Ashley Furniture Industries Inc., Arcadia, Wis., is one exception to the rule for the residential furniture industry. Whereas many residential manufacturers have seen sales decreases or even closed their businesses during the past several years, Ashley continues to register significant year-over-year sales increases. In 2006, it tipped the $3 billion annual sales mark for the first time.
From 2005 to 2006, the company increased annual sales from $2.68 billion to $3.12 billion, an increase of $440 million or about 16 percent. That total earned Ashley the #2 spot in the FDM 300 ranking published in the February 2007 issue.
Why sales increased
Ron Wanek, chairman, says the reason for the 2006 sales increase is "innovative new product, on-time delivery and exceptional customer service, which offers our retailers very good gross margin return on investment."
The company's products include dining room and bedroom furniture, desks, occasional furniture, upholstered seating, recliners and other motion furniture, and leather upholstery. It distributes these nationally through furniture retailers, including Ashley Furniture Home Stores; department stores and catalog showrooms; it also sells internationally.
Ashley's six manufacturing plants are located in Colton, Calif.; Ecru and Ripley, Miss.; Leesport, Pa.; Arcadia and Whitehall, Wis.
In addition to introducing new product lines, the company has increased its manufacturing capabilities. "We have done both. In Wisconsin, we have expanded our facilities by 440,000 square feet," Wanek says. "In Mississippi, we have expanded by 180,000 square feet. In 2007, $100 million has been spent on fixed assets.
"The majority of our products are still manufactured in the United States," Wanek says.
Ashley's sales are up so far in 2007, he says. "But due to the sluggish economy, there is more difficulty with sales," he says. "The sluggish economy and the housing slowdown have affected the business." He also indicates that all areas of Ashley's customer base have been strong, "but not like in past years."
As for his outlook for the residential furniture industry, Wanek says, "The outlook is positive." And, if past successes are any indication, 2007 will be another strong year for Ashley Furniture Industries.
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