Hickory Chair is betting on color

0:03This is Business of Home. I'm your host, Dennis Scully. Every week I'll be speaking to leaders and innovators from all corners of the home industry. My guest this week is Federico Contagiani, the president of Hickory Chair. Started over 100 years ago with a single product, Hickory Chair has grown considerably over the decades and changed hands several times, but it never left North Carolina. Out of a single facility, the company produces both upholstery and case goods, using the same techniques it has for generations. I spoke with Federico about the challenges of building a brand name in home, why design both is and isn't like fashion, and why, no matter what technology brings, furniture will always be a trust business.

1:10layered home. This fall at High Point, Lolloy introduced a breadth of new collections for all styles, all aesthetics, and all price points. Visit lolloyrugs.com to see what's new and sign up for a trade account. That's l-o-l-o-i rugs.com. Follow them on Instagram and TikTok at lolloyrugs. This podcast is also sponsored by Annie Selke. Rooms may come in different shapes and sizes, but that doesn't mean you have to settle for a rug with a so-so fit. Annie Selke, known for their best-in-class Dash & Albert rugs, offer more than 140 custom-sized rugs to suit not only any space, but also every style, from farmhouse to coastal and everything in between.

1:58Whether you opt for hand-tufted wool, durable indoor-outdoor, or natural jute, Annie Selke's custom-sized rugs will always give you a flawless fit down to the inch. To learn more, visit AnnieSelke.com. That's A-N-N-I-E-S-E-L-K-E dot com. And now, on with the show. As you and I were just recently discussing, you are a High Point veteran. And since we're just coming off of High Point Market, we did a quick recap show where we talked about our impressions of market. And we've heard from some people that some people did better than they were thinking they might. And other people, right, were a little disappointed maybe.

2:48But how did it feel for you? Honestly, Dennis, it felt great. We got incredibly good feedbacks from our designers and customers and accounts. Tell me what Highpoint means for you. Are you hoping to really write a bunch of business during Highpoint? Are you more concerned with people coming and seeing the new collections and networking and kind of getting people excited? Tell me what your hopes and expectations are. We don't write a ton of business during market. That's not the expectation. We work with designers. We know that designers may be working on projects that will translate into business in months or years from today.

3:31And that's totally fine. Were you thinking this was a lot of newness for you relative to past markets? Or how were you thinking? Because one of the things that we talked about a lot was people weren't feeling like this particular fall market was a time to spend a lot of money on newness. And this might have been the key. I don't know. We actually had the largest amount of new introductions since 1999. Bucking the trend. You know what? My plan is 2025, knocking on wood, should be a good year for our industry. Let's slingshot into that with as much product as possible. So we are not one of those companies that people expect to come up with a ton of new products.

4:18But nonetheless, I just wanted to come in hot and show as much product as possible. Within that context, what we tend to see a lot of when we come to high point, so Suzanne Kassler obviously had her big Bruges introductions and all of that that everyone was buzzing about. And then you've got various other very significant collaborations, David Phoenix and Rick Booth and others. Tell me what percentage of the overall product for Hickory Chair that represents. Because an outsider might think that's the majority of what you make, but that's not really the case. And you're absolutely right. It's not the case.

5:00We do have phenomenal partners. And I believe we have a beautiful mix of designs and tastes and even design languages, if you will, between these five players. But to your point, there is a lot of history. We carry on our shoulder 113 years of Hickory Chair legacy products. And a lot of the products that we still sell today come from the archives, come from the past 20, 30, 40 years of product development, which is an invaluable resource for us. That's a perfect segue into telling us the history of Hickory Chair. And that's interesting that you still lean on so many of the classic products that have been in the line for such a long time.

5:55So tell us the history. You know, Hickory Chair was founded in 1911, so 113 years ago. To give you some perspective, you know, there are not a lot of manufacturers, not only in the US, but in the world that's been around that long. It's also a manufacturer that has survived two world wars, the Great Depression, obviously 2008 depression, everything that happened more recently. It's a very resilient brand. It's a very resilient company. um so we started with one product that's why it's called hickory chair we used to make one dining chair and that was all that was all the company was making and that's how we started 1911 um then eventually of course it developed and added more products over the decades but um it's incredible to think that that's what what we started with um you know we uh we were probably the first company to start a licensed collection.

6:53We call it the Dorothy Robinson collection in 1931. In 1941, we follow with the James Reber collection. We still sell items from that collection. Really? That tells you how - That's great design for you. That's longevity. That's a great investment. So we kind of expanded over the decades and reinvented ourselves so many times. And of course, in the past two decades, we really focused on the designers and we lean heavily on them. And we kind of build the strategy around that distribution channel. And do I understand that Hickory Chair is still produced in the same facility that you had back in 1911?

7:47That is correct. Obviously, the facility expanded and grew. Since the one chair was the only product I imagined. Went through a fire, went through every sort of natural disasters. But eventually, we are still in the same location where the company was founded in 1911. We employ about 450 people here in Hickory, North Carolina. And we are uniquely one of the, probably, I think the only company I can think of that manufactures both upholstery and case goods under the same roof. That allows us a lot of flexibility in customization and being able to really control the supply chain in a unique way.

8:33So we are proudly American-made. We are probably handmade. We do have, of course, some items that we source from all over the world. But it's a very small percentage of our offering. But it's mostly product that we can't make. It's product that has stone and metal and alabaster, onyx, things that obviously are not native of North Carolina. Well, that's interesting because often when we talk to companies, the case goods is largely what went overseas, right? Absolutely. As we all know. And so that wasn't the case for your company. Why is that? It was a strategic decision. Manufacturing case goods is very challenging.

9:25It's a very expensive process. To make it simple, it's very hard to make money when you manufacture case goods. It is a labor intensive process. Of course, the material is expensive. Even just operating the factory on the case goods side is very challenging. Of course, today there are companies that manufacture a fantastic product overseas. It could be Vietnam, Philippines, you name it. But we still have control of what we make. We can still customize what we make. We can still reach the level of detail that otherwise we wouldn't be able to provide to our customers. And I feel that makes the difference.

10:18Interesting. You mentioned that the company has weathered all of these various economic crises and the world wars. I don't know if ironic is the right word, but I mean, poignantly, the biggest challenge, it seems like, wasn't everything going overseas as much as it was the roll-up of the FBI brands, the furniture brands, international, and all the brilliant minds that brought all these brands together. And eventually to an end. Exactly. And eventually to an end and to bankruptcies and a lot of challenges. And that was a sad time. We are currently owned by RHF. That is the company that controls the group of brands that includes Century and Hancock & Moore and Highland House and so on.

11:11And honestly, we need to be thankful for the Schroofer family and their commitment to this company, to this business. We went through, as a company Hickory chair, went through two bankruptcies in less than 10 years. And that's tough. It's not an easy thing for our customers. It's not an easy thing for the people here in Hickory. Being part of a family-owned group of brands is a luxury nowadays. and especially in the good ends of the Shuford family. I think this is the perfect home for us. It's interesting. You mentioned RHF and the Shuford family and Alex. So Alex had your job for a time when they first acquired.

12:03He did, exactly. First acquired Hickory Chair. And as I recall, he was pretty eager to hand that job off. I wonder why. This is really a dream. I don't know. Yeah, I don't know if he spoke about it as romantically as you seem to. But no, but I mean, he recognized, obviously, the value of it and the great history. But he was eager to find his replacement in you. And what I'm curious about is, as you just described, two bankruptcies in 10 years, there was a lot of disruption. There was a lot of turnover and all of the challenges that one might imagine go along with that. I'm wondering when he finally did hand the position over to you, lucky you.

12:51Thank you. I wonder what were some of the top orders of the day? What were some of the early priorities for you? You know, we operate in a very unique way. Um, we had a, um, we had an operating system, uh, transition, uh, from, uh, the previous owners. Uh, so we implemented SAP, uh, and that was a tough time. That's when Alex was here. So I'm imagining that that was part of the reasons why, uh, why it wasn't, uh, it wasn't so happy, but, um, that was extremely, extremely challenging time. Of course, COVID was an incredible period in our industry. We found ourselves flooded with orders. Our lead time expanded to something that was not manageable.

13:49So there was a lot of things to deal with and a lot of upset customers and a lot of issues internally to handle. And acquiring a new company is always a challenge again. So it was just a combination of factors that made it difficult. But I do believe that part of the reason this transition was probably more difficult than expected was the nature of the business itself. We provide an incredible amount of products. We customize for our customers. We do a high percentage of COM. So working with designers is not easy. Designers are demanding and we need to make sure that we respond accordingly. So it was a bit of a learning curve.

14:46Obviously, RHF has always worked with designers and Century and Highland House specifically are designer-oriented brands, but not to the degree where Hickory Chair was. So Hickory Chair, even more focused on designers, you feel? Okay. Yes, yes. It represents 75 % of our business. And the other 25 % is retail? It's a combination of retail and a bit of a contract and international business. Interesting. Okay. Okay. And a lot of, I mean, as you say, so a lot of customers own materials, a lot of custom, and often, I mean, often the question comes up, boy, that is a really tough model with doing so much custom versus some of the big competitors that just have inventory.

15:38It is. It is challenging, but standardizing is not the answer. It's not for us. And I don't think it is the answer for our customers. It's being able to provide a unique meal. It's something that not every restaurant can do. You know, we obviously have a menu, but our menu has a lot of variables and that allows you to have a very unique and tailored experience. And I think that's our strength. So you think that's the big, because I was curious to hear your thoughts about what Hickory Chair's big differentiator is. I mean, is that what you really feel that it's so customizable? It's definitely part of it.

16:25I think the customizable component is in high demand with our customers. Of course, we need to have our own identity. And I feel that customers will come to us if they can see themselves reflected in our brand. If we can represent their style, if we can represent their taste, they'll come back to make sure they fine tune our product the way they want it for their specific project. It's a combination of being customizable, but having a strong foundation to start from. Tell me a little bit about where you were before all of this and how you first got to America and what your background was and how you think about this.

17:15I came to America 14 years ago in October 2010, working for an Italian company. I had an Italian company that brought me here. Eventually, I made my way to Century Furniture a little less than seven years ago. And that's where eventually I transitioned and made my way to Hickory Chair. specifically I'm still managing the contract at international business for all of the RHF brands we like to keep ourselves busy yeah that sounds like a big job in and of itself but it's a it's something I love I think it gives me visibility to what happens around the world and I think that keeps us on our toes. And today's industry, I think it's the key to be successful.

18:14But before Hickory Cherub was specifically managing Maitland Smith, so a brand that is completely imported. So that's totally manufactured overseas. And here we go. We are in the exact opposite scenario in an American-made company. But I have a fun story of how I met Alex Shuford. Oh, please. Of all places, I was working in Vietnam for a company that manufactures in Vietnam. And as I'm sure you know, you don't drive in Ho Chi Minh City. It's something that you just don't do. Nobody wants to get into that kind of situation. But everybody has a driver. And I had a driver picking me up every morning at 7.30 to go to the factory.

19:06one morning my driver calls me and he says, hey, I just picked up a customer from the airport. Do you mind to share your ride with them? I said, no, absolutely no. They were coming, this customer was coming to the factory to visit it, to tour the factory. And sure enough, there was Alex Shuford sitting in the back of the car. And did you know who that was at the time? Oh, yes. I turned around, I was like, oh, hi. And we actually had never met before. And that was hilarious. But we spent two hours just talking. But that's how we got to connect. I think it was nine years ago now. And how long after that did you find yourself working with Alex?

19:53Two years later. Two years later. Yes. And how did that happen? Well, after our initial conversation and getting to know each other, I was ready for a change. And Alex, I believe, was ready for an addition to his team, specifically for contract and international. And that's how I started working with Century and with the RHF family of brands. and then eventually I made my way here. And to your point about distinguishing the brands, so here you worked for Century for a time, right, which is a brand a lot of designers know, and I'm always curious, okay, tell me what the big difference is between Hickory Chair and Century.

20:47That is a great question. There is a lot of overlapping. There is no doubt. We have a lot of products that can be specified for the same project across all of our brands. But to your point, there are some differences.

21:13In Century Furniture, you can find a wider spectrum of products that you can at Hickory Chair. Our offering is more limited compared to what Century has. I want to say that our lines are, our collections are designed with an eye to more European scale and proportion, slightly more feminine style. I'm thinking now of Suzanne Catholic, for example, that's, you know, that French inspiration and the more feminine kind of look that is very unique to Hickory Chair. So we have a few things that I feel like makes us who we are and differentiate from everybody else.

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22:53And now, back to the show.

23:01How does the company culture, I'm curious. So, I mean, you mentioned all these other brands that are part of the RHF family. And I wonder, what's the competitive environment like there? And you don't worry that Alex might be listening to this. No, no. He doesn't listen to the show. He would never. No, no. Well, I'm just going to do the smartest thing I can think of, and that's to quote what he said. Okay, okay. Quote the boss. And I think it's also the best way to put it. It's a family of brands, right? So we need to consider ourselves as siblings. And what do siblings do? They fight all the time.

23:45And that's okay. But the real key, the real difference is that whenever someone from outside of the family joins the conversation, the siblings team up. And that's when we become stronger. We need to compete within the family of brands. There is no doubt. When Alex did give you the position, and you talked earlier about COVID and what a crazy time all of that was, but I'm wondering what felt to you as the biggest priority. Because you strike me as somebody who's very visually focused, very design focused. I got the sense that you wanted that showroom to feel very different and look different. And so I got the sense that that was a big priority for you, but you tell me.

24:38You're absolutely right. I started with colors. Hickory Chair used to show in every possible shade of white. And I mean, I see it. I understand the reason. It's beautiful. It's classic. It's timeless. And you can really see the silhouette of every single piece. I get it. But it got... But enough. You were enough of that. Exactly. I mean, it was a little bit too much. And as I mentioned earlier, we do a lot of COM. 47 % of our business is actually customer-owned material. So it's a lot. Yeah, that's a lot. But that gives us visibility to what our customers like and want. and what we do, we cut a little two-by-two piece of fabric from every COM order we receive and that goes straight to our merchandising team and then eventually on a board and we build this rainbow of colors basically and we can see where the trends go.

25:47We see where projects go color-wise. The challenge is that that tells us what happens now. That's a picture of the current state of the industry. It doesn't tell us what's going to happen next. And that's our challenge. We need to try to understand and kind of look into this crystal ball and see what the next color trend will be. And that's what we try to do every six months. What else do you look at to try and predict the future? Well, easy answer would be fashion, right? We want to look at fashion and the trends, fashion trends and whatnot. I think our industry moves at a different pace from fashion.

26:34We are not seasonal. We are looking for something that can be trendy today and beautiful tomorrow. It's not necessarily what we look at, but we try to get inspiration from all sorts of industries. it could be jewelry it could be obviously fashion it could be even automotive I mean we look at anything that happens in the in the world that has a that has to do with beauty and and we try to translate that into shapes and colors and that's how you know we get into proud development well it's interesting because I mean to the point about the fashion industry and what we can learn So I spoke to the CEO of Room and Board.

27:23He said, Dennis, this is not a fashion industry. We shouldn't try to be like a fashion industry, right? But then you talk to Alex Bernhardt and he says, oh my God, of course this is a fashion industry. And it's so important that we keep up with what's happening in fashion. I mean, because we show twice a year at High Point, right? So I mean, in one sense, we're showing in the spring, we're showing in the fall. That feels fashion-y. Let me give you a twist to this. I think both are correct. I believe we are not a fashion industry, but we are an industry that lives in fashion. But I don't think we define fashion.

28:03I don't think that fashion defines us. Whenever you have to do with creative people, and that's, you know, I think that who designers are. Interior designers are creative people, colors, shapes. That's how they communicate. That's how they express their own style. And inevitably, we will always go back to fashion one way or another. Well, I mean, you seem very fashionable. So you and I had dinner recently in the High Point and you showed up wearing a fabulous velvet jacket of a lovely pale pink color coral perhaps if i recall and some right some some striking uh gucci shoes on your feet and i mean you were you were looking pretty fashionable and uh and and i would say at a at a different level than your average high point furniture fellow so i mean i get the sense that uh that fashion's a big part of of how you see the world i i can't help it dennis i think it's And to me, it's a way to respect my job and respect the people I talk to.

29:18I want to look my best. And that's a way, it's challenging because it's not a good starting point. So I have to really put effort in dressing up. But I just want to make sure that I show respect to the people I talk to and the people I meet at market. At the same time, I think we are ambassadors of our brands. And I think if I want to communicate at a luxury level, I have to present myself in that way. At least I have to try. I have to make an effort. It's part of the experience. I think walking into a showroom in High Point is not just the colors on the wall or the wallpaper or the rugs or the fabrics we use.

30:13It's how you are welcomed in the building. It's how you are treated and how you are fed and what kind of hospitality you find. And every single point of interaction becomes a memory connected to your brand. Stay with me on this branding conversation because recently we were having a passionate conversation about branding. Yes. And the struggle, and I don't want to put words in your mouth, but I mean, the struggle for furniture companies often is not necessarily having the margins to invest heavily in what it would take to really build a brand. Tell me your thinking on that. It's part of why we are not fashion.

31:08We are not fashion because we don't have the same margins they have. I feel we put a lot of quality in our products and we have to compete in a very competitive market. In order to do that, we have to be careful with our price point. And that's just natural. It's just part of the industry. I always say that at the end of the day, we sit, we sleep, we talk, we laugh, we live and we die on a piece of furniture. And the majority of people cannot name five brands. They can't. It's very hard. And I get it. We don't advertise as much as other people do, other industries do. We are not something that necessarily defines a status symbol.

32:08So people don't brag about it. Hey, look at this hickory chair sofa. I mean, as much as they would do with a Goyard bag. And that's part of our job, I think, is to make sure that our customers understand how much value and how much refinement goes in every single piece of furniture we make. And you have the additional challenge of not being in control of the majority of the spaces where your furniture is being presented around the country, which I'm sure drives you crazy. That is indeed the truth. But it's part of the game and it's understandable. Um, some of the, some fashion brands have come to the, uh, to the interior design world.

33:03Um, most recent, I think is Dolce & Gabbana and, uh, they have a very strict, uh, standard and guideline for the people showing the, the, for the, for the accounts showing their products. Uh, as I mentioned earlier, I mean, we don't do a lot of, uh, retail, so it's, uh, uh, It doesn't affect us as badly as it probably does with other brands, but our galleries around the country don't always reflect our standards. It's just part of the game. But the message to some of them is let's step it up a little bit here because some of your visual standards have slipped. I think it wouldn't hurt. You know, I think having the best possible foot forward will only help customers to buy into it.