Motorcycle News for Positive People

Let's talk furniture. Well, let's talk about a certain, almost bankrupt, furniture maker and how the company was transformed. If you look at what happened, we might see a few lessons for some motorcycle companies struggling through the slump.

Norwalk Furniture from Norwalk, Ohio, was having a really tough time due to the housing market being in the dumps, fewer new homes meant a lot less new furniture sold to fill them up, plus a lot of imported furniture was taking an increasing share of the market, squeezing the company from two sides. Just before the company slid into Chapter 11, Dan White and a group of investors, bought the choicest assets of Norwalk Furniture and started fresh with no union, little debt and a simplified business plan.

The new Norwalk chose a niche, custom furniture. Customers placing custom orders usually expect delivery within a month, tough for imports to do considering ocean shipping times of a couple of weeks.

Norwalk Custom cut costs by reducing the number of fabric choices to about 850 from 2,200 at its predecessor. It prices most of its sofas in a range of about $1,000 to $1,800, the lower end of the custom market.

Unlike the old company, the new one doesn't own or franchise retail stores, and it no longer owns the trucks that deliver its furniture. The furniture is sold through about 350 dealers scattered around the nation. ... the new management is better at consulting dealers before product launches.

Dan White knew nothing about the furniture business which helped him avoid the "that will never work" thinking often found when industries need to transform quickly. He did promote some veteran managers because you need some real experience to keep things moving but they were willing to look at everything. Employees needed to reapply for jobs at the new company and they're down to 120 from 325 workers at the former company.

Mr. White says Norwalk Custom's sales this year will be about $20 million, or one-eighth of the predecessor company's five years ago. But he says Norwalk Custom should be able to make a modest profit this year because it has stripped away so many costs.

What I found interesting was the civic pride among the investors and many Norwalk natives involved who wanted to preserve as many jobs as possible while producing a great product. Instead of setting up shop out of state or in another country, they asked, "How can we do this right here?"

In the previous article about motorcycle trends, Richard Pollock commented:

Which takes me back to my Triumph Bonneville of the 60′s theory. A starting point for any direction the owner cared to take it. Perhaps what’s needed is an OEM neutral chassis platform delivered to a shop where you sit down and discuss the style of ride you want with a build consultant. Order up a Cafe’ tank or a peanut chopper style tank. Choice of wheels, seat, bars and get the bike you want. An entire aftermarket could support variations on the basic bike package. As it is now, aftermarket companies have to select a niche and hope the fad lasts long enough for them to stay in business or they have to be able to leapfrog to the next niche.

Richard says a "universal bike" probably wouldn't appeal to anyone, which may or may not be true, but what he describes in his comment is a niche manufacturer, the niche is custom builds based on a common platform.

I read an interview recently with one of the bigger name custom builders of a couple of years ago, he said they used to build customer bikes the way they wanted to, not how the customer wanted it built. They charged high prices for their big name customs because it was so hot and trendy and customers just paid the tab. Unsurprisingly, they're pretty much out of the custom business these days. Gosh, what a shock.

If some of the smaller "custom" (which really means "chopper") manufacturers were willing to go more universal with a base motorcycle or frame and then present the customer with real choices, they might have something. They could also, as Norwalk now does, consult dealers before launching a new product to find out what customers really want. Who knows what might happen?

The point of all this is a slow economy requires some really creative thinking that goes beyond "cut costs and hold on until it gets better." You can only cut so long before you have nothing left, maybe you need to cut as much as necessary and then change direction. Narrow your aim with a niche and serve it really well. If the option is going bankrupt or trying something new, the positive thinking doers get their company down to fighting weight and move forward. Bad economy, no credit, government out of control, those are just excuses for sitting still. It's a great time to adapt to new conditions, especially while your competition is in disarray. Let's all get moving.

Link: Wall Street Journal

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