From Home Furnishing Business
Take Five Caroline Hipple
After upholstery producer Norwalk Furniture was raised from the home furnishings industry graveyard in 2008 by 12 Norwalk, Ohio-area families, the new owners brought in an Atlanta consulting firm called HB2 to advise the company on strategic planning and merchandising. They liked the work of principals Caroline Hipple and Dixon Bartlett so much that they eventually hired Hipple as Norwalk's president and Bartlett as vice president of merchandising.
Taking the reins at Norwalk a year ago has given Hipple a unique opportunity to put into practice the management principles she had been touting. In a recent interview with Larry Thomas, senior business editor of Home Furnishings Business, Hipple discussed why she went to work for Norwalk full-time,
the impact Millennials will have on the company and the furniture industry, and the close-knit culture that has enabled the venerable company to survive and thrive after its recession-induced shutdown.
Home Furnishings Business: What attracted you to the job?
Caroline Hipple: What attracted me was the potential. We have a 440,000 square-foot plant with very sophisticated and advanced equipment. That's the hardware, if you will. The software is this talented team. We get to be a part of the long and venerable tradition of building furniture with this fine craftsmanship. But because of the history and everything that has happened in the last eight years, we get to do it in a new way.
I believe the Millennial is going to change our world over the next 10 years. So, taking advantage of Norwalk's equipment and facilities, and using that skill to innovate and address this emerging market of 80 million consumers is right up my alley. That's why I did it.
HFB: So you see Millennials as a major source of growth in the years ahead?
CH: The oldest Millennial is 35. I think a lot of people erroneously see the Millennial as an Ikea customer or a Target customer. But that's because they were college kids not long ago. But now as they're turning 35, they're having babies, they're buying houses, they're getting married. So now is the time where they are going to start aging into better goods -- and there are 80 million of them! Remember, there were 80 million Baby Boomers, but there were only 42 million GenXers.
The dirty little secret during the recession was that there were also 30 million fewer buyers in the 35- to 50-year-old buying segment. Not only did we have a financial crisis, we also had a dearth of buyers. It was an industry set up for 80 million Baby Boomers. But there were only 42 million GenXers.
That's getting ready to change. But they're not going to buy like the Baby Boomers did. That means you have to have an online presence. You have to have retail experience points. You have to be where the Millennial wants to be met. That's a challenge to figure out how that's going to happen for a special order upholstery company.
HFB: Would you characterize Norwalk as a turnaround situation when you were hired?
CH: I really wouldn't say that. In 2008, Norwalk went away for six weeks. But since it has come back, it has had the best balance sheet that it has seen in decades. So it's not really a turnaround, but a shifting of focus and resources.
HFB: What is the biggest change you've made since becoming president?
CH: What I've had to do is crystallize the management structure into a participatory process that helps us realize the opportunities that are out there. We've been able to see some things and act very quickly because we have this participatory management structure. I'm not coming in from above and saying 'do this now.' Instead, we are working with the head of manufacturing, the head of finance, the head of HR, the head of marketing, and the head of merchandising on a regular basis.
Within six months of me coming on as president, we launched this partnership with Company C with 45 SKUs and a whole market devoted to it. That's very fast for something like that. But it was because of this participatory process where everybody is involved. People need to feel that their opinions are needed, and their ability to execute is needed. It goes faster that way. And it's more fun. Everybody knows what it's like (to be out of business), so they're just so invested in what happens. That's why we've worked hard to make sure there's a participative structure.
I've been to a lot of plants over the years, but there's just something different here in terms of the feeling they have about making it work and making it work well. It's a genuine appreciation for the history, the culture, and the opportunity. That's really a joy for me to be a part of. It's like that (trick) birthday candle that you keep trying to blow out. But that spirit won't blow out. That's Norwalk. It is an incredible spirit that burns inside. We (the executive team) just get to be the keepers of that flame. It's our job to keep that flame burning and find ways to keep it burning brighter.
HFB: Going forward, what are some of the keys to Norwalk's success?
CH: First, we have to have innovative products and fabrics. As a design-oriented, affordable, special order upholstery company, we have to have a really productive fabric line, which means everything has to be beautiful and useful.
Second, we have to meet the Millennials where they want to shop. We have to have great retail partners to accomplish that. I think it's really important to stay flexible and responsive. So managing that culture to be flexible and responsible allows us to manage all the change that is going on.
This is not your grandmother's or your mother's Norwalk. It has the great history of making great product and servicing retailers, but we have a chance to be fresh, innovative and really look at the world quite differently. That's why I'm so excited to be at Norwalk.
HFB: What happened to the Norwalk retail stores that were open when the company ceased operations in 2008?
CH: There were 72 franchised and corporate stores before 2008, but those franchise agreements were voided when the company went away. But many of our former franchisees and licensees just kept the name up and kept going. So you will still see Norwalk stores today (about 30 to 40), but those are independent retailers.
One of my biggest challenges is to make sure that all independent retailers know that Norwalk is a viable manufacturing partner. You don't have to have a whole store (of Norwalk products). A lot of retailers don't consider Norwalk because they think you have to have to be part of a franchise system. That's the main reason I advocated taking that first-floor showroom in High Point with those large windows, as well as our very visible space in Las Vegas. We wanted those showrooms to be big billboards to change the notion that you can't buy into the Norwalk system as a regular retailer.
HFB: Is it a disadvantage having your factory located in Ohio -- far away from upholstery manufacturing hubs in North Carolina or Mississippi?
CH: We think it might be an advantage. Dixon and I travel all over the world, so it's not like we are not exposed to (the latest trends and designs.) In our plant, what we want are artisans and craftsmen who can make the best product. We have master craftsmen, some of whom have been here for 20, 30 or 40 years, and we've started apprenticeships so younger people can work with them. We are creating our own community. It's an important place to work in our community, and people know it and revere it.
We're not on the 1-40 corridor (in North Carolina), so we're not competing for those same employees.
HFB: Is 'Made-In-America' an important part of your marketing strategy?
CH: We source as close to home as possible, not because we are jingoistic, but because we believe it makes strong community. Our reclaimed springs are from Indiana; our foam comes from Indiana; our wood frame parts come from the Amish factories all around us. And as much as possible, we source our textiles from the U.S. We are very conscious and intentional about creating community around us.
To a large degree, our retailers love that notion. But the 'Made in America’ is a part of a bigger strategy of creating community and local sourcing. That's more powerful, we believe, than just 'Made in America,' because that gets bandied about so much.