Diversity, acquisitions drive growth

Jasper Seating Co. illustrates that sustained growth is still possible in the contract furniture market.

The Jasper, Ind., manufacturer grew sales by $20 million from 2004 to 2005 and jumped 40 positions to 132 in the FDM 300 ranking. How did the company achieve this degree of success? It attributes the sharp increase to a new acquisition and growth throughout its existing divisions.

Founded in 1929 as a seating manufacturer, the company today represents a more diverse enterprise. "When we started out, Jasper Seating Co. was the company," says Ron Beck, vice president of operations. "But we've expanded, and Jasper Seating is kind of the parent company now. We have six divisions underneath it that concentrate on certain markets."

Six divisions

The Community division manufactures wood chairs for the school industry; JSI provides office furniture and seating; Jasper Library Furniture produces workstations, tables, shelving and seating for the library market; Liberty Seating and Vintage supply tables and seating to the restaurant markets. Klem Hospitality, the newest addition, specializes in motel/hotel furniture.

In addition to a range of other products, each division offers some type of seating products for its respective markets. Today about 25 percent of Jasper Seating Co.'s product offering is upholstered seating.

Jasper has achieved growth in two ways, says Beck. In new markets, such as those served by Klem Hospitality, the company has enjoyed a newcomer's advantage. "It's a little easier to capture market share when you're starting out in an industry and developing relationships," he says.

There also are advantages to more mature markets, such as those served by the Community and JSI divisions. "In some of our other markets, we're experiencing some phenomenal sales relationships," he says, "and it's turned into higher sales."

This vigorous sales growth has continued in 2006. "For the first six months, I believe we're on track to do, annualized, between $65 and $68 million," Beck says.

Dealer relationships

According to Beck, contract dealer relationships are the strongest part of Jasper's customer base. "We do a lot of our sales through contract commercial dealers," he says. "One of our best assets is to maintain that relationship between the factory and the dealers. We've been really lucky to align ourselves with some really good contract dealers out in the field. They really push our products."

Jasper also revitalized its product offerings. "When we took over Klem, we kind of re-did the product line," Beck says. "We came out with new models, new SKUs." The company also introduced new models and discontinued weak sellers in the other divisions. "We try to keep the product offering fresh," he says.

Five Indiana plants in Jasper, French Lick, Ferdinand, Paoli and St. Anthony handle Jasper's manufacturing. "The five factories are doing nothing but manufacturing furniture, so we've got a little leeway to transport manufacturing from one plant to another," Beck says. "That helps us out with flexibility of lead times a little bit."

These manufacturing facilities encompass about 975,000 square feet of space. Of the company's 500 employees, 400 work in manufacturing.

A small percentage of Jasper's components come from China, Italy and Bulgaria; it also does some domestic sourcing. "We try to keep all channels open," Beck says. The Indiana plants also handle all the assembly, finishing and packaging of the company's products.

The company recently made a key change in the manufacture of its seating, with a switch from dowel to mortise-and-tenon construction. As part of the change, Jasper purchased about $2.5 million worth of new machinery from Bacci, Balestrini and CMS.

"We're doing about 3,000 to 3,500 chairs a week out of our Jasper plant," Beck says. "All that machinery that used to be dowel joinery got switched over into the more modern mortise-and-tenon equipment. It was a major investment on our part to change that over, but, boy, it really has paid off."

The company keeps an eye out for other growth opportunities. Before the Klem purchase, Jasper bought a building from Simmons Upholstery in Paoli. "We purchased the shell of the building from them and then just totally re-outfitted it with new machinery, finish lines and an upholstery shop," Beck says.

Continued growth

Both new acquisitions and new startups are viable options. "We haven't decided which way we're going in the future, but both of those are areas that we're leaning toward," Beck says. "We're continuing to grow and we're looking for new opportunities out in the industry. We don't leave any stone unturned, and that's been the philosophy of our company president Mike Elliott."

Since Elliott took over in the mid-1980s, Jasper Seating has grown from about $5 million in sales to almost $70 million today. "Mike has been a big factor in the growth of this company," Beck adds, "probably the biggest factor in why we've been so successful."

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About the author

George Lausch was a staff writer and editor for FDM and CabinetMaker magazines. He wrote feature and news stories for the magazines.