Hunter Douglas' future hangs on innovation
Monday, November 9, 2009
Last updated: Monday November 9, 2009, 6:45 AM
BY HUGH R. MORLEY
The Record
STAFF WRITER
Nice Story by Hugh R. Morley........
http://www.WESELLBLINDS.com
In the early 1980s, responding to the national energy crisis, the Upper Saddle River-based manufacturer created a blind that cut heat loss from windows.
The honeycomb like design, which formed a panel of insulation by trapping air inside the blind, is still the company's most popular product.
**Last month, Hunter Douglas announced that it had scored another conservation coup: the federal government agreed to give tax credits to buyers of a modified version of the 1980s blind, Duette Architella, under the American Recovery and Reinvestment Act, due to the blind's energy-saving properties.
**To Marv Hopkins, CEO of Netherlands-
"The American public wants highly functional products that are also attractive,"
The company, with its heavy reliance on new-home construction and home renovation, suffered heavily from the housing meltdown. Sales dropped in the first nine months of 2009 by 24 percent over the same period in 2008, according to the company Web site. Yet, after a round of cost-cutting and staff reductions, Hunter Douglas is poised to bounce back, Hopkins said.
"We are starting to see some recovery," he said on a recent morning. "Our business has started to improve. Our expectation is that it's going to be a slow recovery."
About two-thirds of the U.S. operation's revenue comes from home renovation and remodeling, and about one third comes from new home spending, according to Hopkins.
That's changed from the boom days of the real estate construction, when the company got about half its revenue from each, he said.
Britt Beemer, chairman of Charleston-based America's Research Group, said the blinds and shades industry, in large part due to its reliance on disposable consumer income, has slumped 20 percent to 30 percent since the recession began.
"It's not an essential purchase, it's a desired purchase," said Beemer. "The consumer is not doing anything that is a major purchase."
Stuart Hirschhorn, director of research at Catalina Research Inc., a Florida-based market research company, said Hunter Douglas accounts for about one-fifth of the $22 billion window shades, blinds and curtain hardware sector in the U.S.
He predicted it would shrink by 9 percent in 2009 but would likely recover in the second half of 2010.
Hopkins said the 60-year-old company realized in late 2007 that its market could face a significant downturn, and responded by accelerating some previously planned changes.
They included closing 10 plants and consolidating much of the production in three main plants, in Sacramento, Calif., Salt Lake City and Maryland, Hopkins said.
Those locations are key to ensuring the company can keep its customer pledge to deliver blinds within five to seven days of being ordered, anywhere in the nation, he said. The company, which takes pride in making its products in the U.S., also cut its workforce by 20 percent, Hopkins said.
These days, the company has about 6,000 employees, with 120 in the Upper Saddle River headquarters. In 2008, it had sales of $1 billion in the U.S., and $3.1 billion worldwide, Hirschhorn said.
Hopkins said the round of cost-cutting did not touch the company's 100 or so research and development workers, because they are essential to keeping a steady flow of new products coming. In recent years, new company products have included a line of cordless electric blinds and remote-controlled shades, he said.
Duette Architella is the first window shade to be awarded an energy tax credit by the federal government, the CEO said, adding that "we believe we have additional products that may qualify."
"Our roots, and our point of difference, is really innovation,"
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