KREAMER, PA — The fate of Wood-Mode remains shrouded in uncertainty nearly three months after the company’s sudden, unexpected closure, while a potential acquisition of the iconic, 77-year-old custom-cabinet manufacturer apparently remains in limbo.
Weeks after Wood-Mode’s abrupt, mid-May shutdown rocked the kitchen and bath industry, Bill French, owner of Middleburg, PA-based Professional Building Systems of PA, a manufacturer of custom modular homes, said that he had secured an agreement in principle to acquire Wood-Mode’s name and corporate assets from owners Robert and Brooks Gronlund, and that he expected an agreement with the company’s prime lender, Great Rock Capital, to be finalized by no later than July 19. The potential acquisition, however, had yet to be finalized as of Aug. 1, its unresolved status subject to rumor and conjecture.
Wood-Mode, which experienced financial challenges for several years, had in recent months been seeking financing and other options, including a potential acquisition that would have enabled it to continue operations, according to company officials. Those efforts collapsed, however, when at least one prospective buyer backed away and Wood-Mode learned that its prime lender was unwilling to provide the necessary funding to continue operations. Wood-Mode said at that time that it had no choice but to abruptly shutter its factory, blindsiding employees, suppliers and government officials, as well as company’s extensive network of U.S., Canadian and South American dealers. Neither Robert Gronlund, who serves as Wood-Mode’s chairman/CEO, nor his son, Brooks, the company’s president and COO, have commented publicly since Wood-Mode’s closure.
French, who did not reply to inquiries from Kitchen & Bath Design News, was quoted last month as saying he was optimistic his acquisition bid would ultimately be successful, and that he made the tentative deal public in advance of its completion to allay the concerns of its 938 former employees, who were notified of the abrupt shutdown shortly before being escorted from the company’s 1.3-million-sq.-ft. facility by police.
French was also quoted as saying he would begin offering jobs to former Wood-Mode employees, with an eye toward having Wood-Mode’s factory re-opened on a limited basis by mid-August. French also said that hiring 200 workers would be a realistic benchmark in the months ahead, that a workforce of up to 500 employees could potentially be achieved, and that he was planning to contact Wood-Mode dealers in an effort to preserve relationships and secure future business. With the potential acquisition still pending, however, the earliest the Wood-Mode factory could re-open is now said to be no sooner than the end of August.
QUESTIONS LINGER
Even if French is successful in his acquisition bid, however, it remains uncertain what the timeline would be to get production ramped up, along with how Wood-Mode would handle the undetermined number of cabinet projects said to be in various stages of production at the time of the company’s closure.
Many have started relationships with alternative sources of supply. Others are still waiting, two months later, to learn the fate of cabinet orders placed prior to the closure. It is equally uncertain, if Wood-Mode is successfully resurrected, whether the revivified company could be anything more than a shadow of a company that, for decades, produced perhaps the industry’s most highly respected custom cabinet brand.
A revivified Wood-Mode, under French or any new ownership, would likely be operated on a far-smaller scale than Wood-Mode’s previous iteration. Simply getting the company up and running would doubtless be a daunting, months-long task, fraught with numerous – perhaps insurmountable – challenges. Aside from assembling an experienced management team, rehiring both new and laid-off employees, and gauging the status of unfulfilled cabinet orders, ownership would have to navigate through what will certainly be a complex maze of legal, financial and operational challenges. Wood-Mode’s new ownership would also need to regain the faith of laid-off employees, suppliers, sales reps and a dealer network left in a state of limbo by the company’s sudden closure.
Many of its dealers – once exclusive to Wood-Mode and its semi-custom line, Brookhaven – have since turned to replacement cabinet lines and begun the process of redefining their own corporate identities, while allying the concerns of consumers who have placed cabinet orders. Others continue to express frustration over the lack of clarity regarding the status of Wood-Mode.
In addition, lawsuits filed by several former Wood-Mode employees have charged that the company violated conditions set forth in the Worker Adjustment and Retraining Notification (WARN) Act, a federal statute that requires companies of Wood-Mode’s size to provide employees with 60 days warning prior to plant closures. Wood-Mode has contended that providing the 60-day notice would have precluded it from being able to sell the company or obtain the capital needed to continue operations. The company has also claimed that it falls under exceptions to the WARN Act that permit faltering companies facing unforeseeable business circumstances to act as it did. It claims that in closing the plant, it acted lawfully, in good faith and without malice or reckless indifference to employees’ protected rights.
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