KREAMER, PA — Dealers seem generally positive, though decidedly guarded, in response to the news that Wood-Mode is apparently experiencing a rebirth under a new owner who is optimistic that the cabinet brand remains viable despite being shrouded in uncertainty since the abrupt, mid-May closure of its factory.
Dealers contacted by Kitchen & Bath Design News expressed a willingness to give Wood-Mode’s new ownership an opportunity to rebuild frayed relationships, after learning that Pennsylvania businessman Bill French completed the acquisition of Wood-Mode’s assets from the company’s former primary lender. The iconic, 77-year-old cabinet manufacturer had been seemingly destined for liquidation since the sudden, unexpected closure of its Kreamer, PA factory.
Wood-Mode, under French’s ownership, began accepting cabinet orders last month, and the newly formed corporate entity, Wood Mode LLC, will begin production early this month, with initial shipments set for October, according to French.
“My message to dealers is that the old company is the old company and our new company is properly financed, and up and running,” French told KBDN. “We hope that a large number of our dealers will come back and do business with us. It’s understandable that they’ve been hurt by what has happened and have looked in many cases to alternative cabinet suppliers.
“We’re sad over the disruption this has caused,” French added, “and we know we’ll have to prove ourselves.”
While terms of Wood-Mode’s acquisition were not disclosed, the transaction included the Wood-Mode name, along with the company’s factory, equipment and inventory, according to French, owner of Middleburg, PA-based Professional Building Systems Inc., a manufacturer of custom modular homes. Neither of Wood-Mode’s former owners – Robert Gronlund nor his son, Brooks Gronlund – will have a formal role with the new company, French said.
Wood-Mode, which had experienced financial challenges for several years, had, under former ownership, been seeking financing and other options, including a potential acquisition. Those efforts collapsed in May, however, when at least one prospective buyer backed away from a deal and Wood-Mode learned that its primary lender was unwilling to provide the funding necessary to continue operations. Wood-Mode officials then announced that the company had no recourse but to abruptly shutter its factory, its employees escorted by police from the company’s 1.3-million-sq.-ft. facility.
Neither Robert nor Brooks Gronlund has commented publicly since Wood-Mode’s closure rocked the kitchen and bath industry, blindsiding employees, dealers, sales reps and suppliers – while prompting speculation about the factors that led to the seeming demise of a company. 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 that, for decades, produced perhaps the industry’s most highly respected custom cabinet brand.
The new company’s major challenge, according to French, “is to put ‘Humpty Dumpty’ back together again and demonstrate that our company is capable of producing a quality product that is shipped on time. Our other major challenge is to find the right people to do the job.”
French told KBDN that the new company is currently “getting organized,” with a priority on making repairs to its factory and equipment. Start-up, he noted, will “be gradual.”
French said he has assembled a management team of former Wood-Mode executives – including Director of Manufacturing Robert Gessner, General Manager Rod Hunter and Nick Yoder, in charge of finance – who will spearhead the hiring of maintenance, production, administrative and sales personnel. Hiring 200 workers is a realistic benchmark in the months ahead, with a workforce of up to 500 employees potentially being achieved, French said. Wood-Mode had 938 employees at the time of its closure. At its height, prior to the 2008 recession, the company employed some 2,000 workers, including many with long work histories and family ties to the company.
French said he was motivated to complete the acquisition not simply because he considered it “a good investment,” but because the plant closure and layoff of nearly 1,000 workers “devastated the local community and hurt a lot of great people.”
While a relative unknown within kitchen/bath industry circles, French is a prominent figure within the home-building industry. His company, founded in 2000, has grown to become one of the largest modular manufacturers on the East Coast, according to the corporate website, and French noted that there is “some synergy” between Wood-Mode and his building firm, which is now capable now of offering cabinet upgrades for its custom modular homes.
French told KBDN that he believes the Wood-Mode brand remains viable despite the devastating blow dealt to the company’s network of dealers, many of them long-term, exclusive business partners left in a state of limbo by the company’s closure and subsequent lack of clarity.
Many of those dealers – once exclusive to Wood-Mode and its semi-custom line, Brookhaven – have since turned to replacement cabinet lines, although a significant number would apparently be willing to continue with a revivified Wood-Mode, albeit no longer necessarily on an exclusive basis.
Most dealers he’s contacted have been understanding and willing to work with the new company, French said. “Only a few,” he noted, have thus far rejected the opportunity. Vendors, many of whom are owed money by the former company, have also been very cooperative and are offering the new company favorable payment terms, according to French.
“I think we’re going to have a successful company,” Wood-Mode’s new owner said. “We’re keeping expenses low, so I think we can be profitable, and we’ll be calling on a tremendous number of good people and outstanding dealers. We will have to prove ourselves, but in the long term, I think the Wood-Mode brand is in very good shape.”
DEALER REACTION
Dealers contacted by KBDN generally agreed with that assessment – to varying degrees.
“It’s been a fast-paced three months of crisis management,” said Alan Zielinski, CKD, of Niles, IL-based Better Kitchens, Inc., a long-time Wood-Mode dealer who said that Wood-Mode’s closure “was devastating for our entire industry.”
Zielinski said the impact of the closure on the company’s dealer network has varied. Some dealers, he said, “were understanding and some not, moving to other companies.” Similarly, he added, some cabinet consumers were understanding, and others were not – canceling orders and requesting a return of deposits, with hours of design work forfeited.
“Impacted, too, were mainstream and niche suppliers, some of whom have since gone out of business, as well as transportation and freight companies,” Zielinski said, adding that he received notification last month from Wood-Mode that the company was open for business and that French, in extending his thanks to dealers for their loyalty and dedication, “is looking build mutually successful business relationships.
“We’ve been told that the new management team is doing many positive things to help us in this transition,” Zielinski said. “As the oldest Wood-Mode dealer in the Chicagoland area, and with the huge investment we have in our showroom, we’re very happy to hear this monumental news.”
Other Wood-Mode dealers shared that sentiment – but with an important caveat.
“Having been an exclusive Wood-Mode dealer for nearly 30 years, you can only imagine the feeling when we got the news that Wood-Mode abruptly closed,” said Jim Mozer, owner of Glen Head Kitchens, in Glen Head, NY. “[But] I had no choice but to take that information and move forward in a positive direction.”
Mozer said that French contacted him recently, inquiring if he would continue with the Wood-Mode product.
“After a brief conversation, I felt Bill was a man of honesty and integrity,” Mozer related. “I told him that I would continue being a dealer if he was going to be the purchaser and providing that the previous owners were no longer in the picture. Bill assured me that they were not.”
“I’m extremely optimistic that the new Wood-Mode will be as good as ever, [but] I’ve also taken on a new line, so all my eggs are no longer in one basket,” Mozer said. “I’ve never had an issue with the Wood-Mode product, and I look forward to continuing with the product and to a successful relationship with new ownership.”
A similar reaction was offered by Jonni Huntley Spaulding, CMKBD, of the Randolph, VT-based Catamount Kitchens & Design, LLC.
According to Spaulding, her design firm, in the wake of the Wood-Mode closure, added new cabinet lines and now has “a broader base of cabinetry lines to share with clients and allied design professionals.
“We’re excited to again represent Wood-Mode, as we have for more than five decades, [but] it will take time to again earn our trust,” Spaulding said. “Our design team is committed to rebuilding and returning Wood-Mode to the gold standard of our industry. It will be a long road, but it will be earned, one project at a time.”
Spaulding offered her “heartfelt thanks” to Wood-Mode employees, sales reps and other dealers “for their support, grace and kindness” in the aftermath of the Wood-Mode closure.
“I’m unable to find the words to express my frustration and disappointment concerning the choices the previous owners made that put so many people in distress,” she said. “I wish the new owners the best of luck.
“I will cautiously proceed with selling Wood-Mode products, but will diversify my offerings to my clients in order to do my best to protect them and myself in the future.”
According to Jimmy Gavalas, of Atlantis Kitchens in Fresh Meadows, NY, his company “had 11 orders to save from the disaster” at the time of Wood-Mode’s closure.
“One order was in production at the factory and we had deposits on 10 other orders at various stages of the sales process, Gavalas said. “We ended up having to return only two deposits. The other nine orders were converted to different brands. We were able to salvage almost all the sales because our clients trust us.
“In my opinion, trust is the most important element in running a successful kitchen cabinet business,” Gavalas continued. “We all have nice products and we all claim to have strengths that are better than what our competitors can offer. In the end, clients fork over tens of thousands of dollars to dealers because they trust us.
“Trust is the bridge new ownership has to build as the Wood-Mode factory gets back to making cabinetry,” Gavalas said. “The new owner is obviously a very savvy businessperson, and I wish him much success. However, the brand must regain the trust of the cabinet shopper and that of the kitchen cabinet dealer.
“I’m very interested to see what avenues will be used by the new Wood-Mode to build that trust.”
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