Child Craft may buy Keller plant
Top executives of both companies anticipate that Keller Furniture’s New Salisbury plant will be purchased by Child Craft, a major manufacturer of juvenile furniture based in Salem.
Keller CEO Keith Williams deferred all questions to Child Craft management, saying only that ‘They have made an offer on the facility. I would confirm that.’
Mark Suvak, Child Craft vice president and son of owner and CEO Bill Suvak, said, ‘All the major hurdles have been knocked out, and we feel confident that the closing will take place.’
The closing is scheduled for Nov. 1.
Keller and Child Craft have both suffered from a flood of furniture from southeast Asia which, produced with cheap labor and modern plants, has taken a huge share of the market and caused considerable downsizing at both businesses. However, it was a flood of water from Blue River that nearly closed Child Craft and is forcing relocation.
The east fork of Blue River running through downtown Salem dealt Child Craft a major setback in 1990 when 18 inches of water flooded the warehouse causing millions in damages, and it has never left the Suvaks’ minds.
Torrential rainfall associated with tornadic storms the evening of May 27 sent as much as six feet of water through the plant, leaving an enormous log wedged among machines on the factory floor and millions of dollars in lumber and inventory scattered along the banks of the Blue.
One container awaiting shipment was found 2-1/2 miles downstream in a field, Bill Suvak said.
Physical losses to Child Craft totaled about $10 million, but that number is much higher when the lost retail floor space is considered.
‘Our customers, regardless of how loyal they are, they have to continue to run their business,’ Suvak said, explaining that retailers were looking elsewhere for inventory.
‘The competition is fierce, and having a strong hold on the retail floor is priceless. We did have a fairly strong hold prior to the flood, and that is what we are going to be working diligently to regain over the coming year,’ Suvak said.
The total impact to the company was so severe that it was uncertain if it would survive the flooding. Child Craft was located in a flood plain, and its insurance was far from adequate.
Child Craft was founded in 1945 as Smith Cabinet Manufacturing Co., which produced television cabinets. The Child Craft division was created in 1954 and celebrates its 50th anniversary this year.
Eventually the demand for wooden television cabinets all but disappeared, but Smith had become a major player in children’s furniture. In its heyday, from 1990 through 1992, the business had about 1,200 employees. The name was changed in 1992 to better reflect the business.
‘We are the best name in the business, and we have been around longer than any of them,’ Suvak said. ‘It’s something that we have been proud of … that combined with our reputation for safety.’
But as with Keller, globalization has taken a toll on Child Craft.
‘We’ve been faced with these challenges for the last four or five years, and we are still placed with downward pressure on pricing mostly because of product from Asia. We can’t compete with wages as low as $50 a month in labor intensive industry,’ Suvak said.
‘We have to view it as opportunities not just a challenge, and I think the opportunity globalization can give us is to have strong domestic presence while benefiting from out-sourcing more labor intensive jobs … not to be just a ‘boxes-in boxes-out’ distributor but to control the safety quality while being competitively priced,’ Suvak said.
Prior to the flood, Child Craft’s employees numbered about 250. All of them were laid off immediately after the disaster and only about half have been able to return to work.
About 200 pieces of machinery were destroyed by the flood, eliminating the plant’s milling capabilities. Those will not be back online until after the move, Suvak said.
Should Child Craft close the deal with Keller, some minor construction and adjustments to the New Salisbury facility will be necessary, as well as the purchase and installation of new machinery and equipment.
Keller’s machinery and equipment is being sold at auction.
Additionally, crews will have to operate at both facilities during the transition, which will require two to three months, Suvak said. He said February would be an optimistic date for Child Craft to be fully moved in.
It’s uncertain how many employees will make the move with Child Craft, but, aside from keeping the New Salisbury property on the tax rolls, the move would likely benefit Harrison County by bringing employment opportunities in tow.