From Home Furnishing Business
Take 5: Alex Bernhardt, Sr.Chairman, Bernhardt Furniture Company
Lenoir, N.C., was once synonymous with furniture manufacturing. In fact, during the 1970s, when North Carolina cities required residents to display city auto tags, the Lenoir version proudly read “Furniture Center.” While the industry has seen hard times over the past two decades and some big name companies have disappeared, Bernhardt Furniture Company endures, reaching its 130th anniversary this year as a family-owned company based in Lenoir.
Alex Bernhardt, Sr., the company’s chairman, acknowledges that Lenoir and Caldwell County have had a difficult transition over the last 20 years, but they have emerged strong because the overall economy is much more diverse. Furniture remains a vital part of the region’s economy.
Bernhardt is now the largest furniture manufacturing employer in Caldwell County, with about 1,500 people. That operation comprises about half of the company’s total output, with the other half coming via imports.
Bernhardt, a member of the third generation of the Bernhardt family to lead the venerable company, is also the company’s self-described chief cheerleader. He is an occasional advisor and “top admiration giver” for the next generation, which includes his son, Alex Bernhardt, Jr. and his two nephews, Rountree and William Collett.
“I try to give advice only when requested, but I am still active in an advisory role on a fulltime basis with the company,” Bernhardt says.
Bernhardt sees his company as committed to its employees and to Caldwell County. He is proud of the fact that the company has no debt and operates globally with its brand while still keeping its community focus and commitment.
“Our headquarters is still in Lenoir and that helps in many ways because over the last two decades many of the managers of other industries, particularly furniture, have left Lenoir through buyouts, sellouts and mergers,” he says. “I am proud that we have survived and have touched as many lives as we have. But I don’t enjoy the fact that many of our other local good, strong, friendly competitors have exited Lenoir, because over the past 100 years, furniture has been important in our community.”
Bernhardt recently spoke with Home Furnishings Business to discuss his company’s current direction and how it has navigated the furniture industry’s constant change.
Home Furnishings Business: At a consumer level, brand recognition for furniture manufacturers has deteriorated over the last 20 years. Is consumer branding a viable strategy for Bernhardt?
Alex Bernhardt, Sr.: Consumer branding is very important to us and is something to which we are totally committed. We started this in 1982, so it has been 37 years that we have been advertising our brand. This year, with our national advertising, we targeted 140 million consumer impressions, which is No. 1 in shelter magazine spending in our competitive set. In addition, the internet has become so important and we are very active on the web. Our website has more than 7,000 visits a day, which I find pretty astounding. Also, we have almost 100,000 consumers who have opted into our database to receive updates. The more recent thing is social media. We are active on Facebook and Pinterest, but Instagram comes to mind. We have almost 140,000 followers, which I believe makes us one of the leading furniture brands. We are trying to have a consistent brand image across all of our platforms with photography, advertising, our internet presence and all of our graphics, including our trucks. We still believe in brands and we’re still committed to investing in it.
HFB: What is Bernhardt’s strategy to fill the void caused by the decline in numbers of independent furniture retailers?
Bernhardt: There has been some decline. I would say it has been more about change than it has been about decline. Some of the fine, old retail names that I grew up with when I started 50 years ago have disappeared, but others have emerged. A number of the good retailers we do business with have more stores and more floor space. Companies such as Baers, Robb & Stucky and Mathis Brothers have all seen internal expansion that has helped us.
Another major recent change is the demise of the store programs at Thomasville, Drexel and Henredon. Many of the owners of those operations have added Bernhardt to replace some or all of those previous high end suppliers. We are aware of the change and we are aware there is some decline, but we don’t see a precipitous loss of upper-end ability to present our products.
All of that notwithstanding, the biggest change for us in the last decade has been the addition of the design trade. By actively courting both the retail store and the local design trade, we have seen steady growth. An example of that would be our attendance at the High Point semi-annual furniture markets. We have approximately twice as many people coming through our showroom as we did a decade ago. The landscape is changing for sure and we are looking for, and finding, different channels to fill the void when we lost a higher-end retailer.
Another example of how we have found growth outside of traditional furniture stores is exports. While exports are not a major part of our business, it is an important and growing part. Ironically, our largest export country is China, which has just imposed tariffs on the products we ship to China, resulting in a decline in demand for our products there. We are feeling the effect of the tariffs, both on incoming parts, which we import from China, and also on our ability to export. We have also done private label manufacturing for specialty retailers for many years and will continue to do that quietly in the background.
HFB: What is Bernhardt’s e-tailing strategy?
Bernhardt: We are currently selling some limited parts of our line through e-tailers such as Wayfair and will continue to look at those opportunities while trying to create a level playing field for our traditional furniture retailers. One way in which we attempt to do that is by establishing minimum advertised pricing to give each outlet an opportunity for a reasonable profit margin. We do see continued growth in internet selling. It’s an inexorable tide that neither we, or anyone else is going to stop, so it’s best to find ways to participate constructively.
HFB: Bernhardt recently committed to entering the outdoor products category. Will this become an important category for Bernhardt?
Bernhardt: A number of our retail customers and friends have encouraged us for a while to enter the outdoor area and to bring our design leadership to that segment of the market. While there is no shortage of commodity products for outdoor, there is some shortage of fashion products with design and function becoming important. We see the growth not only of true outdoor, but also patios, enclosed glass porches, and other areas where the outdoor and indoor environment is blending together. So, we have been asked to take our indoor designs and replicate them for the outdoors. We will be launching our offerings this fall. We are excited about it and we do see it as an opportunity. Part of that will be manufactured in Lenoir and part
of that will be imported.
HFB: Bernhardt has always embraced design as a strategic strength. While achieving success in the commercial segment, the residential segment has been more of a challenge. Why does the consumer resist?
Bernhardt: We think with the consumer we target, which is an upper end consumer, fashion continues to be very important. They manifest that in the clothing they buy, the automobiles they buy, shoes and watches. They are very driven by brand and fashion. So, the emphasis on fashion may not be consistent across all levels of American consumer buying and all price levels of American furniture, but we believe in the niche that we target it is extremely important. That’s why our overall strategy is to be a leader in design backed up by a good brand.