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Showroom Showcase

Optimism Prevails at NorthCape International

Times are tough for retailers and manufacturers, but Tom Murray, president of Chicagobased NorthCape International, looks at today’s economy as an opportunity to grow his company to new levels. “There is no reason a business shouldn’t be able to make money in good times and bad times,” he says. “It all depends on how you look at your business and how willing you are to change.” NorthCape has enjoyed double-digit growth by listening to its customers, by looking at the needs of the industry and by being unafraid to take chances.

Murray remembers that his first foray into the outdoor-furniture business, in 2000, was nothing to brag about; he would buy containers of products from China and import them into the United States, hoping that dealers would like them. He quickly realized that it was not going to work.

“We needed to give dealers what their customers were asking for,” Murray says. After talking with his small contingency of dealers, Murray came to the conclusion that the company had to start designing its own furniture. That was the turning point for NorthCape. In 2002, it partnered with two factories in China to start producing custom designs, and now NorthCape sells to more than 600 loyal outdoor-furniture dealers nationwide.

The company manufactures everything from all-weather wicker to cast aluminum to its new outdoor upholstered line. Murray explains that the company’s furniture designs are driven almost entirely by customer suggestions and feedback, which is what sets NorthCape apart from other manufacturers. “That’s what has brought us to where we are today, and it’s the way we run our business,” he adds.

Murray says that NorthCape’s market niche has evolved into that of a contrarian. “We sometimes enter product categories that other manufacturers are getting out of, so we can fill a void for dealers.” For example, many manufacturers have gotten out of sling furniture at the opening price point, and this has created a void in that market.

NorthCape looks at this as an opportunity to pick up some volume. “It all ties back to making what customers need,” Murray says. “While others fear the worst, we are looking at acquisitions to increase our customer base and our product offerings.”

Vendor consolidation has been a huge driver for NorthCape over the past two years as dealers look for ways to cut costs by doing business with fewer manufacturers. “Many of our customers had to deal with four to five vendors to cover the price points and categories we cover,” Murray says.

NorthCape’s delivery system is attractive to dealers as well. With three warehouses in New Jersey, Florida and Chicago (and one more to open soon), the company is able to give dealers attractive pricing while allowing them to buy in small amounts, so they can get what they need in terms of style and quantity.

Many of NorthCape’s customers maximize value and lower product costs using its direct import program and then obtain the balance of their inventory from its domestic warehouses. “Dealers today can’t afford to buy product that will sit on their showroom floors,” Murray says.

To deliver the best value to customers, NorthCape has begun to manufacture many of its furniture cushions domestically at its new manufacturing facility. Not only is delivery time cut significantly, but the cushions’ quality and comfort are superior as well. “We’ve begun to realize that China is not the place to go for everything, and we’re becoming more of a hybrid,” Murray says.

“We manufacture as much as makes sense in China or Mexico and do everything else here in the United States.”

As NorthCape continues to grow, Murray says that his priority will always be to stay in tune with his dealer base. “We will continue to make money if we help our dealers make money,” he says. When the economy gets back on track (and he’s optimistic that it will), he knows that only the strongest dealers will have survived. “Those dealers are the ones we want to do business with, because we know we’ll be able to ride out the stormy times together for many years to come,” Murray says.

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