Sauder to trim RTA product line by over a third
By Heath E. Combs -- Furniture Today, March 24, 2008
Archbold, Ohio — Ready-to-assemble producer and importer Sauder Woodworking will reduce the number products it manufactures by more than a third and will downsize its staff as it aims to operate more efficiently, the company announced last week.
The moves are part of Sauder's new Sustainable Business Plan, which aims to make the company a leaner operator.
Sauder said it will trim its product line from the approximately 1,100 SKUs it produces domestically today to about 700 SKUs by mid-year. The surviving products account for about 90% of the domestic line's sales, said Kevin Sauder, president and CEO.
The company will essentially exit kitchen and bath, other than what it produces for Ikea, and reduce its domestic SKUs in bedroom furniture, he said. He added that the company's import division, Sauder Global Sourcing, will pick up some of those categories.
The plan also will entail some restructuring in management and staff, with between 70 and 80 positions to be eliminated and a number of transfers and reassignments. Sauder has about 2,500 employees in its RTA division and about 3,000 in total.
"As the business has grown and become more complex, we have seen our fixed cost structure get out of alignment with the realities of this competitive marketplace," Sauder said in a press release. "It hurts us deeply to make these cuts, but the business needs to get back to a sustainable level of profitability."
The company anticipates most of the staff downsizing will be accomplished through normal attrition and cutting back on the use of temporary employees.
Sauder also said it will focus on customers that represent a majority of its sales. Smaller customers and non-North American retailers will be served with an improved online ordering process.
The company also intends to improve manufacturing efficiency and item availability, a press release said.
Production levels have remained steady in the first quarter of 2008 and sales are up slightly over 2007, the company said. But a sluggish economy and implementation of the business plan will likely result in decreased production in the second half of this year, the release said.
At next month's High Point Market, Sauder will show all of its products under one roof for the first time in its 220 Elm, space 218 showroom.
The company's Progressive case goods and Gruga office chair line will be displayed with Sauder's domestic and imported RTA collections.
