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COVER STORY
Preparing
for What’s
Ahead
Ron Zabel has great expectations for Springs and the
window coverings industry.
By Howard Shingle
Unlike so many others, the window coverings industry has weathered
recent economic storms and has stayed afloat. But is it flagging?
Has it leveled to a status quo? Just the opposite, says Ron Zabel,
president of Springs Window Fashions Division, Middleton, WI. In
this exclusive Q & A with Draperies & Window Coverings,
Zabel says the industry is likely to see a resurgence in demand
it hasn’t experienced in years.
“I don’t think [we’ve seen] the total impact of all of the
housing starts and housing transactions and interest rates—[even] as interest
rates start pushing a little higher now,” says Zabel. “I think there
is a lot of work inside the homes that people haven’t done yet because
they’ve been busy buying them. New home activity accounts for about a fifth
of window covering activity. There, the purchase needs is immediate. But with
regard to all of the existing home sales, I think it takes a long time for all
of the changes and choices people want to make to funnel through.”
D&WC: In your opinion, what is the state of the window coverings
industry?
Zabel: The state of the industry is good. But more importantly, our research
suggests that there remains a pretty significant potential for growth.
There are all the obvious factors that are interrelated—from interest rates
and refinancing to new home starts and record existing home sales to larger homes
with more windows and the influence that home decorating shows are having on
consumers. But we actually think that there is a somewhat pent-up demand. The
reason for that is because the industry really isn’t doing much from a
new product standpoint. We believe we can tap into that pent-up demand through
product innovation, through improved quality and through style and fashion change.
This is a challenge for all of us because of the cost of going to market with
all of these various product categories, I’m not sure we stay as fashion-forward
as we should.
Lastly, we believe that keeping service promises to consumers is really an important
point. Our research would suggest that’s been substantially compromised.
The best opportunity for a new sale will, most likely, come from consumers who
are currently purchasing. We think about a third of households are actively involved
in this category. Two-thirds are pretty ambivalent. So, it’s really important
to satisfy consumers when they are in the market. Most likely they’re the
ones who are going to be back, and if you’ve done a good job they’re
going to remember that.
Consumers have their preferred channel of purchase. The implication of this is
that all channels need to be developed to their fullest potential. Among the
first things a consumer does in the purchase process is they decide what level
of assistance and what level of style they’re seeking. This really determines
their channel choice—whether they go to a large national chain, or whether
they go to a specialty retailer or dealer—that’s
all pretty much determined very early in their process and, contrary to what
a lot of people believe, less than 10 percent of consumers switch channels once
this decision is made.
D&WC: How does Springs Window Fashions fit into this picture?
Zabel: Our tradition of providing quality window products goes back to 1939,
so we’re 64 years old. At that time we were known as the Graber Co. Today,
Springs Window Fashions is just one of several divisions that make up Springs
Industries. But what is unique about Springs Industries is that it’s really
the only complete home décor corporation that can provide decorating solutions
for an entire room with bedding, bath, floor coverings, drapery hardware and
hard and soft window products. We believe there is a tremendous future potential
through offering what we call integrated room solutions with all of these products.
Based on the current industry environment, we gain a significant competitive
advantage by continuously improving our product quality and setting a high customer
service standard in the industry. We are very, very focused on serving our customers
be they a consumer, a dealer, a designer/decorator, or a traditional large retail
outlet. We’re very committed to keeping our promises.
D&WC: Are there advantages or disadvantages to being a part of a
larger corporation?
Zabel: I think there are a lot more advantages than disadvantages because we
are all focused on providing solutions for the same home interior décor.
In a lot of corporations we would be a division that may or may not be directly
related [to the others]. There is a lot of synergy between us that really hasn’t
been leveraged as well as it could be.
The other thing that is really nice is that while we have all of those positives,
we also are given the opportunity to operate this business very independently
as a stand-alone business. We’re responsible to the corporation for our
results, obviously; but we’re responsible to provide our own capital and
we generate our own cash flow. So we don’t operate like most divisions
operate, we really operate as a freestanding entity.
It gives us the latitude to be flexible. It gives us a chance to respond quickly
to customers’ requests.
D&WC: Will this pent-up demand you mentioned be the factor that drives
the
industry in the near future, or are there other factors?
Zabel: What is driving the industry is a combination of economic trends and fashion
trends. Product news is what will get at the pent-up demand. Frankly, I can’t
judge that on the part of our competitors—and I don’t mean that in
a bad way, I just don’t know where they intend to go. We certainly intend
to be much more focused on new products and are much more focused on new products.
When you look at the factors driving the industry, there is one negative factor
and that's price. Price is one of the tough issues the industry must face. Some
in the industry are really losing
sight of the value they represent to the ultimate consumer. There
is substantial documented research that suggests that price is
not the most important element of the purchase decision. Yet, day
after day I see examples in the supply chain of just continuing
to lower the price of product.
There isn't any real value add or differentiation to that kind of strategy. The
supply chain really provides more value adds to consumers than that. Springs
Window Fashions is very much about selling value-added products. If the industry
continues to sell down, eventually consumers will not perceive any real value
in these products. It's important that everyone in the industry realize that
we're building custom products to satisfy specific consumer needs. Consumers
expect it-they expect to pay and they will pay for the service.
I would even go a step further and say successful designers sell themselves first
to clients. They deliver a great outcome because of their expertise, which nine
times out of 10 delights their clients. Seldom do they only focus on price or
products. Successful designers and decorators really focus on the solution that
the product provides. Consumers really want solutions, or they wouldn't need
the help.
I've been in the industry four years, but to me that's the part that has been
a big disconnect. There's just constant pressure on reducing price, which I don't
think is necessary.
As for other factors that are driving the industry, I think quality of service
has really elevated us in this industry. We want to provide the influencer-be
it a designer, a decorator or retail salesperson-with every tool they need to
become more efficient and profitable with every customer or client they come
in contact with. Consumers have specific style orientations and various degrees
of assistance they are looking for, and we want to anticipate those wants and
needs and then deliver solutions for our customer base that will delight consumers.
We have a philosophy here at Springs Window Fashions that we call "Best
Experience." This strategy permeates everything we do at every level-with
our customers, with our consumers and, most importantly of all, with our associates.
We empower our associates with a do-what-it-takes attitude to deliver this promise
to everyone they come in contact with, be it internally as we work together to
run our business every day or externally with our customers. By focusing on this
goal, we have become more of an industry leader and our associates say that this
is a great place to work.
"Best Experience" goes even deeper. It's about making promises that
matter and keeping those promises. Consumers are interested in you doing what
you say you are going to do. Whether it's quality products or meeting shipping
dates, we take our promises very seriously and we are happy with our progress.
But I would say in the next breath that we're realistic and realize we have a
lot more of the journey ahead of us.
D&WC: Are there aspect of this industry that surprise you?
Zabel: One of the things that has surprised me most about this industry is its
complexity. It's very complex in its product capabilities, the precise nature
of its componentries, all the different conditions in which these products have
to operate.
In addition to that, it's how dynamic the industry is from a distribution channel
standpoint. There are so many different places or channels that sell this product
category.
D&WC: Is there a particular market that is most important to Springs?
Zabel: There clearly is a different consumer segmentation that is designed around
each of our brands. Nanik is very, very high-end, Graber is comparable to any
of the top names in the custom window coverings market and Bali is a product
that is made extremely well but that we have tried to position for the more price-sensitive
customer.
All of those brands are growing, and where we're challenged is in finding the
marketing resources to make sure that our brands remain fresh and are as well
represented in each of their respective markets as they need to be. That's absolutely
a necessary investment we need to make every year in our business, and we do.
We focus on all of the channels where these brands are sold because we want our
brands to be available where consumers shop. As I have said, consumers, in their
purchase process, make that choice pretty early on and they tend not to bounce
back and forth. So it's pretty important that we be present where consumers will
shop.
I believe we clearly have potential with all of our brands in all channels. We
are really committed to being more important than we are today in the specialty
store, designer/decorator community. We want a greater presence there than what
we have today and we get there through our distributor/fabricator network.
D&WC: What are your personal goals for the next five years?
Zabel: I would like to help Springs Window Fashions become a company that thoroughly
delights its consumers, satisfies its customers and, most importantly of all,
provides security for the thousands of associates that we have. I think as a
business leader, my greatest responsibility-sure, I have a responsibility to
the shareholders to build this business-is really about assuring the future of
our associates. If there is a burden that comes with the job, that's it. It's
a big responsibility, but that's why I do this every day.
COMPLETE HOME DÉCOR
Founded in 1887 with headquarters in Ft. Mill, SC, Springs Industries supplies
leading retailers with a complete line of coordinated home furnishings designed
to simplify home decorating for every consumer.
Since its founding, the company has grown from a single mill to a company
with approximately 40 manufacturing facilities in 12 U.S. states, Canada
and Mexico.
It employs about 17,000 people, led by Chairman and CEO Crandall Bowles,
fifth generation of the Springs family to lead the company.
Springs Industries' major brands are Wamsutta®, Springmaid®, Graber®,
Bali®, Nanik®, Dundee®, Wabasso® and Texmade®. Major licensed
brands are Burlington House®, Harry Potter®, Liz At Home®, and
NASCAR.
For years, Springs Window Fashions has been a fixture in the window decorating
industry, but it actually started as two separate and competing companies-Carey & Co.
and the Graber Co.
Carey began operations near the end of the Civil War, manufacturing lamps
for horse-drawn carriages. It entered the window treatment business in 1906,
making
curtains and curtain rollers for automobiles. The company became Carey-McFall
after acquiring McFall Mfg. Co. In the late 1930s, Carey-McFall was producing
blinds for railroad cars and businesses, including wooden Venetian blinds.
Graber started in 1939 when founder John Graber invented the Badger Crane,
a bracket designed to hold drapery panels over Venetian blinds. At first
other
companies handled the manufacturing and packaging, but in-house production
began in 1942.
In the 1960s Carey-McFall introduced the Bali Custom Mini Blind. In the 1970s,
the company changed its focus to Venetian blinds and moved manufacturing
to Montgomery, PA.
At Graber, the 1960s and 1970s were years of growth and acquisitions, which
helped the company expand its product offerings to window shades, verticals
blinds and
woven woods, along with hundreds of drapery hardware items.
In 1979 Springs Industries purchased the Graber Co. Ten years later, Springs
purchased Carey-McFall. The two were merged into Springs Window Fashions
shortly after. Since then, Springs Window Fashions expanded its operation
by adding Nanik-a
high-end handcrafted custom wood blind manufacturer.
Today, Springs Window Fashions and its 3,000 employees manufacture and market
high-quality fabric, vinyl and wood window fashions and drapery hardware.
Its products can be found at many retailers including The Home Depot, Lowes,
Sears,
JCPenneys and Menards. They are also sold by many independent dealers and
decorators. |
