From Home Furnishing Business
Take 5: RUSSELL TOWNER
Samson Holding Company, which has built a reputation as a solid operator of furniture manufacturers in the middle and upper-middle price points, leaped into the design-driven and mostly domestically produced luxury segment of the market a year ago with the purchase of the tradition-steeped Baker, Milling Road and McGuire brands from Wisconsin-based Kohler Company.
At first blush, those ultra-high-end lines don’t appear to be a good fit for their new owner, but Baker President Russell Towner couldn’t be happier. He has the full backing of Samson to maintain their luxury positioning, and he believes they’re poised to grow and thrive now that the ownership transition is largely complete.
And having spent essentially his entire 24-year furniture industry career working in the high end of the market, it’s what Towner knows best. He spent 15 years in a variety of sales and marketing posts at Henredon, and then was president of Theodore Alexander USA for five years before taking the helm at Baker in March 2016.
He says the company will keep its corporate office in Hickory, N.C., a secondary office in Chicago where its visual merchandising and showroom staffs are based, as well as its network of 18 corporately-owned trade showrooms.
Towner recently spoke with Larry Thomas, senior business editor at Home Furnishings Business, about the ownership change and the growth prospects for the luxury furniture segment.
Home Furnishings Business: How has the Samson acquisition changed the way you do business?
Russell Towner: Very little has changed from an outward appearance. If you’re an interior designer or a dealer, there’s very little that you’re going to see in terms of change. Most of the changes have been in what I call ‘back of house’ areas. Under Kohler, we operated under a shared services model, so things like finance and IT were all corporate departments that were based in Kohler, Wisconsin. So we’ve had to develop and hire and fill those departments here.
Our new ownership has been great. They understand the furniture industry. They have a keen appreciation for Baker and McGuire. They have a desire to maintain our luxury positioning. And for the most part, they have bought into the strategic plan we have developed to move the company forward. It has been really exciting to have their support.
But what’s really exciting for me is to have the sale process behind us. We were effectively operating in a holding pattern in terms of implementing key strategic initiatives.
HFB: Do you still see good growth opportunities for the luxury segment?
Towner: I’m very optimistic about the luxury segment. I’m not sure I’d say one segment is growing faster than another. I happen to think there are winners and losers in each. I like our opportunities for success where we’re positioned today. We’ve got a rich heritage spanning 125 years in the case of Baker and 70 years in the case of McGuire, and they were founded on the principles of design leadership and superior craftsmanship. We remain committed to those things today.
As a team, we talk all the time about how we’re effectively laying the foundation for the next 125 years or the next 70 years. That has always been who we are. It’s not high-end one day and moderate price the next day.
HFB: What growth opportunities do you see for your brands specifically?
Towner: We’re focused on growth across all of our distribution channels, and within each of our brands. That growth is going to be driven from a number of different initiatives. From a product perspective, we’ve had a really good series of launches over the past 18 months. But beyond making sure our product offering is relevant, we’re also doing a lot of work … to make sure we’re offering an experience that is commensurate with our brand.
As an example, our team has developed a new showroom concept that we’ve started rolling out across our trade showroom platform. I think there are really two choices. It’s either price or experience. I think it’s much more difficult to operate in the middle of that.
The thing I like about experience is that everybody plays a role in it, whether you’re customer service, whether you’re shipping, whether you’re quality control, whether you’re the sales associate, whether you’re in the marketing department, or whether you’re in the merchandising department. Every facet of the business has to align to offer the experience. If you have any one of those that is out of whack, the whole thing beaks down. I like to be on the experience side of the game, and we’re working hard to make sure all of our departments are aligned around that.
HFB: Do each of your brands cater to a different demographic?
Towner: Yes and no. They each have their own niche. In broad terms, I would characterize Baker as being a more formal offering. It’s not traditional. It’s just a more formal offering that covers a broad style spectrum from modern to traditional. Milling Road is a more casual expression, but also runs that same spectrum of design styles. You could loosely say Milling Road is more youthful in its spirit.
McGuire, on the other hand, is rooted in a true California lifestyle because of that indoor/outdoor mix. I describe it in terms like casual luxury and unpretentious.
They do have their own niches. But a key point is that we see today’s world of design as being about mixing all of these things together. That’s how people live. People think (the popularity of eclecticism) makes life easier, but from a design standpoint, it’s much more difficult to execute properly. You have to have a real understanding of scale, proportion, and line to make it all work.
HFB: Have you adjusted your business model because of the furniture industry’s increased focus on the interior design channel?
Towner: It’s fair to say there are a lot more people in our sandbox today. (Laughs) But we have always been focused around the interior designer. I don’t have the exact number, but I believe that 90-plus percent of our product is a placed product. That means there’s an interior designer involved, whether they’re buying through one of our trade showrooms, whether they’re buying through one of our dealer partners, or whether they happen to be an interior designer on staff at one of our dealer partners. Very little of our product is sold as a regular retail transaction. So our focus hasn’t changed at all. We’re entirely focused on the interior designer as our key customer.
I think where we have had to change is acknowledging that (interior designers) may operate differently today than they did before. That goes from how they purchase to where they purchase to the tools necessary to interact with them.
HFB: Is most of your production still domestic?
Towner: Yes. About 85 percent of our product is domestically produced. We have a factory in Hickory that produces case goods and some upholstery. We have an upholstery factory in High Point. We also have a factory in Indonesia that does most of the McGuire line.
We had another factory in Indonesia that produced some of our Milling Road line, but we recently closed that facility and moved much of the work back to North Carolina. So for those who thought we were going to close factories (in the U.S.) and move production offshore because we were purchased by an Asian company, I would say we’ve done quite the opposite.