Decorator Industries: Switching Gears
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Written by Ashley McGown   
Wednesday, 01 July 2009
Decorator Industries: Switching Gears
Bill Johnson explains how this manufacturing and supply company is transitioning between markets and why it was necessary.
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Although the team at Decorator Industries does business in several markets, including manufactured housing, hospitality, and healthcare, until recently, the majority of its revenue was generated from within the recreational vehicle market.

In 2006, the Pembroke Pines, Fla.-based company began to place a significant amount of effort into expanding its footprint in the hospitality market. Although business was already flourishing at the time, the management team saw a great deal of potential in the hospitality sector.

“We’ve been a supplier to the hospitality industry for more than 30 years, but during the last few years, we’ve been more dedicated to growing that part of the company,” said Bill Johnson, president.

Decorator Industries: Switching Gears
Bill Johnson, president
The team invested in the sector by building a new facility in Abbotsford, Wis., which is now responsible for managing most of its hospitality business. It also doubled the size of its Red Bay, Ala. facility and now markets much more proactively.

The strategy proved to be a smart one. When the US economy began to unravel last fall, the recreational vehicle market was among the hardest hit. According to Johnson, the industry is doing exceptionally poorly this year, down more than 70% from 2008. Because recreational vehicles are both a luxury item and a big-ticket purchase, very few people have invested in them in recent months.

Although the hospitality market has also been affected by the economic climate, Johnson and his team see many more opportunities in that arena. “People still have to travel,” Johnson said. “They might not travel in as large a number or as often as they normally would, but a great number of individuals do still have to travel, and the properties have to be refurbished, which means there’s a demand for our products.”

When the team began to expand further into the hospitality industry, its end goal was to grow that sector until it made up approximately 50% of the company’s business. When the bottom fell out of the recreational vehicle market, Decorator Industries quickly reached that goal, but its route was far from ideal.

“For the first quarter of 2009, our work in the hospitality industry made up 58% of our total business,” Johnson said. “It’s a major component of the company now, and even though the path we took wasn’t the way we would’ve liked to do it, the shift has taken place.”

Investing in the future
To increase its capabilities in the hospitality sector, Decorator Industries recently invested in proprietary software that will allow its 100-employee hospitality team to work more efficiently. The organization partnered with an outside company to develop the system, which should be rolled out in the coming months.

“We’ve been working on the software for almost a year,” Johnson said. “It will allow us to better manage our business from start to finish, and it will help employees be more organized because they’ll have less paperwork.”

The proprietary system is programmed to create personalized to-do lists for each employee at the beginning of a work day, and tasks are organized according to their priority, marked with a date and corresponding color.  
“It should save us a lot of time because it will help everyone better understand what needs to be accomplished on a particular day,” Johnson said. “It will be easier for us to make sure projects are on schedule and moving through the system.”

According to Johnson, the software also consists of a centralized database that will allow everyone involved with a particular client to access any necessary files within seconds. After the system is successfully integrated at Decorator Industries, the organization plans to provide its clients access to the program, enabling them to check the status of their projects via the Internet.

A new beginning
When Decorator Industries was primarily focused on the recreational vehicle market, its existence relied heavily on the success of two major customers that dominated the industry. As a result, Johnson and his team found themselves in an unpleasant situation in March when both customers declared bankruptcy.

According to Johnson, when Decorator Industries entered the recreational vehicle market 20 years ago, it was a broader environment, but over the last two decades, it began to consolidate significantly. “In that environment, your success becomes wholly dependent on one or two big customers,” he continued. “This is something we’re going to try to avoid in the future.”

Moving forward, Johnson and his team plan to exit the recreational vehicle market almost completely, even if it turns around. Although the company will continue to supply pleated shades to the sector, it will no longer manufacture soft goods, which used to be the base of its operations.

“We are going to target sectors where we have a strong marketshare because that’s the only way we can sustain our business,” Johnson said. “We’re going to downsize the number of manufacturing facilities we operate, and we’ll continue to shift our efforts toward growing our footprint in the hospitality market, as well as the healthcare market.”

In terms of revenue for the coming months, the team at Decorator Industries is ambitious but realistic—making significant directional changes to a 56-year-old company is never easy, and the current economic climate only adds to the difficulty. Johnson said that if the hospitality group can repeat last year’s numbers, he will be satisfied.
 
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