Legacy Classic Celebrates 20th Anniversary

March 12, 2019  by Laurie Northington in Business Strategy, Industry   

The company created a business model for imported wood furniture that remains standard today, ignited the globalization of the industry and became the fastest-growing casegoods start-up in furniture industry history.

Kevin O’Connor, Richard Mihalik and Jerry Sagerdahl left Master Design to launch High Point-based wood furniture supplier Legacy Classic in 1999, when the industry was on the cusp of globalization. They joined forces with Samuel and Grace Kuo, who offered financial and production support through their Lacquer Craft Mfg. facilities in China.

At the time, only about 50 American furniture retailers could afford to purchase and inventory containers of value-priced casegoods manufactured in the Far East. Importing was cost-prohibitive because there were minimum-quantity purchase requirements, and up-front payment was required. At least 100 identical collections or items were produced in a single cutting, and the furniture was shipped immediately upon completion on a 40-foot container.

Legacy Classic was able to make business easier and more profitable for retailers by setting up vast consolidating warehouses in the Far East for finished collections, the first of their kind. They removed the minimum requirements, offered standard 30-day payment terms, and enabled retailers to mix collections and product types, reducing inventory costs and risk. Innovative and automated warehouses, along with a U.S. distribution center for quick-ship items and replacement parts, dramatically improved speed-to-market, from three-plus months to 45 to 60 days.

“It was a game-changer,” said O’Connor, who was inducted into the American Furniture Hall of Fame in 2012 for his transformative leadership in the furniture industry. O’Connor retired from Legacy in 2015 but remains a consultant to Samson Holdings, Legacy’s parent. Samuel Kuo also was inducted into the Hall of Fame, in 2017.

Jerry Epperson, managing director of Mann, Armistead & Epperson and an industry analyst, added, “Before Legacy Classic offered their mixed casegoods container model, there were only a small number of retailers in the U.S. who could buy an entire container of the same collection. Legacy opened up value-priced imported casegoods to three times the retailer base.”

“Legacy Classic was on the leading edge at a time when the world was changing,” said Irv Blumkin, chief executive officer of top-10 furniture retailer Nebraska Furniture Mart. “Their blended inventory strategy was a creative idea that many retailers wanted to be a part of.”

The new business model enhanced merchandising flexibility and product flow, increased inventory turns, reduced costs and boosted profitability for retailers and casegoods importers alike.

“We saw the way business was being done and thought we had a better idea,” said co-founder Mahalik, who was the logistics and distribution guru at Legacy before retiring about 10 years ago. “We were successful because the new value equation we offered was a win-win-win. It enhanced the retailer’s bottom line and gave the consumer better fashion and quality at a perceived value.”

“We were like a company on fire, and every month we broke another sales record,” said O’Connor. Added co-founder Sagerdahl, who is the current senior vice president of sales at Legacy, “We became the fastest-growing casegoods start-up in furniture industry history. From the time we started shipping in 1999, we had 20% compounded annual growth and hit $200 million in sales in 2005.”

When Legacy Classic began in 1999, the majority of bedroom, dining, living room and youth furniture was produced in the U.S., but Legacy’s disruptive new model served to ignite the globalization trend in the furniture industry. The impact of their business model was amplified when Legacy’s parent Samson Holdings purchased Universal Furniture in 2001. The sister companies leveraged synergies, and in 2009 began sharing a 350,000-square-foot, two-story High Point headquarters and distribution center on Penny Road that Legacy built in 2006.

Adding to Legacy’s success story was a series of hot-selling product introductions, thanks to O’Connor’s merchandising talent, observers say, along with the Kuos’ product development skills. Right out of the gate, Legacy’s traditional cherry European Elegance bedroom and dining room collection was a top-seller. But the real blockbuster was Vintage, a Louis Phillipe-styled bedroom and dining room introduced in 2002 featuring a sleigh-bed “with a remarkable amount of fire in the veneer,” O’Connor said, adding, “Within two years, it was a $50 million collection.”

“Legacy Classic’s (Vintage) was one of the best-selling collections in the history of the furniture industry,” Blumkin said. “It was a best seller for years.”

In 2004, Legacy successfully expanded into youth furniture with the launch of LC Kids, which received high marks from retailers. “LC Kids filled a very important void in the industry at the time for stylish, functional, quality youth furniture at a value,” said Keith Koenig, president of top retailer City Furniture in Florida. “Retailers fought over the LC Kids line.” More recently, Legacy Classic ventured into licensing programs with the Wendy Bellissimo youth and nursery collection in 2013 and the Rachael Ray Home collection in 2016.

Today, approximately 200 employees work out of Legacy Classic’s Penny Road headquarters and distribution center here that is shared with Universal, and Legacy operates a High Point Market showroom on Uwharrie Road. Combined, Legacy Classic and sister Samson divisions Universal and Lacquer Craft Mfg. ship over $500 million in sales, said Don Essenberg, president and chief executive officer.

As the company celebrates its 20^th year in business throughout 2019, “Legacy Classic is making its most significant business model change in our history,” said Essenberg The company is shifting from a China-based manufacturing and warehousing model to a multi-sourced, Vietnamese manufacturing model, allowing the company to offer a broader product and price point selection.

“Legacy Classic began with an entrepreneurial spirit that continues today,” he said.