Keller outlines strategy
By Powell Slaughter -- Furniture Today, November 3, 2003
Corydon, Ind. — Change is coming fast at case goods manufacturer — and now importer — Keller Mfg. under new leaders Keith Williams, president and chief executive officer, and Ken Fonville, president of the newly created Keller Design Center.
The broad strategy includes a bigger role for imports, revitalized and re-engineered domestic production, and acquisitions — the latter perhaps a surprise for a company whose sales have fallen in recent years.
"Keller intends to continue its solid-wood story, but we intend to go very broad in solid wood," Williams said, without going into detail. "We intend to go up the food chain in terms of style, and we intend to go with a robust import program."
Some of the company's new approach to product was evident at the October market. Keller showed complex painted finishes and its first complete bedroom from China.
Management also spent time at market discussing the company's financial status, and now is hitting the road to visit key accounts that didn't stop by the showroom.
"There are a few dealers we need to follow up with," said Williams, who joined Keller barely two months before the October show. "One of the things we're doing is letting dealers know that, although this company has had problems, we're in solid financial shape."
As a public company, Keller's financial statements are readily available. Its sales have sagged from a peak of $60.1 million in 1998 to $35.9 million last year.
But Williams said some dealers at market were surprised at what management had to say about Keller's situation.
"First, this company has no debt, and we have millions of dollars of cash in the bank," he said. "We've had some triple A-type investors buy significant shares in Keller since we came on board. In fact, what we're looking for is acquisitions."
Again, Williams wouldn't go into detail. But he did say that Keller's line should be 50% imports within a year.
"We do think there's room for both imports and domestic production," Williams said. "Our domestic product will be highly customizable, with very short lead times and differentiated customer channels."
He declined to be specific, but said Keller would invest heavily in information systems for its Design Center, the product development arm set up after the management change and headed by Fonville, the industry veteran who joined the company along with Williams in August.
The Design Center will use those systems to feed information directly into the manufacturing operation. Keller is consolidating all domestic production in its New Salisbury, Ind., plant, and moving its headquarters there by the end of the year.
The company already has upgraded finishing capabilities and at market unveiled its first painted finishes with Summerplace, a 40-piece collection of bedroom, dining and occasional in upscale country style mixed with Empire and other lighter, traditional looks.
"Our intent is to upgrade finishes throughout the line," said Fonville. "We're dropping the price of all our chairs about 20% as we move those to imports. Our new starting nightstand can lower the price of a suite at retail by $150."
The Keller Design Center got off to a fast start in rolling out product. In addition to its imported traditional bedroom group — Waterford Manor, available through warehouse or container-direct service — Keller brought out Cherry Creek, a cherry version of a best-selling oak group. Cherry Creek will ship before Christmas.
"Keller's had a history of bringing out one collection at time, and this market we had three," Williams said. "We're targeting seven for next market."
In order to accommodate more new product, at the April market Keller will occupy the entire 13th floor of the International Home Furnishing Center's Main wing. That will more than double its market space from 7,000 to 15,500 square feet.
