Hot dollar spells end to furniture icon’s run
At 172, Ontario’s Gibbard Furniture is older than the country. But the family-owned business calls it a day
GORDON PITTS
From Wednesday’s Globe and Mail
June 6, 2007 at 1:21 AM EDT
It’s been 67 years since someone who wasn’t named McPherson commanded Canada’s oldest furniture maker, Gibbard Furniture of Napanee, Ont.
Now, that run is about to end, a casualty of brutal economics and human infirmity.
Owner Bruce McPherson Sr., 85, says he and his family lack the health and energy needed to combat a barrage of competitive challenges, topped by the recent surge in the dollar.
So he is putting the 172-year-old business up for sale.
Bruce McPherson, owner of Gibbard Furniture of Napanee, in his factory in Napanee, Ont. (Jorge Uzon for The Globe and Mail)
“It’s a way of saving the company and saving the jobs. We think there are others out there who can do a better job,” said Mr. McPherson, whose father, Jack, a former Gibbard sales manager, bought the factory in 1940.
“We’re getting a little long in the tooth, and health isn’t that good for either my sons or myself,” said the owner, whose three sons, Jack, Bruce Jr., and Tim, all in their 50s, have held senior jobs in the company.
It will truly be the end of an era. The McPherson family and the founding Gibbard family have been the only owners of the factory complex on the Napanee River, since cabinet maker John Gibbard first operated a water-powered mill there in 1835.
In its heyday, Gibbard was a strong niche brand, with a loyal following for its high-end, well-crafted mahogany and cherry household furniture. It also gained a cachet for furnishing the country’s embassies abroad.
But the company’s fate has mirrored problems in Canadian furniture manufacturing. It was hit in the 1980s and 1990s by the decline and consolidation of Canadian department stores. Outlets such as Woodward’s, Morgan’s, and Simpson’s disappeared, but the crowning blow to Gibbard’s sales network was the collapse of Eaton’s in the late 1990s.
The company has since been battered by a rising dollar against the U.S. greenback, and has been affected by the invasion of lower-cost furniture from China, which appeals to increasingly price-sensitive customers.
These factors are forcing many domestic manufacturers to close down, reduce their operations, or in some cases become furniture importers themselves to meet the price competition, said Murray Vaughan, president of the 40-member Ontario Furniture Manufacturers Association.
“I’m battling a real climate of negativity in the industry,” said Mr. Vaughan, who says furniture makers are so overwhelmed, they have trouble taking concerted action against the China and dollar threat.
Last year, Chinese residential furniture imports were up 27 per cent from the previous year, cracking $1-billion for the first time, says Terry Clark, acting chairman of the Canadian Council of Furniture Manufacturers. They represented 48 per cent of imports and 20 per cent of the home furniture and mattress market, said Mr. Clark, president of Accro Furniture Industries of Winnipeg.
“It’s turned the industry upside down and just created chaos,” Mr. McPherson said. “Companies that were so successful are right back on their fannies now.”
Gibbard is among those that have cut back. Sales, which once reached $12-million a year, are down to $6-million to $7-million and the company has been losing money the last couple of years, the owner said. The work force has fallen to 100 people, down from 160 in the 1980s.
He said he has received expressions of interest from U.S.-based furniture companies but is reluctant to sell this Canadian icon to Americans. He is opening up the sale process with the hope of attracting Canadian buyers.
Despite the price pressures, Mr. McPherson believes there will still be demand for the kind of high-end furniture that has been Gibbard’s mainstay. He sees a resurgence of timeless design and quality in a number of consumer categories.
But his family does not have “the fire in the belly that we had at one time,” he said. The company needs new blood, particularly in rebuilding the sales force and boosting marketing efforts, which have been allowed to languish.
“We’ve done a few things that we have ourselves to blame for,” he said, adding he believes prospective company buyers will be attracted by a solid dealer network and residual brand loyalty.
Furniture industry observers say there are ways to combat competitive threats, such as niche production of the type Gibbard makes, and fast turnaround on North American orders. But many factory owners are looking to retire, rather than take on a new business challenge. They are considering handing the business over to their children, selling it or closing it down.
As for Mr. McPherson, who was traditionally a hands-on owner, he has not gone to the office much over the past three months, as he copes with back and leg ailments from a disc problem.
Asked if someone might buy the Gibbard brand but close the factory, he pointed out that family has continued to maintain its production facilities. “The equipment is in top shape. Someone could just come in and make it more efficient.”
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