Managing a Legacy Brand
By Richard Wright
It’s clear that Kathy Juckett is very comfortable in her role as CEO of Telescope Casual Furniture. That’s because she understands it so well, and clearly stays abreast of changes that constantly occur – no matter how minor.
Pose a question to Kathy and her answer comes back in layer upon layer of information. When she stops, you know it’s not from lack of further facts. The topic could be sweeping (federal taxation) or specific (the ash content of pellets); it could concern manufacturing (hiding fasteners on MGP chairs) or sales (a new TV commercial for retailers). Her interests spread wide.
What comes across loud and clear is that this is a take-charge woman who has strong opinions, and the strength and information to back them up.
Granville, home of Telescope Casual Furniture, is a town of under 3,000 people in the upper reaches of New York State, positioned right next to the Vermont border. Jump in your car and head west and you can be on the shore of gorgeous Lake George in about a half-hour.
This is beautiful farming country, quiet, with rolling hills and defining mountains. Certainly, innumerable visitors must have uttered the phrase, “What a great place to raise a family!”
|The first building of the Granville, New York, facility being built in 1921-1922 and still part of the complex today.|
Ninety-two years ago, in 1921, when Henry Vanderminden I moved his sawmill operation to the area he most likely was more interested in the abundance of prime woodlands, the proximity of the railroad and the work ethic of local laborers.
At that point, the Telescope Cot Bed & Novelty Company was already 18 years old, with headquarters in midtown Manhattan. Eleven years later, in 1932, both sales and administration were moved to Granville, uniting all operations of the company.
Walk around the plant today and you’ll find a number of fourth and fifth generation members of the Vanderminden family working at a variety of tasks. Ol’ Henry I is their great, and great-great grandfather, respectively – and that sense of heredity and history is never far in the background.
The walk, led by Telescope’s CEO Kathy Juckett (born Vanderminden), takes quite a while. What began with that single structure in the photo at right now encompasses one million sq. ft., the result of adding, remodeling and stitching together 64 separate structures into one functioning factory and warehouse.
From cots and campstools with telescoping legs (thus the company name) the company has evolved to beautiful furniture of aluminum, cast aluminum, wicker, marine grade polymer and, yes, the company still manufactures wooden director’s chairs (for which it has been known for decades), as well as wooden arms for some beach chairs.
The wood comes from the well-managed 8,000 acres owned by the company. The forest also provides hardwood material for Telescope’s pellet mill, which heats its manufacturing facility; those pellets are also being sold to people in the community.
|Aerial photo of the nearly 1 million sq. ft. Telescope manufacturing facility.|
Hearth & Home: You must be the only patio manufacturer with 8,000 acres of forestland and a small pellet mill to convert that wood to pellets which heat your entire facility.
Kathy Juckett: “Wood is very, very important to us. We have always treated our forests like our favorite garden. Wood was really our only product for a very long time; from 1903 until the ’50s, everything was pretty much wood.
“Right now we have a very small pellet mill, but we have come to the determination that we need to purchase another mill because of the demand in the area for our pellets. They are the best pellets around because we don’t add any fillers at all. They’re pure hardwood.
“In our endeavors to be as efficient as we possibly can be, and as integrated as we possibly can be, we’ve found ways to utilize the best parts of the log for our operation, generate more fuel, both for heating our facility and feeding the pellet mill, and at the same time have a place to sell other parts of the log so that by the time it’s brought into the mill and put on the deck, 80 percent of the log cost is covered. That helps us to keep our director’s chairs at a competitive price.
“It helps us a lot not to have to pay for fuel, because if we have to buy dry fuel in the winter, it gets expensive. It’s nowhere near as expensive as oil, obviously, but it is expensive. So it keeps our fuel costs down. The more we put through the sawmill and the more waste product that we generate, the less fuel we have to buy.”
How many employees do you have?
Does that fluctuate a lot through the seasons?
Juckett: “No, not really.”
Does living in a small town present a problem in finding the right employees?
Juckett: “No. I don’t think the small town is the issue. The issue is more that we’re an incentive factory. You have to be fairly self-motivated to work here. You have to like to challenge yourself. You have to be motivated as a person to want to make money. We can’t figure that out until the person is actually here. That’s more of a challenge than the locality.
“Granville is a small town, but there are several Vermont towns within a 30-minute commute with a very large population. We get hundreds and hundreds of applications when we put out the ‘Hiring’ sign.
“People can make a good living here, but they have to produce, and it can’t be less than good work because all the piecework rates are based on finished good product. If you make bad product, then you get a much lesser rate of pay for those pieces. If you keep doing it, then you have to have some very uncomfortable discussions.”
|Kathy Juckett with Josh Wilson, overseeing the operation of the Gardenella Sling Chair work cell.|
Here’s a tough question. Do you have any idea how many Vandermindens are working in the company today?
Juckett: “(Laughs) Well, I know the ones that are claimed as Vandermindens, but I don’t know how many illegitimate Vandermindens there might be!”
(One of the legitimate ones is Bob Vanderminden, Kathy’s father and a third generation Vanderminden who, at 86 years, is still in the plant on most days, putting his engineering skill and vast experience to work.)
What are the positives and negatives of working with family members?
Juckett: “The positives are that they are as invested as you are in making the place go. The negatives are that sometimes it’s hard because you have a whole relationship with these people because you grew up with them; they may be your children or your brother or your sister or your father. At times it’s hard not to have your philosophical differences become personal.
“One of the things that makes us successful is that we do have philosophical differences, and we do have a mode where we just agree to disagree. But we’ve learned through our history that somebody has to be the ‘buck stops here’ person. It can’t be by committee. It has to be one person. But at the end of the day we generally end up in agreement and that’s a true story.
“The other thing we do that is hugely important is have very important non-family members in the mix as well to make sure that we don’t miss anything. So two of the officers that we have and one of the directors are non-family, and they have the courage to get into the debate if they have to.
“Vandermidens, for the most part, don’t begin with big jobs here, I can tell you that. In my case, my father tossed me out in the factory when I came to work. Back in 1979, a woman did not go out in the factory from the office. He chucked me out there and said, ‘I want you to keep your eyes open and your mouth shut and don’t come in and tell me anything that needs to be changed until you know everything inside, outside, upside down and backwards that you need to know.’
“I didn’t even get paid for the first six or seven months that I was here; they weren’t sure they wanted to keep me.
“That was an amazing, amazing gift my dad gave me, because I use that knowledge and experience every day of my life in my career here. I make better decisions because of it, and I still stay in very close touch with the factory. I get out there every second I can because the answers to the problems – the internal things we’re talking about when we have production issues or productivity issues or quality issues or whatever – are there on the shop floor 99 percent of the time.”
|Kathy Juckett (at right) inspecting and reviewing chair sling sewing with Marguerite Fay.|
(Being out on the factory floor with Kathy Juckett is an eye opener. Not only does she produce a steady stream of history and current information for a few hours, she does so with pauses to say hello to workers – by name and with a smile. When asked if she knows everyone by name, she answers, “Well … yes.”)
In which countries are Telescope products now sold?
Juckett: “Brazil, Singapore, Lebanon, Dubai, China just to name a few. There are several others. We’ve been expanding our international business quite a bit in the Caribbean and in Hawaii recently. We’re also in Mexico and doing well in Brazil.”
Do you regard international sales as a major growth area for you?
Juckett: “I see it as being a growth area. I don’t think it’s going to be our biggest growth area, but it certainly is a growth area and has proven that to be true in the last two or three years. One of our buyers from China has been working on opening a whole series of stores for us. He buys American products because there is an upper-middle class developing in China that wants American-made products.”
Made in America is certainly a big thing for you, isn’t it?
Juckett: “Yes. I haven’t sat down and calculated it, but probably 90 percent of our products are Made in America. The only things that aren’t made here are our wicker lines, which are made in China, and a few cast items. Some of our smaller cast tables, all of our cast components and our newest Ocala cast chair are Made in America right down the road in Cambridge, New York.”
Let’s talk a bit about channels because that’s a major issue these days. I know the specialty patio channel is still very important to Telescope and a lot of other companies. Can you tell me what percent of your sales go through that channel today?
Juckett: “I would say 60 percent or so. That’s a guess.”
We’re still losing patio retailers. Do you envision that channel becoming healthier than it is, perhaps with new players entering as housing and the economy return? Five years from now, will you still be saying, “I’ve got 60 or better percent of my business going through that channel”?
Juckett: “I hope so, because we’ve taken a very aggressive approach over the years to gain market share with the specialty retailers that are left. Some of the products that we have, some of our competitors have given up on. So even in the times when specialty has gone down, the number of specialty retailers that we have has actually gone up significantly each year. We’re adding new customers every year.
“I don’t see that getting any less. We do see that the bigger patio stores have done quite well, but they are the ones that survived the last big trauma. It’s the little guys that are still struggling and it’s tough for them.
“Marine-grade polymer has been a driving force in bringing us new retailers that maybe haven’t done business with us before. Marine-grade polymer products are definitely gaining us entry into areas where otherwise it might have been more difficult. That has definitely been a positive force for us.”
I’m still very surprised that a lot of other manufacturers haven’t jumped on that bandwagon.
Juckett: “Oh, they are. I think they were sitting back, waiting, and letting us be the guinea pig to see if it actually worked. I think we have taken the lead in moving marine-grade polymer to a different level, making it kind of a household word and educating people that it’s not the same as a lot of other products made by the original people who started making Adirondack chairs out of this type of material.
“Marine-grade polymer is so much more cleanable and it’s colored through and through. Even if it does scratch, it’s not an eyesore. There are just so many advantages to marine-grade polymer (MGP). One of the disadvantages is that the sheeting is actually way more expensive than the other types of materials out there in the market. But we’ve been putting a lot of point-of-purchase info. on the chairs themselves.
“I went to a doctor’s appointment with Dad and the doctor said, ‘We bought some of this stuff (resin furniture from another manufacturer) and it’s fuzzy, you can’t clean it, it’s disgusting and awful.’ So, of course, my Dad says, ‘Well, you made a bad decision. Now, you’re not going to make a bad decision like that when you’re fixing my hernia, are you?’”
(Laughs) MGP has been a wonderful product for you, hasn’t it?
Juckett: “Yes it has.”
Looking out five years or so, do you think that end of your business will double, quadruple? Will it be that kind of rapid growth?
Juckett: “No, I don’t think so, but it has been double-digit growth every year. Early on we hooked up with the folks that make the Starboard products, which they use for decking on high-end boats and things like that. So, for us, the material cost is a big portion of those products. The other thing we’ve done is to pioneer invisible connection points. We make them either all the way assembled or KD with two screws or so. Then we hide all the hardware so they look much more refined.”
Now you have, what, four machines making this particular product?
Juckett: “Yes. Routers. Yes.”
Are there any particular areas of the country where MGP products sell better than others? For example, near oceans or water of any kind?
Juckett: “Yes, absolutely. Because no matter what kind of powder-coat you have, unless you do some very expensive undercoating, saltwater is eventually going to bother your powder-coat. So this product is becoming much more popular in areas with a lot of saltwater pools where they like to set the furniture.
“People have been discovering that MGP is just great to have by the ocean because you don’t have the issues that you have with cast or aluminum and powder-coat because it’s corrosive. We’re finding that it’s becoming more popular in California and Texas where everybody has a pool, but most of them are saltwater. On the East Coast it’s also very popular.
“One of the other benefits is that it’s heavy. It doesn’t blow away. So it has appeal in the Midwest. Those are all factors that have been driving its growth and success.”
Let’s bounce back to channels. You’ve been in some interior furniture stores for years, but there now seems to be an awakening of the patio industry going back to its roots. However, High Point just ended and we’re getting feedback from some manufacturers indicating it was awful, horrible, lousy and terrible.
Juckett: “Well, that was not the experience we had at all, but we have designed a program and had a focus for quite a while on furniture stores, and we actually push our reps to go into the furniture stores in their territory and get some floor space for outdoor. Those stores are struggling, too, so they are always looking for new things.
“We have been doing this for about three years with furniture and have programs designed to help them get started with us so that they have a lower risk of investment, but an opportunity to test drive it. We’ve had some success with it.”
|Scott McCullen, reviewing schedules and capacity for CNC routers in the Marine Grade Polymer department with Kathy Juckett.|
What about the hospitality and design business? I believe that has become very important to you as well?
Juckett: “It has. That’s growing very significantly every year. We do put quite a bit more focus on it than we used to and it’s definitely gaining double-digit traction every year for us, which is really important when you have the specialty retailer channel about flat. It’s kind of making up the difference, which is nice.
“Then there’s always the Internet. Businesses have to figure out how to deal with the Internet. The last thing in the world that Telescope wants to do is compete with the specialty retailer because of their presence on the Internet. So for companies that we do sell to on the Internet, we have very strict rules about pricing so that they can’t undercut the specialty retailer.
“I think we can sell furniture on the Internet, but at the end of the day people want to sit in it. They want to look at it. They want to see what the color really looks like because it’s never exactly that. So I do think the Internet has its place, but we’re very conscious, very aware of making sure that our specialty retailers aren’t out there undercutting their neighbors by selling online either. So we take a pretty hard line. But we have to be realistic; it’s the way a huge percentage of the population shops.”
I noticed you’re on the Wayfair site. How does that work for you?
Juckett: “It works really well, actually, because mostly what we sell on Wayfair is director’s chairs, and beach and pool and folding, which are products that most of our retailers don’t carry. The same is true of Amazon. Amazon buys a lot of director’s chairs from us in a year, but our specialty retailers have had the opportunity to sell director’s chairs for 50, 60 years and they just don’t anymore. So we have been actively looking at other avenues.
“One of the only true defenses that the specialty retailer has had from the imports is the special order ability and quick-ship on special orders. That has helped the specialty retailer stay afloat, and a very big percentage of our business in a year, almost half of our specialty retailer business, is special order which, by the way, can really mess up the production process.”
If we didn’t have the specialty patio network, manufacturers would miss it enormously, I would bet.
Juckett: “Oh, there’s no question. We need them. We need them and we spend a lot of time, a huge amount of time working on things for our specialty retailers to help promote them. As a matter of fact, this year we invested in making commercials for our dealers to use.
“We spent a lot of time and did some research on the mediums that are most effective in advertising, and it’s television. People don’t read newsprint anymore. Most people don’t pay attention to the little flash ads that go across their screen on the Internet. So we created these really cool commercials, and our dealers have the ability to tag their own store for the last 10 or 11 seconds. We’ve had many dealers sign up for the program, so that’s exciting.”
What do you think is the most important issue facing the patio industry today?
Juckett: “I think the health of the specialty patio network is critical. It’s important for the manufacturers to find ways to help and promote those patio stores because they have been our backbone. Yes, things change and yes, things have their lifecycles, but I don’t believe the specialty patio store is going to be gone anytime soon.
“They have been hugely impacted by China in a very short span of years; essentially, China cut them off at the knees. So we manufacturers need to do all we can to help them, by creating programs, by listening to them, meeting with them, talking to them, trying to design products that are unique and different that can’t be bought in these Big Box places or in container programs.
“The industry really needs to stay focused on their health and well-being because they are very important to every manufacturer. I hope we can find ways to educate the public as to the importance of what they do for their customers that they don’t get anywhere else. People are getting sick of not being able to get service, and sick of not being able to talk to a human being. The specialty stores have all that, and the ones that are prospering are the ones that are really good at it.”