From Home Furnishing Business
TAKE FIVE: ALEX SHUFORD
The early 21st century hasn’t been kind to many of the furniture industry’s legacy brands, but Century Furniture has survived and even thrived despite recessions, a flood of low-cost imports and a tidal wave of e-commerce players.
Now positioned as the largest producer in the high-end segment of the market, the company is run by the third generation of the founding Shuford family – a group that wants to do more than just protect the brand and preserve the assets.
Company president Alex Shuford III says he and his siblings, in fact, are anything but protectionists, and they have the support of their father, Alex Shuford II, who remains Century’s chairman of the board.
The third generation took control of Century in 2013 when Alex II and his children, Nancy Shuford Bledsoe, Comer Shuford Wear, Eliza Shuford Hucks and Alex III acquired the company from CV Industries, another family entity that also owned textile producer Valdese Weavers.
Two years later, the new leadership spearheaded Century’s acquisition of high-end leather upholstery producer Hancock & Moore and upper-end brands Jessica Charles, Randal Allan and Cabot Wrenn. Those companies, along with longtime Century subsidiary Highland House, are now part of the Rock House Farm Family of Brands.
And last year, Century acquired the 200 Steele showroom building in High Point, N.C., where it will open a 40,000-square-foot showroom in April.
Alex Shuford III recently spoke with Larry Thomas, senior business editor of Home Furnishings Business, about the company’s growth strategy, its new showroom, and the challenges of running a family-owned business.
Home Furnishings Business: What is the strategy behind your recent acquisitions? Can we expect to see other acquisitions in the months ahead?
Alex Shuford III: We always keep our eyes on the horizon looking for entities that would be good fits for us. We’re a pretty young ownership and management team, so instead of being protectionists, we’re sort of expansionists. We think the industry needs a little bit of scale, and part of that comes from the regulatory environment…and from the way the operational side of the business works these days.
We think there’s a certain benefit to scale, but then it also tips the other direction if you start to get so big that the people leading the company can’t have their toes in the sawdust. Furniture is such a relationship business that at that point, it tips to the bad side. If you’re really small, you lose the benefits of having enough revenue (to hire) some of these really smart people who keep you from stepping on land mines. If you get too big, then the people who are trying to run it can’t connect with what’s happening at the factory level…and can’t connect on a personal level with the customers. It’s hard for companies in furniture to separate themselves purely on product. A lot of them, like us, separate themselves on a handshake and a history of trust.
One of the things that we’ve kind of make a blood pact in the family is that we’re not turnaround people. We don’t want to buy distressed companies because it takes so much time and energy away from the rest of your business. You might end up fixing the thing you bought, but then you look in the rearview mirror, and the thing you ignored while you were fixing the purchase is now also broken.
HFB: Why was Hancock & Moore a good fit?
Shuford: It’s a company that shares our values. They have a group of people that we feel like we can help take care of, as well as, or even better than previously. And it’s not a direct overlap to a segment of our own business. It would be silly for us to just buy another Century. They are a like-minded company that allows us to have a slightly different distribution, and makes us better in a product category that we’re not in at all or not in it as well as we could be.
Century sells leather, but Hancock and Moore is the undisputed leader in high-end leather. We shored up that wall of the castle pretty well. That’s a way for us to defend our flank in a big way.
When the owners were selling it, I think they were looking for a safe harbor to put their company. That’s very different than somebody that is motivated by just getting the most money for it. It was more important to them to find a good partnership for the people, than it was to just make the most money.
HFB: What was the rationale for buying the 200 Steele building?
Shuford: That was a different type of acquisition. It was more about controlling your own fate. It’s a beautiful building. It gave us an opportunity to pick our neighbors, and have the overall property really be reflective of what we’re trying to do at the product level.
If you can get all your brands into one building, then you can set the tone of how the entertaining will go, what kind of customer you’re going to attract, how the docks are going to operate, how the bathrooms are going to be kept clean, and so on. Our customers at the high end are very style and design-focused individuals, and those components within the housing of your brand matter to them.
Our goal is to get 200 Steele to the point where our customer has enough people to see in there … that they say ‘we commit a day to 200 Steele.’ It’s especially important in the inclement weather markets. (Laughs). We want to make sure there’s enough in the building to make them say they can’t skip it.
HFB: What are some of the key features of Century’s new showroom?
Shuford: It’s about 40,000 square feet, so it’s going to be a little smaller than our previous showroom. But we’re actually kind of excited about that. At Market Square, we had so much space (more than 60,000 square feet) and it was not linear.
Most people come to High Point and schedule their world around one-hour tours. The problem with Century was that during the last 10 minutes of our old one-hour tour, you had to be jogging. So you ended the tour kind of tired and not really remembering what you saw. Now, when people end the tour, they won’t be overfed. They won’t be rushed, we hope.
It used to be that a buyer would come to market, and buy 25 new settings. Now, they might be buying five. So each setting has to do more, and we’ve driven our business around configurability and customization. So instead of just showing yet another bedroom or yet another living room setting, we’re trying to show you a setting and then have a conversation about what it can do in its footprint.
It’s the sales per foot story. It’s the critical number for the modern era. So by shrinking (the showroom), we’re going to be more mindful of doing what we’re talking to our retailers about doing.
HFB: What special challenges does it present when you’re running a successful, well-established family business?
Shuford: The third generation can end up with a couple of characteristics if you’re not careful. They’re either not overly motivated by the monetary success of the business because that piece has been kind of given to them. Or they can get really scared about messing it up.
If they’re not hungry, they get out-maneuvered by more aggressive competitors. And if they get really nervous and scared about messing it up, then they get that decision phobia, and then again, they can get out maneuvered.
I think one of the things we do well as a third generation is that we’re not afraid to risk part of the business. My Dad has been pretty supportive of allowing us to stay entrepreneurial.
My Mom and Dad raised us on a working farm. We grew up mucking stalls and feeding horses after school. And in the summer we were bailing hay. There’s nothing like coming home from school and mucking 20 stalls with a pitchfork. (laughs) So there are no prima donnas in our generation.
HFB: What are your strongest product categories today?
Shuford: Occasional furniture and upholstery are kind of driving the marketplace right now. There are fewer and fewer true case pieces in the home, but there are a lot of tables.
Bedroom and dining room is a little bit slower and a little more price sensitive, and dining room is transforming. The formal dining room is giving way to these multi-purpose rooms. They might have a big table, but if you were to walk into that room anytime of the year except for Thanksgiving or Christmas, you might not see it laid out in the classic dining room way. The table may be against the wall being used as a big console to show off art objects, or it might be used as a big desk where the kids are doing homework.
The other piece of the market that is growing for is the outdoor living room. That has become pretty important to us. It has been a nice piece of growth over the years.
HFB: Is your business with interior designers growing faster than other parts of your business?
Shuford: Over the last six or seven years, it certainly has been an area of strength. But this year, the retail side of our business outpaced the interior design part from a growth standpoint. Both grew, but retail had a little resurgence, which was nice to see. I don’t know what the cause was, frankly. I was a little surprised to see that happen.
The pressure that’s on retail is very acute. Certainly, we’ve had some market share gains based on the programs we have done and some of the turmoil in the vendor ranks. If retailers are a little bit nervous or a little bit apprehensive, sometimes there’s a flight to stability. We may have benefitted from that.