Take 5: Kevin Sauder

February 16, 2015  by in Business Strategy, Industry   

By: Sheila Long O'Mara

 

Kevin Sauder, president and CEO of Archbold, Ohio-based Sauder Woodworking, recently took the reins as chairman of the American Home Furnishings Alliance. He takes over as the industry is facing a number of regulatory issues and is sure to have a very full year. Sauder gave us a bit of his time recently to answer a few questions.

 

Home Furnishings Business: Share with me your outlook on the state of the industry for 2015. What are the challenges and what are the strengths?

Kevin Sauder: All signs point to a stronger economic environment for 2015, particularly with housing starts and the positive consumer feelings about lower gas prices. So we think furniture should have a good year. Sauder is booked solid through the first quarter.

Medium and higher-end furniture is a big-ticket, planned purchase, so it tracks more closely with consumer confidence, the stock market and housing starts. At the low end and in the ready-to-assemble (RTA) markets, we’re more tied to disposable income and the purchase of new electronics, such as TVs and computers. So we like to see low gas prices and innovations in electronics. 

We’re fortunate in the RTA industry to make a product that ships well to consumers and is immediately available in inventory. The dot com channel, whether Internet-only retailers or combining bricks and mortar with online retailing, is a real growth area for our company because it takes advantage of these benefits.

 

HFB: What is the biggest obstacle facing the furniture industry?

Sauder: Other big-ticket purchases like cars and appliances spend huge budgets on innovation and advertising, which builds brand awareness and consumer demand for the newest thing. Furniture retailers like Restoration Hardware, Pottery Barn, Ikea, and Crate & Barrel have done a nice job of defining their niche and creating real demand for their products. It’s harder for more full-line retailers and manufacturers to create those “gotta have it” products to bring in the crowds without being tied to Labor Day promotions.

 

HFB: What’s your perspective on domestic manufacturing?

Sauder: More than 90 percent of our products are made in Archbold, Ohio, because we have a very productive labor force and a highly automated factory. Where it’s impossible to automate major portions of the production process, we’ll still need to import some complementary items. Domestic manufacturing can be a real benefit to the retailer with quicker response times, less inventory risk, and better quality control. But the Asian factories continue to improve and often represent real value for long runs of popular SKUs.

 

HFB: Where does the industry need to move in regard to the regulatory climate?

Sauder: We used to be reactionary to government regulation, ‘Why are they doing this to us?’  But once we started becoming more proactive and getting involved upfront with standard setting and testing, the industry developed a healthier relationship with agencies like CARB, EPA, and CPSC. Sauder offers our internal chemist to work on formaldehyde standards and our product safety director to help design safety tests.  Ashley has done much of this as well. The AHFA also plays an important role in all of this. I think we need to keep being proactive to ensure our voice is heard and common sense legislation becomes the norm.

 

HFB: What would you like for your legacy as the 2015 AHFA president to be?

Sauder: I’m thrilled that they asked a guy who makes $99 TV stands for Walmart and Ikea to be the next AHFA president. The furniture industry is rapidly changing, the retail channels are evolving, and the regulations keep coming. We need to be very inclusive in utilizing the strengths of our entire AHFA membership and work together to grow our industry.