By Daina Darzin Manning
The old adage tells you to "do one thing, and do it well" but many companies these days are finding that multi-tasking is the better way to efficiency, increased profit and security in a turbulent economic environment.
Some are small shops, some giant conglomerates. Some started out as manufacturers, some as showrooms. All had different reasons for expanding their businesses. However, a number of firms surveyed by K&BDN seemed uniformly pleased with their diversified operations, citing many advantages and few negatives.
All of the fabricators/dealers interviewed have two things in common their focus is on countertops, and their companies have been around for a while. In these days of six-figure prices for computerized CNC-link woodworking and stone fabrication equipment, manufacturing requires a massive commitment and cash outlay, discouraging fly-by-night operations and instant start-ups.
In business since 1975, Westwood Tile & Stone, in Cherry Hill, NJ, sells and installs ceramic tile, marble and granite, explains owner Linda Stelmaszyk. The firm has been fabricating granite and marble countertops since 1985.
"We started fabricating initially because we were doing a lot of very high-end kitchens and bathrooms, and we were having a difficult time getting production as we needed it out of our local fabrication shop," she explains. "We bought a few pieces of equipment and began supplying our own jobs, plus a few of our dealers and contractors."
Stelmaszyk soon noticed increased interest in granite countertops and expanded her operation to the point where granite fabrication now comprises 60% of the firm's business.
Other companies started out as fabricators and added a showroom, while others began both aspects simultaneously.
"Manufacturing came first," recalls Cheri Bucciarelli, president of Quality Custom Woodwork, Inc., in Pueblo, CO. A fabricator of solid surface and laminate, the company bought a building in a great location, and decided to sell a cabinetry line as well.
One of the largest fabricators of Corian in the U.S., with 14 fabrication locations and six showrooms, Duracite also started out with fabrication, and added showrooms later, explains v.p. Stephen Crooks. Currently, it has different divisions that market to various segments: hotels, large contractors, Home Depot, retail and custom builders.
Western Tile and Marble has always combined being a dealer with fabrication. "We wanted to be able to control the quality of the product that we sell," explains Silestone sales manager, Stacia Early. The company has locations in Washington state, Las Vegas and San Francisco; it manufactures, fabricates, templates and installs granite, marble, tile and Silestone. The firm recently expanded its facility, adding a new slab yard for customers to look through to make their granite selection.
Starrow Enterprises, in Auburn, WA, still doesn't sell its solid surface and cultured marble, granite and onyx products to the general public, though the firm has opened a "contractor's showcase" showroom, explains CEO Natalie Barnes. "The contractors need a little bit more service, and they're not getting it in the home centers," she explains.
The showroom just features the firm's own products, and "it's been a very manufacturing-plant showroom." Now, its moved some of the active offices, so contractors can bring their customers in to select products.
"Our showroom is [mostly] countertops," says Ed Vangura, president of Vangura Surfacing Products, in North Huntington, PA, adding that Vangura also features such accompanying products as sinks. "A showroom is a necessity with stone. You have to be able to show the customer."
Vangura has been in business for 30 years, and manufactures laminate countertops, solid surface, granite and engineered stone. It started out with laminates, picking up solid surface in 1984 and granite in 1995. The latter required a big investment in tools, but the firm was prompted to get into natural stone because of many requests from its dealer base, Vangura explains.
Bill Hanvey, president and production manager of CalCustom, in
Santee, CA, notes that his company is also considering expansion
into natural stone. In business since 1971 with an emphasis on cast
polymer (cultured marble), "We've pushed our company as a single
source that can provide all [customers'] bath and kitchen
[countertop] needs in one package," he explains. "Consequently, we
almost have to be in the natural stone business at some point." In
the meantime, his company has grown from two to 110 employees, and
increased its product line to include bathtubs, showers,
backsplashes and sinks.
Pluses and Minuses
The biggest advantage of offering both fabrication and showroom is financial security, dealer/fabricators maintain. "Especially with the economic times we have right now, production builders are slowing down dramatically," explains Crooks. "So, we want to make sure we also have strengths in the remodel and residential and retail markets."
"When kitchens and housing are low, commercial will be high," agrees Bucciarelli. "It gives us a constant source of income."
Ability to control the product was the other big advantage cited by multi-tasking clients. "We are able to make specialty items," explains Bucciarelli. "In our commercial work, we do a lot of reception desks, nurse stations, media centers. That gives us the background to do some really great designs for, say, a kitchen island where they need something unique. It's very difficult to put it all together just using pre-manufactured items."
Stelmaszyk notes that fabrication allows her firm to control a finished product and supply a variety of hard surfaces for a project. "In custom bathrooms, we'll often do seats, tub decks, vanity tops, shelves and niches, all sorts of little custom touches," she notes. A granite order often comes in conjunction with a ceramic tile sale.
The other advantage to selling your own fabricated product is in profit level, though manufacturers warn that this area is fraught with potential problems.
"Immediately, you have a price advantage, because, being the manufacturer, you only have the one markup," says Hanvey. "So you get off-the-street clientele, and a fair amount of small contractors. But, we also have to be very careful that we don't undersell our dealers. It's kind of a balancing act. You have to make sure your retail price is as high or higher than your dealers' retail price. We never undercut Home Depot."
"You have to protect your customer base," agrees Crooks. "We try to keep our businesses somewhat separate. We actually have showrooms in areas where we don't have dealers."
"We try to protect our dealer network," echoes Early. "We charge a higher markup for retail customers for Silestone to discourage [retail sales]." She emphasizes that building trust with dealers and protecting that relationship is key.
Similarly, "some of our kitchen dealers also support ceramic tile showrooms," says Stelmaszyk, noting that they don't welcome competition in that area from their granite fabricator. "If retail customers are coming in with a new kitchen plan, we find out who their kitchen designers are. We generally don't quote wholesale prices to our retail customers."
But for the granite side, retail involvement on some level is a
must. Homeowners "love to go through tons of slabs and pick their
own piece," Early notes. In fact, everyone surveyed who fabricates
granite emphasized the importance of a consumer-
accessible slab yard.
Others, however, are not as enthused about the retail aspect.
"The retail market is tougher to break into," comments Hanvey. "[Retail selling] is time consuming and costly, and it's more client-intense because retail people are high maintenance."
"The retail customer is a lot more difficult to work with," agrees Crooks.
But Bucciarelli sees no disadvantages to being a diversified
company "except you get really busy," she laughs.
The CNC link revolution has impacted all of the companies surveyed to some extent, with the differential being the amount of custom work a company does.
Duracite added granite nine years ago, and made a considerable investment in machinery. The company's large operation is continually expanding and refining its equipment. "We have a granite shop that's the size of a football field," he says. "It's very automated, including conveyor systems."
Currently, Duracite is investing in machinery to further automate its Corian fabrication. The firm also plans to add showrooms and expand further into the home center market.
Bucciarelli made a huge investment in new equipment four years ago, and is very happy with the automated process. "It was always a struggle to keep [good workers]," she notes. "Now, we've actually eliminated the need for people because we have machines doing the work."
But Stelmaszyk points out that humans still have to run the CNC
link machines. "We do use some computer operated machinery, but
with what we're doing, every job is a custom job in some respects.
We're not doing vanity tops for hotels where you can set a machine
to repeat over and over again. So, we've been careful. We've seen
some fabricators that buy very expensive machinery and can't really
utilize it correctly because of the custom nature of the work." She
adds that the firm has a water jet machine, which uses
high-pressure water to cut stone, allowing for the easy and
accurate cutting of odd shapes.
Engineered stone figures prominently in the future plans of nearly every company surveyed. Vangura cites durability plus aesthetics as reasons for its appeal, and sees a bright future for the material.
"It's a great product," enthuses Early. "It has a mix between the features and benefits of solid surface and the look and feel of natural stone. I sold solid surface for years, and the challenges became greater and greater because people were turning to natural stone. Therefore, engineered stone is a great fit."
"We're going full speed ahead with Zodiaq," says Crooks. "We're finding the engineered stone customers are different [from natural stone clients]. People who buy granite want the uniqueness of picking individual slabs." Zodiaq customers, however, favor the look of granite without the re-sealing. "They're looking for a more maintenance-free product," he notes.
Stelmaszyk is more cautious in her approach to engineered stone. "Our interest in it is [only] for colors we can't get in granite. To mimic our granite colors would be counterproductive."
Vangura also cites important changes to the market. "The new 'big boxes' are out there and very active," he notes. "The market today is a lot higher quality, the kitchen designs are far superior, the products that designers have at their disposal are far better. They have the ability to maximize their creativity, more today than ever before."
All of which bodes well for companies that take a Renaissance approach to kitchen design and manufacture. KBDN