Draperies & Window Coverings recently had the opportunity to talk with Tom Marusak, Comfortex president, and ask him about the immediate effects of the acquisition on Comfortex and what it might mean for the window coverings industry.
"The immediate plans are to continue pursuing the goals and ambitions Comfortex always had in the marketplace with our products and with our customers and to grow the service of our products and the level of our participation in those channels we distribute to," Marusak said.
D&WC: Will there be an integration of products or will Hunter Douglas and Comfortex products remain separate and manufactured at current facilities?
Marusak: The product lines will clearly remain separate. There is very significant differentiation between our respective brand lines, and we will preserve that. However, there is some opportunity for Comfortex to add some dimension that Hunter Douglas can provide to our honeycomb line in particular. There are some performance capabilities that Hunter Douglas products can bring with some wide-width honeycombs that might be available through some of their other divisions. So we're looking at those possibilities.
From the other side, Comfortex has just finished participating in an international trade show [R + T 2000 in Stuttgart, Germany], and although Comfortex has a worldwide market position, there's no question that Hunter Douglas and some of its other divisions can really bring Comfortex products into a level of worldwide distribution that we on our own couldn't accomplish as quickly.
One of the basic concerns that Comfortex—our management team, our shareholders, our board—has always had is that it continue to grow in the communities in which we are located and continue to participate with those communities. In fact, part of our mission statement states that we seek to provide a maximum benefit to our employees, owners, customers and communities in which we reside through our successes. That won't change. I'm currently looking very carefully at growing certain of the facilities due to increases in capacity demands.
We have 500 employees and I'm especially proud of the executive and middle management team. We have put together a management team which I believe is world class and brings some real talent to help enhance and grow the Hunter Douglas organization overall. That team, which I'm expecting to be a major resource we bring to the party, will continue intact and we'll continue to grow that team.
D&WC: What is it about Comfortex that made it a viable acquisition possibility?
Marusak: I really can't answer on behalf of Hunter Douglas in this acquisition. I think Comfortex is well known as a leader in the supply of products and components to retail fabricators as well as to private label wholesale fabricators. That's who we are, and that's the accomplishment in which we take pride. Anybody who has looked at Comfortex has to recognize that value.
From Comfortex's side, the marketplace worldwide is changing not only through electronic trade, but in the whole structuring of distribution channels, the efficiencies of those channels and the real scrutiny as to where the value is added. As we continue to push forward with our retail fabrication distribution strategy and products specifically for that channel, the tie-in with such a strong and well organized firm as Hunter Douglas is worldwide really provides Comfortex with the opportunity to develop products faster, to integrate products into the marketplace more easily and to develop our market channel positions with less channel conflicts.
D&WC: The timing of the acquisition announcement followed rather quickly the resolution of a patent infringement lawsuit. How much of a factor did that whole situation play in making this an attractive opportunity?
Marusak: From my perspective, it was not a factor.
D&WC: The acquisition can be viewed as reducing competition. How do you respond to these concerns?
Marusak: We certainly have heard those concerns before and we've addressed them publicly as well as privately. Our position is that we will continue to serve and grow the channels that we're currently in and channels, by the way, in which we have strength and perhaps the Hunter Douglas brands don't have a position.
In regard to reducing competition, yes, the ownership is now common but the strengthening of our position in a channel which complements Hunter Douglas' channels will improve competition, will improve supply to dealers and will enhance the availability of products faster. Overall the opportunity for dealers, the industry in general and consumers will be enhanced as a result of this acquisition not diminished.
D&WC: What effect will the acquisition have on product availability and pricing?
Marusak:Product availability, as I mentioned, will be improved. As far as pricing, it's a competitive marketplace. It's quite fragmented and fractured the closer products get to consumers. There's a variety of distribution channels, component distributors and independent and brand fabricators not only in this country but worldwide, so if we look at any of the products that we manufacture we have to remain competitive because we are not unique any longer in any of the lines we offer. We have to make sure that not only are we providing our customers with a quality product, but that pricing is competitive with alternative supplies.
D&WC: How much oversight will Hunter Douglas exercise over development of products or pricing structure?
Marusak: If you ask me that next year I'll be able to answer that better. I'm anticipating Comfortex will be given a wide range of latitude on those issues. Certainly there will be integration, coordination and communication, but I'm expecting that this acquisition is based upon a reasonable level of independence and good business judgement. It's with that expectation that both parties are proceeding forward.
D&WC: Will Comfortex continue to support the Composer program?
Marusak: Oh most definitely. In fact, I'm most excited about how this acquisition really enables us to grow the Composer program well beyond what we could have accomplished independently. In size we've been the smallest player in the marketplace, and the smallest player has some advantages: we can move quickly, we have a label of independence.
However, there are real constraints that come with being the smallest player. This acquisition and merger with the largest window treatment supplier in the world supplies strength, product innovation direction and guidance and an ability to enhance our production capabilities by virtue of sharing in some technology and manufacturing support that will enable us to get our products out to Composers more timely and with higher levels of quality. I know that's something our customer base is seeking and expecting from Comfortex and now we can provide it with a higher level of confidence and assurance.