in the East and 17 days in the West.

In addition, Bassett says some of the VBX suites are offered at import-level prices through the cooperation of vendors who have held or lowered prices of some supplies and of employees, who have made a concerted effort to step up production rates.

As a result, Bassett says the company is finding that it can compete with imports — not only where Asia’s cheap hand labor has less of an advantage as in the case of simple, unadorned styles like Shaker and Mission — but also on products that feature more complex, carved pieces. To accomplish this, the company invested about $1 million on two computerized carving machines to produce the elaborate carvings used throughout its product range.

     
 
Dennis Cox uses one of five dual-table Shoda routers in the Galax plant to cut veneered panels. “Every machining router does all the steps we have to do except a little sanding,” says Wyatt Bassett, executive vice president of Vaughan-Bassett.  
     

“Dad likes to say, ‘We don’t back up,’” Bassett says of his father, President and CEO John Bassett III. The elder Bassett has become widely known as a champion of U.S. manufacturing, admonishing fellow members of the American Furniture Manufacturers Assn. to stay competitive. He even recently pitched U.S.-made furniture on, of all places, “Good Morning America.”

“You don’t expect to see John Bassett on ‘Good Morning America,’” Wyatt Bassett says. Yet, there he was the morning of April 23, showing off the company’s two new Elvis Presley Collections of bedroom furniture, the traditional “Graceland” and retro-style “Hollywood” with its white leather bed. Both, John Bassett told television viewers proudly, “are made in America.”

At the same time Vaughan-Bassett has addressed competitiveness issues at its operations, it has also developed a furniture import program. But unlike many of its biggest competitors which have closed domestic plants to have entire lines made in China and elsewhere, Vaughan-Bassett only imports items that it does not make domestically. Wyatt Bassett says imported products represent between 5% and 10% of the company’s overall sales.

Taking a Stand

Invited to speak at a March 1 meeting of the AFMA’s Purchasing Division, John Bassett urged U.S. furniture makers to face up to the import fight.

“What we’re experiencing today is a sea of change. It’s not going to go away,” he said. “Let’s concentrate on what we can do.”

“One of the ways we get more efficient every year is to grow,” John Bassett says in a later interview at his company’s headquarters. He admits Vaughan-Bassett is going against the grain with its VBX program by focusing production efforts on large cuttings and an expansive warehousing program. Still, he argues that producing large quantities of a solid wood furniture product at one time is considerably more efficient than synchronous production, where small amounts of parts are machined to make as little as one piece of furniture at a time.

“If you don’t set the machines all up perfectly every time,” John Bassett says, “then there goes five pieces into the hog.” About 45 pieces are probably thrown away in a typical run, he adds. “If you’re going to run 125 pieces, then 45 rejected pieces are a lot. In 800 pieces, 45 rejects are absolutely insignificant.”

Wyatt Bassett says the company turns out large cuttings of a small number of SKUs within each suite, which he describes as “old-style manufacturing. It allows us to offer a great price at great value,” he says. “That’s the way you get a large number of people to buy.”

To illustrate his point, Wyatt Bassett says that instead of offering customers a choice of three-, four- and five-drawer chests, Vaughan-Bassett may just offer a five-drawer product, Wyatt Bassett says. “But I could probably sell you the five-drawer chest for the four-drawer price doing it this way,” he adds.

When Vaughan-Bassett buys equipment, it looks for high-volume capability, like the 15 computerized routers it uses at its three plants. Its two computerized carvers are each able to carve 10 pieces simultaneously. The carving machines work three shifts. “We run the life out of them,” says Wyatt Bassett.

In view of the extensive changes the company is implementing, Wyatt Bassett says he expects that the company will make more furniture at its three remaining finished-goods plants after the Atkins plant’s conversion is completed than in the four it operated last year. He adds that production efficiencies should lead to even greater output in 2003.

The company managed to keep all of its plants open during the recent recession, and excluding jobs lost in the Atkins changeover, has experienced no recent layoffs. Employees at the Atkins plant who stand to lose their jobs, will get hiring priority at the other three plants, Wyatt Bassett says.

Prices Set to Drop

With the move to the more efficient plants, prices of the solid wood furniture sold through the VBX quick-ship program will drop substantially, Wyatt Bassett says. He predicts that a suite that formerly sold from $1,600 to $1,800 wholesale will come down to $1,000 to $1,200.

     
 
Employees mark defects in lumber that will be processed on a Barr-Mullin optimizing system.  
     

Large cuttings require large amounts of cash, as does the ample inventory Vaughan-Bassett stocks. The company, having no bank debt, can afford to do things this way. “We don’t owe the bank a penny,” Wyatt Bassett says.

As price pressure from imports mounted over the last several years, Vaughan-Bassett studied what it takes to compete head-on, Wyatt Bassett says. “Right now our dealers are complaining a great deal about import delivery times,” he says. Six weeks from Asia is a minimum, he says, and many times it takes longer for products to arrive stateside.

VBX’s promised 14-day delivery in the East and 21 days in the West, goes down to 7 and 14 days in emergencies. “The VBX pretty much puts anybody else to shame,” Wyatt Bassett says. “Every dealer gets a phone call on every shipment,” he adds, to make sure the delivery truck arrives on time.

Quick Turnaround

“We have to process orders very quickly,” Wyatt Bassett says. With the office opening at 8 a.m., the credit department has until 11 a.m. to get orders to the traffic department, which typically gets them out by the end of the next day.

For the VBX program to work, Wyatt Bassett says, “We have to basically guarantee we’ll never run out of product.” To meet delivery deadlines, Vaughan-Bassett carries from $15 million to $20 million more inventory than in its pre-VBX days, and starts a new cutting of VBX-shipped goods when it still has an average eight to nine weeks’ supply left.

Unusual, Wyatt Bassett admits, but adds, “It’s one of the things that helps keep our factories running full-time.” He adds that the VBX program could not succeed without the cooperation of trucking companies. They joined the streamlining effort after Vaughan-Bassett asked them to deliver quicker at less cost to help keep furniture manufacturing in the U.S. The message from Vaughan-Bassett, according to Wyatt Bassett: “We’ve got no place to go overseas. We want and intend to be here together.”

Many suppliers, tired of seeing their business disappear over the Pacific, also agreed to meet Vaughan-Bassett’s requirement for tighter scheduling and lower prices, he says.

A Joint Effort

Employees pitched in when John Bassett told them at one point that he wanted to bring a bedroom suite out below the Chinese price. Ninety percent voted to adopt the necessary production rate, Wyatt Bassett recalls; production has since gone up 31%.

Sales have also been helped by a series of special price promotions and a retailers’ rebate program that, after the events of Sept. 11, promised a 4.5% rebate to retailers who met sales goals, plus a donation of 0.5% to the New York relief efforts in the retailers’ names. Nearly $1 million was sent to New York.

If Vaughan-Bassett is to be successful in the long run, though, Wyatt Bassett says the company must strive to continually improve every phase of its operations. With the furniture business changing at a fast pace, he says, “There’s no such thing as getting good enough.”

Elvis Presley Collection

By a stroke of luck or vision, Elvis has arrived in the form of two licensed bedroom collections at Vaughan-Bassett.

     
 
The Elvis Presley Armoire, featuring The King’s signature on the frosted glass door, is a key component of Vaughan-Bassett’s “Graceland” collection.  
     

Sales Vice President Doug Bassett, son of President and CEO John Bassett III, relates about the time he was stuck in Memphis several years ago during the anniversary week of Elvis’ Aug. 16, 1977, death. He said he complained to his father about the trouble he encountered finding a hotel room at which point his father asked, “Didn’t he die 20 years ago?”

“Yes,” Doug Bassett replied, “but his popularity lives on.”

“I think there may be something there,” the elder Bassett said.

On Jan. 8 of this year, on the occasion of The King’s birthday, Vaughan-Bassett announced its agreement with Elvis Presley Enterprises to produce two Elvis Presley Collections.

“Elvis Presley’s Hollywood” is a retro group meant to evoke the late ‘50s and ‘60s when Presley made 31 films. It is offered in two finishes — maple and natural cherry — and features three beds that retail from $499 to $999. The group retails for $1,799 to $2,999.

“Elvis Presley’s Graceland” is a traditional bedroom group in a rich cherry finish. There are two beds in the group which retail for $599 and $999. Signature pieces include the “Love Me Tender” bed, a “Burning Love” heart-shaped mirror and the Elvis Presley Armoire, which features Elvis’ signature on the frosted glass door. The price of the group runs from $1,999 to $2,999.

By early June, the first cuttings of the Graceland suite being made in Elkin, SC, and the Elvis Hollywood group being made in Galax, VA, were sold out, Doug Bassett says. That represents more than 1,000 suites of each product, he adds.

The introduction of the Elvis collections at the Spring International Home Furnishings Market in High Point led to an extraordinary amount of media attention, including “Good Morning America,” CNN, the Washington Post, the Los Angeles Times, the Japanese edition of Newsweek and the German version of People, to name a few.

In addition, Elvis Presley Enterprises has developed a Web site to hawk Vaughan-Bassett's newest Elvis Presley-inspired collections.

During the market, Executive Vice President Wyatt Bassett says he did an interview with a radio station in Tasmania, Australia, and also fielded a call from someone who asked, “Who’s your salesman in Germany?”

“We opened up someone in Iceland at the market,” he says, adding the company will soon be represented throughout Europe and in Japan and Australia-New Zealand.

Have something to say? Share your thoughts with us in the comments below.