RONALD G. WANEK; ASHLEY FURNITURE INDUSTRIES, INC.
AMERICAN FURNITURE HALL OF FAME
ORAL HISTORY INTERVIEW
High Point Market
Tony Bengel, INTERVIEWER
INTERVIEWER: This was an interview, originally done by Tony Bengel in 2008, and was completed in December 2015 with updated information.
I am interviewing Ron Wanek, chairman of Ashley, in the company’s showroom during the High Point Market. So we’ll begin at the beginning, Mr. Wanek. When were you born, and where?
WANEK: I was born May 1941, in Winona, Minnesota.
INTERVIEWER: Did you have any family in furniture?
WANEK: No. No family in furniture.
INTERVIEWER: No in-laws in furniture?
WANEK: No, absolutely no family in furniture.
INTERVIEWER: Can you describe some of the key events in your youth that might have pointed you towards the furniture industry?
WANEK: My great uncle and grandfather made furniture as sort of a sideline hobby. I really enjoyed watching them work with their hands and make furniture. I always thought it would be rather neat to manufacture furniture. It just seemed like something that I’d sort of like to do. So that’s how I developed an interest in manufacturing furniture.
INTERVIEWER: What kind of operation did they have?
WANEK: They worked in their garage.
INTERVIEWER: Did you ever help them make furniture?
WANEK: No, I never did. Other than watch them. I didn’t live near them. I mean I would go there several times a year, and see them do this, manufacture, or not manufacture, I guess you would say, “make.” They certainly didn’t have any assembly line operation or whatever. It was kind of a bench-type, one-piece-at-a-time type of a thing. But you could tell how much they loved doing it.
INTERVIEWER: Were they making tables?
WANEK: No, it was a little bit of everything. Bookcases, it could be rocking chairs. It could be desks. It could be just a number of different items like that. My great uncle loved to manufacture rocking chairs, the old rocking chairs with the bowed rockers on them. He did that probably more than anything.
INTERVIEWER: Did he have a lathe?
WANEK: Oh, they both had a lot of equipment. As a matter of fact, my great-grandfather built boats, and my great-uncle also built boats, some rather large boats, in his spare time. My great-uncle lived next to my grandfather, his brother. And I loved to watch them make things. They worked a lot of hours, you know. My great-uncle worked at Watkins, a large employer in Winona at the time. He worked a full-time job at J.R. Watkins Company, then the largest employer in Winona making products for the home like hand creams, spices and organic medical remedies. They used their spare time to make furniture and boats. It was a sideline hobby/business for them. My grandfather worked at McConnon’s, another Winona based company. That’s one thing we did in our family, we worked hard, I don’t know, maybe 60 hours every week.
INTERVIEWER: Now, this was in Minnesota.
WANEK: Right, Minnesota. As a matter of fact, my great-great-grandfather was the first white settler in the county where I was located, Trempealeau Wisconsin. Arcadia, Wisconsin is located within Trempealeau County and out of my great-great-grandparents, which would be 16 of them, they all settled in the area. So I have a lot of family in the area, probably most of which I don’t even know. We haven’t really moved out of the area. That’s why I probably wasn’t as smart as the Southern boys, to know that you should manufacture furniture where the people lived. But it worked out pretty well in Wisconsin.
INTERVIEWER: Your father, what sort of business was he in?
WANEK: My father was a farmer, as were most of my family when they came over to the United States. Some of them cleared the land, and for the most part, our heritage was a farm heritage. My Dad was a tenant farmer. A tenant farmer essentially works another person’s land and they share in the proceeds of the harvest, it was a hard life. I didn’t have electricity growing up until I was 9 and indoor plumbing until I was 12 years old. My Dad also held other jobs to help make ends meet.
INTERVIEWER: Did you have a lot of siblings?
WANEK: I had three sisters, one older and two that were younger.
INTERVIEWER: Somewhere along the way you decided you didn’t want to be a farmer, I assume.
WANEK: Well, my wife decided I didn’t want to be a farmer. But I didn’t really object to that. The closest thing to a furniture factory that I knew about when I was growing up was a company named Winona Industries in Winona, Minnesota, a cabinet factory that manufactured cabinets. Stereo cabinets, maybe you remember what they were, TV cabinets. Back when we were still making all sorts of products in the United States. Now, of course, when it went over to Japan, they didn’t have wood, they didn’t have those resources, the product didn’t ship well. It was bulky, so they manufactured these types of cabinets in plastic.
So then, the first nine years of my career, I worked for Winona Industries in the cabinet business, and then in 1970 I along with other investors, started a small company called Arcadia Furniture, and began manufacturing furniture for Ashley Furniture, a sales and distribution company in the furniture industry. We did very well, but we wanted to grow and expand our business so in 1976, we purchased Ashley Furniture, a sales and distribution company located in Chicago who specialized in the furniture industry, and we merged the two companies into Ashley Furniture Industries shortly after that.
INTERVIEWER: And this was actually in Arcadia, Wisconsin.
WANEK: Yes, that is correct.
INTERVIEWER: And this is where Ashley was? No, Ashley was in Chicago, right?
WANEK: Ashley Furniture was in Chicago, correct.
INTERVIEWER: Let’s back up a bit. Where did you go to college?
WANEK: I didn’t go to college, other than taking some special college courses.
INTERVIEWER: So you graduated from a local high school in Lewiston, Minnesota?
WANEK: Yes that is correct. I graduated from Lewiston High School, in Lewiston, Minnesota.
INTERVIEWER: And what did you do immediately after that?
WANEK: I went to work for a company called Winona Industries, who manufactured the cabinets I was telling you about.
INTERVIEWER: Did you ever go into the military?
WANEK: No, I didn’t have to go in the military because John Kennedy was elected president, and instead of drafting 30-year-olds, they started drafting 18-year-olds. They totally skipped over me, so I was never really requested to be drafted. And when the Vietnam War was heating up, I had a family and we had three children. So that and the fact that I was a little older at that time and it made me a low draft status, which meant I probably wasn’t going to be called up. If times were different and I had been called for duty, I would have served.
INTERVIEWER: So your first job with the cabinet company would have been in what year?
INTERVIEWER: And how did you happen to get that job?
WANEK: It was the closest thing to a furniture company in Minnesota, so I applied for that job, and I started out as a laborer, and was later promoted to a supervisor.
Then in 1963, they started another plant in Red Wing, Minnesota. I wanted to be a part of that operation, and get new opportunities, so I moved to Red Wing, which is upriver from Winona about 65 miles up the Mississippi River. So then I was given new responsibilities with the opportunities there. I was promoted to a Junior Executive of that company. And these people were great people. In my first years, we were involved in everything in this small company, R&D projects to try and come up with new ideas, innovative ideas, building equipment and more. Having been involved in all these areas, I was able to learn virtually every job, everything about the manufacturing process.
They were on the frugal side, or they didn’t have the money, and you would, for the most part, not be able to buy anything. But you could create and make any machine that you wanted or needed to do the work you needed to do. So we did a lot of that, creating new and innovative ways to build or improve our equipment to perform more efficiently. It was very good experience. I also learned the administrative end of the business, purchasing, shipping, and more, a little bit of everything. So it was a good experience for me, it laid the foundation and grounded me for starting Arcadia Furniture. Over my nine years there, I had four amazing mentors that I credit still today for my success in manufacturing
INTERVIEWER: So this was a small, family-owned company, the cabinet company you went to work for, correct?
WANEK: Yes, it was owned by three partners. They weren’t related, but they were great people. One of them was a marketer and administrator, one of them was a good purchasing person, and the other one was a great engineer. They all expected you to be an expert in their field, so you were never segmented. You had a lot of opportunities to learn a lot of things. Everyone worked as a team to make the company better and more profitable. This experience, the training and the lessons I learned are pillars of what we are about today as a company.
INTERVIEWER: Did you do any sales and marketing at that point?
WANEK: Not directly, no. I really didn’t get involved in that until later. We did do some. You would have to work to get the big contracts with the large electronic companies like General Electric, Admiral, Zenith, Motorola and Magnavox. Then, you would get the big cabinet contracts, that would be the extent of your sales work, and obviously that was based on design and price. So it was a matter of coming up with a good design that they liked, or you would work together with them, and then you would have to be competitive on price.
INTERVIEWER: You would sell to electronics manufacturers.
WANEK: Yes, they would take the cabinets and put their electronics, their electronic guts, into the cabinets.
INTERVIEWER: So you learned a lot about woodworking.
WANEK: Yes, exactly. And it was very good experience because I really learned a lot about mass production. You know, we would run thousands and thousands of cabinets. The techniques that they used in the furniture industry were totally different from electronics-type cabinets. So later on, we applied those manufacturing techniques to furniture, the simple furniture that we manufactured starting in 1970, and we were quite successful with that. Very different than what they did in the traditional furniture industry. Back then companies had several plants making various different types of furniture. They would do large “cuttings” of product and ship them to retailers who would then have to inventory the product until it sold. I learned quickly that you manufacture for what you know will sell, not what you hope will sell.
INTERVIEWER: So, your first company was kind of a flat-line, ready-to-assemble kind of production system?
WANEK: No, I wouldn’t say that. They were smaller cabinets that were set up, not ready-to-assemble. They certainly were not like the RTA furniture that companies like O’Sullivan and Bush sold at the time.
INTERVIEWER: You didn’t have any of the computer-controlled routers or anything like that.
WANEK: No, we didn’t have any like that. You know, we were manufacturing in the early 1960s and we didn’t have CNC (Computer Numerically Controlled) equipment back then. It wasn’t available until the ’80s.
INTERVIEWER: But you were running a fairly big volume, it sounds like. Your plants must have been pretty good-sized.
WANEK: They weren’t that big, but you ran a lot of throughput. Throughput was the name of the game, which we’ve always practiced. You would constantly turn your inventory.
INTERVIEWER: And it sounds like you had three bosses, in effect.
WANEK: I had three bosses. And that was in the ’60s, when it was supposed to be all straight-line management. You were supposed to have one boss. Well, originally I had three bosses, and you had to satisfy all three of them. This experience helped me immensely, because I had to know what they wanted to know about the different parts of the business. I was trained well and I knew that if I ever started a business, I would use what I learned there from my mentors in that business and I still use that knowledge and experience with my employees today.
INTERVIEWER: And they were there in the plant every day?
WANEK: Every day.
INTERVIEWER: It was all hands-on.
WANEK: Very hands-on. They knew what was happening in every part of the business.
INTERVIEWER: So how many years were you with the cabinet-making company?
WANEK: From 1961 to 1970. In July of 1970, I started Arcadia Furniture. Nine years after getting my first job making furniture and cabinets
INTERVIEWER: Tell us about the founding of Arcadia. How did that come about? What made you decide to do that?
WANEK: First of all, the cabinet business was really an up-and-down business, and if you weren’t in good with a customer when they changed purchasing agents, or whatever, you may be out. Also, the business was very cyclical, or seasonal, back then. And at that time you didn’t have a brand name as a manufacturer. I realized very quickly I wanted to have a business that had a brand name, so I would have more control of my company’s destiny.
With the cabinet business, you were subcontracting to a large company. Depending upon whether you were hot and competitive, you had business or you didn’t. The companies we sold our cabinets to had the brand name, so they would use any supplier and the end product would carry their brand name, not the cabinet supplier’s name. If your designs or prices were not what they wanted, you would have to lay your people off every year and start out from scratch every year. I wanted to get into a business where you would be able to develop a brand and have stability pretty much year-round, a business that wouldn’t be cyclical.
INTERVIEWER: How did you go about founding Arcadia Furniture?
WANEK: Arcadia Furniture started out manufacturing furniture for Ashley Furniture, a sales and distribution company in the furniture industry, which was a separate company. They did have interest in factories at one time, in Indiana and Chicago. They were, in 1970, only doing a million and a half dollars annually at wholesale, and we were looking for a company that we could manufacture our products for. Because that’s what we did with our contract work at the cabinet company.
So we started this small plant in Arcadia, Wisconsin. And again, back then I didn’t know anything about logistics. It seemed like since my family was there, and since we thought that everybody in Wisconsin and Minnesota worked harder and were smarter than anyplace else in the United States, we decided that that would be a good place to manufacture our products. Getting your product to market was a challenge from that location. But in addition to that, it was soon evident that Ashley wasn’t going to take care of our growth ambitions.
So, what we did was purchase Ashley Furniture – I’m talking about Arcadia Furniture’s group – we purchased the Ashley Group and merged it together shortly after in 1976, into Ashley Furniture Industries. Later on, we moved the headquarters from Chicago to Arcadia, Wisconsin and renamed the company Ashley Furniture Industries, Inc.
INTERVIEWER: Did you say you had several other partners in Arcadia when you started that plant?
WANEK: Yes I did in Arcadia originally, because I didn’t have the kind of money that I needed to start this operation up. Then after the merger, Bob George, John Sobotta and Chuck Vogel, became involved and ran the business with me. I needed talent, along with capital to ensure we’d have a viable ongoing operation.
The whole thing about capital is that you need less of it if you can really turn your inventory. Remember when I mentioned furniture would be done in cutting cycles and then warehoused by the dealer/retailer to “hopefully sell”, that whole process took a ton of capital to finance that type of operation. Our idea was to get the materials in, manufacture your product and get paid before you had to pay your suppliers. And that was a discipline that we learned very quickly. It’s called GMROI, Gross Margin Return on Investment, and we still practice it today religiously as a manufacturer and we promote it to our retailers so they will embrace it too. My then-partner, Bob George, was a master at practicing this.
So that was the founding of our company, the philosophy of the founding of our company, and that’s how we financed it. It was a discipline that we put into the company early, and we’ve maintained this philosophy up to this day. And don’t forget, we all took risks investing in this company, and many people got rich off taking this risk. That’s why capitalism works: risk can equate to rewards or failures; in our case, big rewards for those who embraced and invested in our vision and mission.
INTERVIEWER: So you didn’t have to go to the banks to borrow money.
WANEK: Oh, sure. Sure, I had to, but not to the degree that you would think you would have to in order to grow. We had to borrow to get the money we needed to grow the business, and we were able to remain private. But yes, we borrowed a lot of money over the years, but not to the point that we couldn’t cover the payments with your cash flow, and grow the business. Because we weren’t just running a business, we were also very focused on growing the business. We embraced the whole concept of “forecasting” very early in the business, and that coupled with the magic of GMROI, allowed us to grow very efficiently without amassing too much debt.
INTERVIEWER: So that was your objective from the very beginning, to create a brand that you could grow, and you started out making occasional tables for Ashley.
WANEK: The company name was Ashley Furniture Corporation at that time.
INTERVIEWER: Who did you work with at Ashley in those first years?
WANEK: Ashley was owned primarily by a gentleman by the name of Carl Weinberger out of Chicago. Carl was one of the smartest men I knew. He really taught me the furniture business, how to design, manufacture, sales, marketing and distribution to this market. His son, Ken, was also an integral part of the company’s foundation, and of who we are today, along with Carl’s son-in-law Richard Rovnick. We made a great team; we were all very passionate about our respective knowledge and responsibilities.
I worked with Carl and his son, and his son-in-law, in developing product and business. Then, in 1976, we purchased Ashley from Carl.
INTERVIEWER: With Arcadia, were you essentially a captive supplier to Ashley, or did you have other customers?
WANEK: We still manufactured some electronics cabinets, which was our heritage prior to 1970.
INTERVIEWER: But most of your product was occasional tables.
WANEK: Yes, but we didn’t have enough table business to take up 100 percent of our manufacturing capacity. To fill all our manufacturing appetite, I would go out and solicit this cabinet business, which was still somewhat there in the early ’70s.
INTERVIEWER: So you were, in addition to running the company, also selling to some extent.
WANEK: My job function was more operational. And later it became more sales. Yes, it was both. It involved everything and we still do everything today.
And we have an advantage because my son and I totally understand everything from the design, the manufacturing and the sales and marketing process, no matter where it’s done in the world. I don’t believe that there’s anybody today that has the broad knowledge that we do about all aspects of the business.
INTERVIEWER: With Arcadia, did you just move equipment into an existing plant?
WANEK: We had a very small plant. It was only 35,000 square feet.
INTERVIEWER: So you moved in some equipment and started making mostly occasional tables, but also some electronics cabinetry.
WANEK: Yes, exactly.
INTERVIEWER: When you acquired Ashley Furniture Corporation, you said you had three other partners that were in with you on that?
WANEK: Actually, when we merged the companies into Ashley Furniture Industries, it started out with four, including me. One of them left the business right away, and the other two were Bob George, who left the business in 1997, and Chuck Vogel. Then eventually it came down primarily to my son and me, with Chuck Vogel and his son Ben Vogel retaining some ownership of the company today.
INTERVIEWER: What sort of growth did Arcadia and Ashley have early on?
WANEK: We wanted to grow at 22 percent compounded every year. And we’ve done that every year since basically the beginning, except in 2008 during the recession. But other than that, we were growing at 22 percent compounded up to 2008. Because of our size today, the investments in infrastructure, people and processes to achieve that type of growth today would be massive. However, we are still growing double digits nearly every year.
And the way that started was, I wanted to be a billion-dollar company by the turn of the millennium, by the end of 2000.
In 1987 we invited a speaker to come in that would speak about family companies. The company he was with was doing in excess of a billion dollars in 1987. I asked our CFO what increase in business yearly we would have to do to reach a billion dollars by the next millennium, 2001.
He did the calculation and it came to 22 percent compounded growth. I said, “that’s it, we will do it.” When I gave the goal to the organization, they about died. I said, “don’t worry, we will take it year by year and put the assets and products in place to accomplish this goal. Do your best, and if we hit a bump in the road we will adjust.”
That meant a lot of product innovation, plants, equipment, training of employees, developing talent, sales force, etc. We worked two years ahead, putting resources in place for the coming year. We were always careful not to over expand, so if we hit hard times we had the finances to withstand a downturn — which we did face.
We calculated out what we needed to do, and we needed a 22 percent compounded growth a year. And believe it or not, we met or exceeded our goal almost every year.
INTERVIEWER: So growth was one of your major objectives from the very beginning.
WANEK: Growth and profitability. Growth comes with costs, but Ashley has never had an unprofitable year. There were a couple of tough years along the way that could have gone either way, but they didn’t.
All of Ashley’s growth has been organic with two exceptions:
One was in Ecru, Mississippi; we purchased that facility in 1994. It was a 135,000-square-foot facility with 125 employees and it was doing about $8 million. Since that time this facility has been expanded 13 times, and is now nearly 2 million square feet, with approximately 3,000 employees, and it’s currently the largest upholstery production facility in the world.
The other, in Ripley, Mississippi, was purchased in 1999. The Ripley facilities were approximately 500,000 square feet, with 300 employees doing about $10 million. Today, the Ripley facilities are approximately 900,000 square feet, with 1,500 employees.
INTERVIEWER: You said Ashley was doing a million and a half when you started selling to Ashley?
WANEK: Ashley Furniture Corporation was a doing a million and a half when I started selling to them in 1970. That was their volume. And when they sold Ashley Furniture Corporation to us in 1976, they were doing about $6 million. So then we merged the two companies together into Ashley Furniture Industries, and shortly after that we closed the sales office in Chicago, moved them all to Arcadia, Wisconsin. The building in Arcadia, Wisconsin was 35,000 square feet in 1970. Today it’s a little over 2.3 million square feet with our newest addition. And then there are the other facilities and offices that we have in Ecru, Mississippi, Ripley, Mississippi, Colton, California, Leesport, Pennsylvania, Tampa, Florida, Texas, and Advance, North Carolina.
INTERVIEWER: When you were growing, what were some of your major challenges? For one thing, you had to keep getting more and more people to work for you.
WANEK: Our people are all basically home-grown. We never really hired anybody outside of the industry. Everybody at Ashley is home-grown, promoted from within, with a few exceptions.
But one of the biggest challenges, of course, was product lines. How do you innovate and come up with new products? How do you keep getting business when you’re trying to break into an already well-established business? How do you get your share of the pie?
In product, continually coming up with new ideas, new product lines, was what Ashley had to do. Remember, I learned that from the cabinet company, and how quickly bad designs, or too high a price could put the company and its employees in jeopardy. Ashley’s probably been more innovative in that regard, obviously, than almost any other furniture company. That’s what fueled our growth: having the best designs, the best service, and the best price. “To Be The Best Furniture Company”. Otherwise, we certainly wouldn’t have gotten the business if we hadn’t offered those things.
Bob George, one of the original partners, was a logistical genius and I learned very quickly that logistics could and would be a game changer for us and the industry. Bob eventually sold his partnership shares in 1997.
In 1982, another partner, Chuck Vogel, took over the sales responsibilities which helped us grow very quickly. Today, Chuck isn’t involved in the day-to-day business, but he still retains some ownership of the company and is a member of our Board of Directors.
Along with that, we have developed a large distribution network. We have 800 tractors, and 2,000 trailers. We have regional distribution centers in California and Mississippi and Pennsylvania and Florida, North Carolina and Texas, and we developed a regional distribution network because we had to deliver smaller orders to give our dealers a better GMROI – Gross Margin Return on Investment, or Inventory, however you want to call it.
GMROI is the cornerstone of our business and in today’s economy it has become even more relevant than it was when we started to teach and preach about it. Product innovation, service, GMROI, they’ve always been what the company’s been all about.
INTERVIEWER: Who did you go to for product design?
WANEK: We created our designs internally except in the early years. All of our designs always have been internal. And we’ve done that by doing a lot of the market research ourselves. Talking to people that know what’s going on in the industry, and then adapting. Our design team has worked for Ashley for decades. They are a great team that constantly amazes me with their new product designs.
INTERVIEWER: But you were essentially an operations person, right?
WANEK: I was everything. We do everything. That’s what I learned when I worked for those first entrepreneurs that I worked for. You do everything. We expect our people to work as teams. No solos, everybody must be on the same page, a well-oiled machine.
INTERVIEWER: Right, but did you hook up with some particular designers, or product development people?
WANEK: It was essentially us, a close-knit group of our own people, our own internal designers. We traveled, listened to what styles/looks were selling, and shared them amongst ourselves and then challenging our teams to come up with stylish designs and to be more innovative as to how we could make the products more efficiently than anyone else.
INTERVIEWER: Was that any different back in the early days, when you were just beginning to grow?
WANEK: Nope. We’ve always done it through doing our own market research, traveling the world, seeing what was going on, trying to adapt what we felt would be right for the market, and then manufacturing it efficiently so the masses could afford to purchase a well-made stylish piece of furniture for their home. We are what my son Todd calls a “dirty fingernail company”. We love details, and no one is afraid of getting their hands dirty
INTERVIEWER: What’s the first market research you remember doing at Ashley?
WANEK: The first market research I did was talk to people that knew what was going on in the business. People like Nebraska Furniture Mart’s Louis Blumkin, and maybe a dozen other retailers like that who knew what was going on in their stores, and knew what the consumers wanted. And then figuring out from there what would fit our operations.
INTERVIEWER: Do you consider Louis Blumkin one of your early mentors in the business?
WANEK: No question, absolutely.
INTERVIEWER: Were there other key people like that who pointed you in the right direction?
WANEK: Let’s put it this way: Louis, early on, when I tried to get business from him with Nebraska Furniture Mart, would always say, “Ron, I don’t need to buy anything from you that’s already out there in the industry. You need to come up with innovative designs, something new. Why would I buy from you if I already have something that’s like what you want to sell me for five percent less? You’ve got to come up with a new idea, a new product. And don’t forget the promotional goods. That’s a huge market that is underserved and they all want and need furniture”. He kept telling me this over and over every time we met and I met with him seven times a year…and again every furniture market!
He was one of the inspirational people for me, who inspired me to constantly innovate and come up with new designs, probably more than anybody. A great man! There were others too, but he obviously made the greatest impression on me, and would spend time with me, and give me advice, which I needed back then.
INTERVIEWER: Are there other major retailers today that give you key insights and inspiration?
WANEK: Sure, there were a lot of retailers. There are a lot of people who know what’s going on. People like Jake Jabs from American Furniture Warehouse, Bill Hinks at Furniture Outlets U.S.A., Keith Koenig from City Furniture, Irv Blumkin from Nebraska Furniture Mart, Jim Spencer from the Spencer Group, Lou Ripper from Compass Furniture and Curtis Ferguson who operates an Ashley Furniture HomeStore in Bryant, Arkansas.
Of course there are many others I could list, these were just a few that came to mind. I also have to give credit to Kerry Lebensburger, our President of Sales, the smartest person I’ve ever known in Sales Management, whose brilliance and vision always challenged us to innovate in all areas of design and market strategy, our Sales VPs, and our division Presidents and division VPs. These guys keep their ears to the ground and give us real time intelligence as to what’s happening in the field everyday.
INTERVIEWER: Do you remember the first furniture market you attended?
WANEK: It would have been in Chicago, maybe in 1971. It would have been at the Merchandise Mart. It was at 666 Lakeshore Drive. It was called the American Furniture Market.
INTERVIEWER: They already had pretty much taken the market away from Grand Rapids, I think, at that point.
WANEK: Oh, no question, they had done that some time ago. And then, of course, High Point was emerging, and Dallas was emerging, and they eventually took the market from Chicago. High Point took it from Chicago, and then Dallas almost took it from High Point. Not quite, but almost. They probably deserved to have it taken away. But we went through a severe recession back then, and High Point ultimately ended up being the major market. It was really challenging for us at that time, but those are the first major markets I was involved in.
Then Las Vegas Market happened and they challenged High Point. The end result of that challenge is it made High Point improve their markets and today, both of them have improved immensely.
INTERVIEWER: What do you remember about that first market in Chicago? How big a showroom, what did you show, what did you sell?
WANEK: It was occasional tables, almost 100 percent occasional tables. We were on the 17th floor of the American Furniture Market. Of course, the Merchandise Mart in Chicago was a much larger facility. But we showed at the American Furniture Market, and I’m not sure how big that building was. It certainly wasn’t a High Point then, where you had a building that was a couple million square feet, or like the 12 million square feet with 180 buildings like it is today.
INTERVIEWER: And you would have had, what, a few thousand square feet, maybe, at your first markets in Chicago?
WANEK: Probably 2,000 square feet. Today, we’ve got 138,000 at the High Point Market and 165,000 in Las Vegas.
INTERVIEWER: So were you selling a huge variety of occasional tables at those first markets?
WANEK: It wasn’t that huge, because there wasn’t that much space, compared to this space we have now in High Point.
INTERVIEWER: So you could fill 2,000 square feet with just tables?
WANEK: Oh, you had no problem. Two thousand square feet isn’t very much; some houses are much larger than that today.
INTERVIEWER: Did you start out with a lot of buyers committing to your line?
WANEK: Back then you would mainly try and get the big accounts. Montgomery Ward was a big account of ours. We did some business with Sears. Levitz was huge. Between Montgomery Ward and Levitz, they were probably over half of our business.
INTERVIEWER: From the very beginning?
INTERVIEWER: And you continued to show at the American Furniture Market for some years, I guess.
WANEK: Not too many years. I think we got out of there in about 1975.
INTERVIEWER: And then you came to High Point?
WANEK: We came to High Point in, I’m going to say, 1973. And we went to Dallas maybe in 1975.
INTERVIEWER: And by that time, you were rolling out new product lines.
WANEK: Always. From the very beginning, always. On a much smaller scale, but four times a year back then – two for Dallas, two for High Point. You had to come up with new product. You had to come up with new designs, innovations, redefine your price points. That’s what kept our customers coming back and it brought new customers to our space.
INTERVIEWER: What products did you get into earliest, after occasional tables?
WANEK: We did wall systems, étagères and entertainment centers. Then, in 1982, it was obvious that the occasional business – obvious to me at least, but not to the industry – that the occasional business was over in the United States because it was so price-sensitive, and tables had started coming in from Korea and Taiwan. These imports were exceptional values, better values than we could manufacture in the United States.
So I went over to Taiwan, and I started buying product in Taiwan. With that change we switched our U.S. facilities from making occasional furniture to case goods, bedroom furniture, and phasing out the occasional tables in the United States, buying them from, primarily Taiwan. Some product was from Thailand, but primarily from Taiwan, and converting our U.S. operations to case goods. That was one of the most challenging things I’ve ever done. Because our people didn’t want to make case goods, they were comfortable making tables but I knew we had to change.
It was a totally different discipline, and they fought it, they didn’t want to do it. The disciplines were different, and the larger dimensions of the case goods product, and the greater complexity of the new product… They wanted to go back to manufacturing occasional tables. But that couldn’t be, and we struggled with that for several years, and then became very successful in manufacturing case goods, bedroom furniture.
INTERVIEWER: So you started out in bedroom. And you were making most of the bedroom furniture, back in the early ’80s, in Arcadia.
WANEK: Yes, that is correct.
INTERVIEWER: But you were already shifting occasional tables offshore?
WANEK: Yes, we totally shifted our production of occasional tables out of the United States; I’m going to say, by 1986 or ’87 and we began to manufacture our occasional tables at Ashley Taiwan. Then we went into what was called our Millennium line. Which was the biggest investment that’s ever been made for a product line, I believe, in the history of furniture.
A huge, huge investment for what was polyester, high contemporary, high-sheen product. And it proved to be a great, great product line for us. It was very, very painful to get into. And a huge change for us; we went into debt, heavily into debt, to manufacture that product line. It was very difficult because the technology was kind of temperamental. Difficult to control and use, and also you didn’t have U.S. suppliers that knew what they were doing. Most of that technology was from Italy. And it was difficult working out the logistics on getting the products we needed with our suppliers.
We introduced that product line in both bedroom and dining room furniture. It was very, very successful, and it had about a 10-year run. It ran about 10 years, peaking out at about 1991, when the lira was devalued significantly, and the Italians came in and pretty much took that business away from us, because the exchange rate made our product less competitive. But it still lasted for 10 years; it was a good run. And that, I would say, more than anything, established us as a major player in the furniture industry.
Because again, nobody else wanted to do it, or could do it, and the investment that it took, and the commitment that it took, nobody else was willing to do that. So that pretty much established us in the furniture industry. And then, in the early ’90s, we started to bring in bedroom furniture from overseas, for the same reasons we shifted our occasional table business overseas.
And we did that very well, and we did a lot of innovation there, again, with what we called mixed media, where you would mix steel and wood and glass and marble and stone into products, and we had a good run on that too.
So we constantly innovated with new product designs and manufacturing processes and took market share by doing that, because obviously the volume numbers were starting to get pretty big. Compounding 22 percent growth on four billion dollars – that’s a lot of business that you’ve got to create, and create a demand for it.
And when you grow like this, organically, you must also grow your infrastructure; add buildings, employees, warehouses, equipment, transportation and more. All of this preparation for continued growth had to be planned out and implemented with very little, if any, variances to be profitable. So that’s a just little bit about the innovation that we’ve done over the years.
INTERVIEWER: What drove your decision, in the face of internal opposition, to get into polyester?
WANEK: Survival. Again, it was a wide-open opportunity.
INTERVIEWER: How did you see that opportunity?
WANEK: I just saw it.
INTERVIEWER: Were your retailers asking for some value-priced, high-sheen furniture?
WANEK: This wasn’t necessarily value-priced. You know, the most expensive bedroom set was four thousand bucks at retail. So this was not inexpensive goods. This was high quality; nobody else ever matched it from anywhere in the world. I mean, it was great product. It was a very difficult product, because obviously with this high sheen, you get one little speck of dust and then it’s a reject. With traditional brown furniture, you don’t see the imperfections like you would with this product.
The manufacturing of this product was very temperamental, very high-maintenance. Variables like the humidity, temperature and more had to be formulated and adjusted daily. But again, if you wanted to make your mark in the industry, you had to do something that nobody else wanted to do. So, we just stuck with it.
INTERVIEWER: Weren’t retailers able to get this high-sheen look with layers and layers of lacquer from Italian companies?
WANEK: Not lacquer, this was polyester, a very different process and a much higher and expensive quality finish.
INTERVIEWER: Right, but weren’t you duplicating a kind of high-end lacquer look at lower price points?
WANEK: Originally, retailers couldn’t buy the high-sheen look from anywhere else. Again, when the lira was devalued, then they could, but it wasn’t a comparable product. But it was a look-alike product that looked the same in an ad, and we became less competitive and eventually moved away from that. It would have been probably in the late ’90s that we moved almost totally out of that polyester product line. We manufacture none of it today. But it was a good 10-year run, from 1988-1998, after which we started phasing that product out.
INTERVIEWER: You said it peaked in 1991?
WANEK: Yes, about 1991, but it ran strong until 1998. The reason that it started declining in 1991 was primarily because of the devaluation of the lira, and the Italians were then able to take and knock off a lot of our looks, which were all original designs, at good prices in the United States because of the devalued lira.
And back then, the law made it more difficult than it is today to get product patented, and to enforce that patent. So, you know, they knocked off a lot of our looks and took a lot of our business away.
INTERVIEWER: And you were making this entire polyester product in Arcadia?
WANEK: Yes, we made all of the polyester products in Arcadia, and in our Whitehall, Wisconsin manufacturing plants, but we also had other high-sheen products we made there too.
INTERVIEWER: But when you saw that product wasn’t going to be profitable for very much longer, then you started looking offshore for mixed-media bedroom furniture.
WANEK: That was our next move, and obviously a lot of the U.S. people didn’t recognize that you could no longer manufacture bedroom product profitably here in the United States, but we recognized it early, and began moving some of our products offshore.
INTERVIEWER: So you were going overseas to Taiwan and Southeast Asia very early on. What were you seeing? What were you looking for over there?
WANEK: You’ve got to understand that we understand technology in manufacturing. So we knew who had the ability to manufacture certain products at a cost and survive, and who could give us a good-quality product. We had that ability, and we were going over and buying product based off that knowledge. We also knew what the costs were. Hence, we started a factory in Taiwan called Ashley Taiwan in 1984, and ran that successfully for a number of years until 1990.
This experience gave us a lot of insight into Asian manufacturing and costs, and just the whole process, understanding all of it. So that was very successful for us too. We sold Ashley Taiwan in 1990 and began moving our manufacturing to China because things were changing in Taiwan. But we had a good run in Taiwan and enjoyed Taiwan and the Taiwanese people very much from 1984 to 1990, and even today we do a lot of business in Taiwan.
INTERVIEWER: And you didn’t partner with anybody in Taiwan?
WANEK: Yes, we had a joint venture with Daniel Su and his brothers.
INTERVIEWER: So you didn’t own the factory completely yourselves?
WANEK: No, we didn’t own it completely, but it was Ashley Taiwan, a joint venture. The entire product manufactured and sold was Ashley-branded product.
INTERVIEWER: How did you establish those relationships and set up those kinds of operations?
WANEK: Like doing business anywhere, you have to pick who you want to do business with. You have to get to know people, and trust in those relationships with Ashley is extremely important. And I have to say that, in doing business abroad, I think I only got burned once. I think that’s a pretty good track record. But you know, we’ve dealt with a lot of very credible people, had good partnerships with a lot of people. And because of those partnerships, a lot of good things have happened. We have large facilities in China and Vietnam right now. Both of these factories are 100 percent owned by Ashley. Our Chinese factory is outside of Shanghai, and the Vietnam factory is outside Ho Chi Minh City. These investments have continued to be very successful for us.
INTERVIEWER: When did you establish that China facility?
WANEK: The China facility was founded in 1999.
INTERVIEWER: But you were still getting product from other factories over there.
WANEK: Yes we are, we produce over 60 percent of what we do in the United States today. We are, by far, the world’s largest furniture manufacturer. There isn’t anybody close to what we’ve manufactured anywhere in the world. And we’re the largest furniture retailer in North America, too.
INTERVIEWER: At what point did you decide that you needed to get into dedicated stores? You’d been distributing to various and sundry independents, department stores, chains like you started out with, Sears, Montgomery Ward…
WANEK: Yes, but back then we didn’t really sell that kind of big general merchandise chain account. But early on, from the early ’70s and on into the ’90s, we sold big furniture chains like Levitz, up until the time they ceased to do business. They were a very good account of ours, a good percentage of our business. After Levitz ceased their operations, we still grew our business, but they were a very important large account for us for a lot of years. Great people; we really liked them a lot.
The Ashley stores have been good for Ashley because we were able to really understand the retail business. And obviously, as more and more retailers have gone to Asia to buy container direct, and are not buying from as many U.S. manufacturer brands, etc., we knew instinctively that we needed to go directly to the consumer market if we wanted to continue to grow and continue to be successful. We knew that we could do a good job at retail, integrating our belief in GMROI, our logistics along with our strengths with design and manufacturing. So that’s why we went into our branded stores.
However, we pursued this strategy skillfully to ensure we didn’t offend all of the great retailers that made us what we are today.
We added new brands under the Ashley Brand umbrella, such as Signature Design by Ashley, BenchCraft and Berkline products so independents could still have access to our great designs, manufacturing, logistics and prices. In the long run, it has produced a win-win for all of our customers. It’s always been about design, quality, price and delivery and it’s been that way since 1970.
INTERVIEWER: When you say you knew retail, how did you develop that knowledge?
WANEK: When I opened the first store in about 1974. It was a small store.
INTERVIEWER: Where was this?
WANEK: It was in Arcadia, Wisconsin. I thought it was a small store, but it did more volume back then, than some retail stores in most big cities even today.
INTERVIEWER: So it wasn’t a factory outlet or anything like that?
WANEK: No, it was an Ashley store. Although some people might call it an outlet store even today, but we never really used that word, even though it was owned by Ashley.
INTERVIEWER: What drove you to do that?
WANEK: First of all, I wanted to understand the retail business. I think that we understood the retail business pretty good, but I really didn’t have the credibility then. I really wouldn’t have had credibility unless I’d done that, because somebody’s always going to say “how do you really know retail if you haven’t run a store?” And I didn’t like hearing that. I wanted credibility, so that was one of the reasons why we opened the store. I wanted to prove that we could successfully do a certain kind of a model. And that was probably the prime motivation to do it.
Remember, we worked with many large and once-successful retailers and we learned from them a great deal. We learned why they were successful and more importantly, why they were or eventually, became not successful and used that knowledge to plan for this store
I got tired of hearing that I didn’t know about retail. We’ve since been more successful in retail than almost anybody. I’m not saying we’re perfect, but we’ve done it pretty well. And again, that makes you stronger in the sense of what you offer in the product line, how you merchandise, how you market. It’s been very good for us.
INTERVIEWER: What sort of business model did you have in mind at retail when you opened that first Ashley store – price points, selection…?
WANEK: It was designed to be a promotional to a medium-priced store. To this day, they’re probably mid-medium to promotional stores. That’s the price point that we wanted, where the sweet spot is in terms of what people buy.
INTERVIEWER: So you were aiming at the mass market.
WANEK: Yes, we knew that was where the growth was. Think about how often people go to an expensive restaurant versus a fast food establishment: the expensive one maybe once or twice a year, versus those who go to the fast food establishment maybe multiple times a week? We wanted that customer.
INTERVIEWER: And did you have upholstery at all at that point?
WANEK: We went into upholstery in 1994.
INTERVIEWER: So you did not have upholstery in that first store.
INTERVIEWER: So how did you merchandise those first stores?
WANEK: We bought from a variety of upholstery manufacturers. Many of those sources whose names I can’t remember at this time.
INTERVIEWER: So you did have a broad, whole-home merchandising approach in mind from the very beginning of the Ashley HomeStores, and you bought some product from other manufacturers.
WANEK: Right, but understand that’s initially for one store.
INTERVIEWER: But it didn’t stay one store for long.
WANEK: No, it didn’t. In 1996, we opened our first store outside Arcadia, Wisconsin. That store was in Anchorage, Alaska. And this was the idea of these HomeStores to begin with. This is where they would be located: in remote areas like Alaska, like Canada, like the western United States, mainly in smaller towns where furniture dealers could not get service.
In other words, retailers in those areas, in small towns, would have to buy minimum orders from manufacturers back then. You would constantly hear from these dealers that they didn’t like minimum orders, since their volume was pretty small. But they’d have to buy from somebody, buy upholstery from one guy and case goods from another guy, and they’d have to buy a minimum order, and it’d take so long to get the furniture if the store was, say, in the middle of Montana. It was difficult for the dealers because they had to have big warehouses to house those minimum orders, which resulted in low GMROI.
If they had a totally dedicated Ashley store, where they could buy all the products, everything for their home and get them all on one truck with one minimum order, it made sense to me. That’s how we started, and that’s how it evolved to this day.
INTERVIEWER: So the store in Anchorage, was that company-owned, or…
INTERVIEWER: So you decided to go the licensee route?
INTERVIEWER: That requires a certain level of investment on the part of the licensee.
WANEK: Yes, it does.
INTERVIEWER: What sort of characteristics did you look for in a licensee?
WANEK: It would have to be somebody financially sound. And you obviously want somebody that you feel understands the furniture business, and has a passion for the furniture business.
INTERVIEWER: How did you get these dealers? Did you recruit them at markets, or try to get…
WANEK: Everywhere. Some of them we recruited, and many came to us. We also have a sales force of marketing specialists, and they’ve brought many of them to us. So it was a variety of ways that we got licensees.
INTERVIEWER: Was part of your motivation for going into stores to build, or continue to build, the Ashley brand?
WANEK: Yes, of course.
INTERVIEWER: It’s very hard to establish a brand in furniture, as you well know.
WANEK: Yes it is. If you’ve ever read the book “The Furniture Wars”, by Michael Dugan, he outlines very well how many companies have tried and failed miserably trying to establish and maintain a brand in this industry. It’s just like General Motors having Oldsmobile and Pontiac, Ford having Mercury and Chrysler having Plymouth. You know, you have to ask yourself, what are iconic brands really worth? In the ’80s, the Oldsmobile Cutlass was the number one selling car; today it’s gone. So obviously, getting a good brand and holding a good brand is challenging. Brands that don’t change with the times – different styles, innovations, technology, logistics and demographics, etc. – eventually die. Many of the iconic brands I grew up with are gone because they didn’t change or adapt.
INTERVIEWER: Tell us about developing your management team, and your sales force. Give us some of the highlights of what you did, and why.
WANEK: It’s a very close organization. And you’ve got to understand that as of this writing this is my 56th year in the manufacturing business, which began in 1961. And you start out, and you get a good core of people that have the Ashley philosophy, the passion for the vision and the commitment to the company mission, and then you develop from there. We’re mostly home-grown.
We try very hard to focus on growing from within, but as rapidly as times are changing, like everything else in our company history, we know we have to adapt quickly, especially with technology.
That means we focus internally first, the industry second, but skills and talents required to run a business today, require us to sometimes hire outside the industry to fulfill jobs whose skill-sets we need. Overall, however, we rarely go outside of the industry to achieve the growth we’ve experienced, and we rarely had gone within the industry to solicit people. Almost all of them were home grown and promoted from within. And they naturally do things the Ashley way.
INTERVIEWER: When you say “the Ashley way,” how would you describe that in terms of the business culture?
WANEK: The business culture is taking care of the customer, giving the customer what they want. Innovative product, the best service, competitive pricing, the use of advanced technologies and constant training in all departments to insure we are the best at what we do. And, you know, you don’t necessarily look at how it’s been done in the past. You look at how it’s going to be done in the future, how you’re going to constantly improve, continuous improvement and the flexibility to be able to change quickly. Understanding you’ve got to earn it every day. There’s never a time when you get to a point where you can get comfortable. When you get comfortable, you will get ambushed…it’s not a question of how, it’s a question of when. So it’s constantly reinventing the company, constantly improving, never getting comfortable.
INTERVIEWER: Have you looked to other industries for ways to come up with new product, to manufacture and distribute efficiently? Did you look to the auto industry? Did you look to Europe or other countries?
WANEK: Yes, in Europe and Asia. We’ve spent a lot of time in both Asia and Europe and much of our time spent over there, was looking at manufacturing technology in the automobile industry in Japan, and in the furniture industry overall. The best equipment for years has come from Germany, Japan or, in some cases, Italy. But our people have traveled extensively to expose themselves to lots of things in the world of manufacturing technologies. You know, we’ve looked at the European markets in terms of product for years.
INTERVIEWER: What did you mean when you said you thought the industries here were old-fashioned?
WANEK: I thought various industries, like the automobile industry and other manufacturing industries, along with furniture manufacturing were becoming old-fashioned in how they designed, manufactured and took their products to market.
Remember, I traveled the world and I saw the German industries and the machinery and technology they were inventing and using. I saw how the Japanese were manufacturing cars and other products. They were innovating all the time and I witnessed them taking huge market share from American industries in the ’80s and they still are now.
I just knew that as a company, we needed to always innovate, you know, never get comfortable because we wanted to grow and to do that I knew we couldn’t become “hokey”.
INTERVIEWER: Would you say the same thing about the U.S. furniture industry?
WANEK: Absolutely. That’s why there are only a few companies manufacturing here now compared to what they were making 30 years ago.
INTERVIEWER: So you think the furniture industry here in the United States is just behind the times, that they haven’t stayed up with the technology?
WANEK: No, I think that complacency developed in the ’80s and ’90s, and much into the mid-2000s. Business was really good for many companies back in the ’80s-’90s, and they didn’t see the need to change.
The attitude has become something like “you know, we’ve been around for a lot of years, the market knows who we are, we’re always going to sell furniture,” and at that time they were selling a lot of product.
They never really looked at the Asian factories and how their manufacturing would eventually disrupt the American manufacturing of furniture. Since 2000, over 400 factories have shut their doors, putting several hundred thousand employees out of work, including the ripple effect of these manufacturing job losses.
When we started with 35 employees, we had a responsibility to them and their families. We knew we had to innovate and we had to know what was changing in our industry all the time to be sure we were innovating. We were always concerned that there’s somebody in the world that’s going to out maneuver us. And at times they do. And you’ve got to figure out how you’re going to outmaneuver them. It never stops, never will with us.
INTERVIEWER: Well, the furniture industry always has been known as a knockoff industry.
WANEK: I don’t consider Ashley too much of a knockoff company. I think that we’ve innovated with more products and services, and that’s why our company has grown. You know, we’ve created a lot of products, and we’ve redefined a lot of price points. We’ve come up with, as I told you earlier, a lot of new technologies to support our operations and our retailer’s operations. A lot of new concepts in furniture. I guess that a lot of the industry may be knockoff, but I don’t consider Ashley in that category. Certainly there are commodity products that we have to offer. It’s part of the game. Because of how many products we introduce each year and with our continued success, I think Ashley may be copied more than any other company.
INTERVIEWER: Let’s go back and pick up some of your growth stages and product development. For instance, I know you make upholstery now in Mississippi.
WANEK: We manufacture in Mississippi, Pennsylvania, Wisconsin, Southern California, Pennsylvania, and we have invested in a new mega-factory in North Carolina. We’ve also added new distribution centers in Chicago, Texas, California, Florida and other key locations so we can service all of our customers, quickly and efficiently.
INTERVIEWER: Step us through the stages that resulted in your manufacturing at these various locations.
WANEK: It’s about offering the service. It’s a hub-and-spoke kind of thing. You can’t afford to drag furniture from one end of the country to the other. You can’t manufacture in Virginia and sell in California. It’s just too much freight, too much waste and if it is handled too many times during the shipping process, too much damage. So transportation has always been about being close to where your market is. Since we started out being located at the end of the world in Wisconsin, we needed to figure out logistics better than anybody else, whether it is rail, whether it is intermodal, whether it is truck transportation, whatever. We are one of a handful of companies in North America that has invested in an Intermodal Yard to handle containers via rail directly to the Arcadia plant.
We had had to be different because we weren’t located where the population lives, in the East, the West and the South. So logistics has always has been a focal part of Ashley, which other manufacturers maybe didn’t need to be so concerned about. If you were within 500 miles of 50 percent of the population of the United States, it wasn’t quite as important as it’s always been for Ashley.
INTERVIEWER: So you decided you needed to produce closer to where a lot of your market was. You couldn’t do it all in Arcadia, obviously.
WANEK: No, and do not want to do it all in Arcadia. You really don’t want to be any bigger than that in any one location. We have over 13,000 employees in the United States and we’re extremely proud that Ashley Furniture now contributes over $2.5 billion to the U.S. economy, but when you add the ripple effect of our suppliers and vendors, that number grows to over $16.5 billion as of this interview.
INTERVIEWER: When did you launch your Mississippi operation?
INTERVIEWER: And did you acquire some existing companies?
WANEK: Yes, we acquired some very small companies in the Tupelo area. And we did that because, obviously, we wanted instant credibility. You know, if you’re a case goods guy and all of a sudden you’re in upholstery, everybody’s going to say, “What the heck do you know about upholstery?” If you’re a very small company, doing maybe, I don’t know, six, eight million dollars in annual revenues, with a little over a hundred employees… We’ve grown them from there. And more recently in 2011, we acquired the intellectual assets of Berkline and BenchCraft.
INTERVIEWER: Your Mississippi manufacturing operations are almost 100 percent upholstery, correct?
WANEK: Yes. Motion, recliners, sectionals, stationary… We do most everything at one plant. We don’t segment our manufacturing, doing recliners over here and stationary over there. We do it all in one plant, which is kind of the opposite of what certain experts in the industry told us. “You can’t manufacture recliners in a stationary plant,” they said.
We’ve never cared about the so-called experts. We do a lot of things like Toyota does. In some plants they manufacture the Lexus on the Toyota line, Toyota, Lexus, Lexus, Toyota, Toyota, and so on.
INTERVIEWER: So you obviously did not accept the conventional wisdom.
WANEK: No. That’s because we weren’t bred by conventional wisdom from the beginning.
INTERVIEWER: Tell us a little bit about the Pennsylvania operation and how it started.
WANEK: It’s in Leesport. It’s a 1.2 million-square-foot facility, and it manufactures all types of upholstery. It also distributes all of our products.
INTERVIEWER: And you mentioned you have something in Southern California.
WANEK: Yes, we do.
INTERVIEWER: Is that another large upholstery operation?
WANEK: Yes, upholstery, correct.
INTERVIEWER: Do you have other distribution centers around the country, and in Canada, Mexico or elsewhere?
WANEK: No, not in Mexico or Canada. As I mentioned, we’ve got Pennsylvania, we’ve got Mississippi, we’ve got California, North Carolina and we’ve got Wisconsin as our primary distribution centers. Then, we also have a lot of small retail distribution centers around the country like Chicago, Texas, California, Florida and other key locations.
INTERVIEWER: What do you mean by retail distribution centers?
WANEK: They are for our Ashley stores and our retail customers, so we can service them all quickly and efficiently, and support their growing e-commerce operations.
INTERVIEWER: So instead of each retail store carrying inventory, those in the same area have a common distribution center.
WANEK: Right, exactly. We practice what we preach with our commitment to GMROI and just in time delivery for these stores.
INTERVIEWER: When did the Pennsylvania operation come online, so we’ll have it on the record?
WANEK: We originally had some distribution in the early ’90s, but our main distribution center came online in 2001-2002.
INTERVIEWER: And the Southern California facility?
WANEK: South California, about 1981.
INTERVIEWER: Tell us about the growth of the Ashley stores. You said your first one was in Arcadia in what year?
WANEK: Yes, a small store in 1974.
INTERVIEWER: And then at Anchorage, that was…
WANEK: That was 1996.
INTERVIEWER: After that you started adding stores at a very, very rapid clip, as I recall.
INTERVIEWER: Did you have a separate division or a separate group of people that were pushing the retail end of the business?
WANEK: There were separate people involved in it, and yes, it’s a separate division.
INTERVIEWER: How have you handled the growth of your retail stores, especially since you started out in fairly remote places? And that’s a real distribution challenge, is it not?
WANEK: We already had distribution. We already had a lot of trucks on the road, as I told you, in the early ’70s, because of our location in Wisconsin. Distribution has been part of our culture since almost the beginning.
INTERVIEWER: So it’s a combination of rail and truck?
WANEK: Nowadays, railroad with containers is big. But at one point, probably till the late ’70s, rail box car shipments were probably 70 percent of our shipments. Today, we don’t ship in box cars at all. We ship containers via rail out to the various intermodal hubs. And then we’ll deliver the container to the store(s) or our distribution centers. We have a very sophisticated distribution system.
INTERVIEWER: And this is all dependent on computer systems, right?
WANEK: Right. We have the only intermodal facility in Wisconsin; it’s a private intermodal yard. And by the way, we are the largest importer of containers in the furniture industry, and the 15th or 16th largest importer of containers overall in the United States.
So we have a very sophisticated logistics and forecasting system, second to none. We spend tens of millions of dollars annually on information technology. So our supply team and systems are the best in the industry. So distribution isn’t an issue for us.
INTERVIEWER: So you’ve developed a highly efficient distribution system, obviously. Was this something you had seen and studied somewhere, such as in Japan or Europe?
WANEK: No. It’s survival. When you live in Wisconsin, you’ve got to get innovative, because you don’t have this gift of all these people living very close to you. Plus, most of the major population clusters live on the East Coast, the West Coast, or the South, and our innovations had to include how we serviced them efficiently and quickly.
INTERVIEWER: You did it from the very beginning because you had no other choice.
INTERVIEWER: So, in a way, it’s a good thing you started in Arcadia.
WANEK: That had its advantages. Not only that, but all of the industry in North Carolina and Virginia figured, “What are those Yankees up to? They don’t know anything,” so they always left us alone.
INTERVIEWER: Do you make your own motion mechanisms?
INTERVIEWER: You do all your frames?
WANEK: Yes, we do.
INTERVIEWER: So over the years you’ve developed important relationships with suppliers, right?
WANEK: Yes, we support over 7,500 businesses at my last count in the U.S. alone. Remember, we consider ourselves to be pretty sharp in the manufacturing arena. And that also makes us very sharp buyers. We have the ability to look at suppliers and figure out who is good and who is not good.
And obviously you want the sharpest manufacturer that you can get, because you want the best price, you want the best quality. And remember, we always work very closely with our suppliers to help them improve and be more competitive, too. But you also want somebody that’s going to be there for a long time, a business that’s not going to go broke.
INTERVIEWER: So you’ve developed a process for selecting those suppliers.
WANEK: You’ve got to understand that if you’ve been in the business since 1961, for 56 years like I have, you get to know who’s out there. It isn’t like you’re coming into something new and you’ve got to do a lot of research to find out who’s good and who’s not. The furniture industry also is a very small industry in terms of knowing everybody else’s business.
INTERVIEWER: Tell us how you’ve worked out your overseas production?
WANEK: Between 1984 and 1990, I made approximately a hundred trips to Asia. I was there approximately two weeks; I was back here approximately two weeks. I ran both businesses. Created and managed the business developments, and cultivated the relationships.
And then, in 1989, my son Todd started taking that over, ran our Ashley Taiwan operations, started the operations in China, and he did that for a number of years. Then, in 1994, Todd came back to the U.S. to start and run our upholstery division. But he lived in Asia for about five years. So we know the Asian business probably better than anybody else. And we were there early on. We understand it.
INTERVIEWER: There must have been tremendous language and cultural barriers back in the early days. How did you deal with some of those things?
WANEK: Decently. The culture back then was primitive compared to what it is now
INTERVIEWER: Well, you had to train; you had to bring certain people on.
WANEK: You do have to train and develop the right people. You had to make sure that people really understood that there wasn’t a big hole in the middle of the United States here where you could simply dump product and be successful. They had to understand that every single product was going to be scrutinized by a customer before they took it into their home. So, yes, that was a big educational process for people that didn’t understand the U.S. market. It took a lot of time.
INTERVIEWER: I assume quality control was a major consideration for you.
WANEK: And we’ve always had a staff of engineers and technicians overseas where we do business. To this day, we have a huge staff of engineers and managers that control the quality of the business that we do.
INTERVIEWER: So you’ve been able to recruit local people into your business in the Far East?
WANEK: Yes. They have a very good educational system. As a matter of fact, many of their furniture schools are probably far superior to the United States furniture schools. But with the success of High Point University and their curriculum under the stewardship of Dr. Nido Qubein, I am seeing a real change underway that should have a very positive impact on our business in this country.
INTERVIEWER: Tell us about your sales force. You have a dedicated sales force, do you not?
WANEK: No. They’re all independent sales representatives, with a few in corporate sales management.
INTERVIEWER: And the reps are strictly on commission?
WANEK: Yes, strictly commission, except those who are in corporate sales management.
INTERVIEWER: How many dedicated stores do you have now?
WANEK: Over 600.
INTERVIEWER: And how many of those are company owned?
WANEK: About 10 percent.
INTERVIEWER: Is that by design? Do you want to have about 10 percent company-owned stores, or what’s your philosophy?
WANEK: No, we don’t want to necessarily own the stores. But let’s take as an example the Chicago area, or the Orlando area. It would be very difficult to find someone that had enough capital to take on that kind of a market and to survive, since you need to have a pretty large number of stores to serve the big metro areas efficiently. Other than that, we want licensees; we don’t want to own the stores. But if we were to go into a market like New York, for example, you’d have to drop 10 stores into there like, now, all at once to maximize your sales, advertising and marketing expenses. You can’t do it effectively one store at a time. And it’s difficult to find people that can do that.
INTERVIEWER: But in a major urban market you want to make a big splash when you enter it.
WANEK: You can’t survive unless you do make a big splash.
INTERVIEWER: In top management, of course, you have your son, Todd. Are there any other family members involved in the business?
WANEK: My daughter Shari started with our international operations and is still involved when needed. My grandson Cameron, Todd’s son, is following his father’s footsteps learning everything about the company just like he did. I have another grandson, Travis, Shari’s son, who is managing our overseas manufacturing. I also have my granddaughter, Laura, who helped us establish stores in China, who also lived there for three years, and is now helping us manage our e-commerce side of the business.
We consider Ashley a family company, not just because of our family, but because of all the families that collectively work for us in a variety of roles and departments, many for over 30 years.
INTERVIEWER: And you have one son and two daughters?
WANEK: I have two daughters. One of them is a CPA, and lives about a hundred miles from us. And then there is Shari, who established and continues to work in our International Division. Shari also works on our family and corporate charities.
INTERVIEWER: And your daughter who is a CPA is not involved with Ashley?
WANEK: Kati is involved in some projects, from time to time.
INTERVIEWER: Do you have a specific growth target in mind at this point?
WANEK: We still want to grow, but we manage our growth very carefully today. We don’t think it would be healthy to try and grow organically at the growth percentages we have experienced in the past. Just think about it, what kind of infrastructure it takes to grow your business by millions of dollars a year, just in terms of distribution, trucks, people, technicians, training. I mean it gets to be a big, huge undertaking to continue to grow those numbers. And this doesn’t include the high costs of government regulations that restricts the manufacturing sector everywhere
For instance, the code of U.S. Regulations is over 175,496 pages, the height of a six story building. And this data is from 2013, can you imagine where it is today? And did you know that their regulations cost U.S. manufacturers like us over $19,000 per employee per year? Add the costs of government regulations to the costs of infrastructure costs above, and you’ll quickly realize that growth has to be carefully scrutinized.
As it pertains to future growth, who knows? It’s really up to Todd and what he wants to do. It’s his company to determine those factors now.
INTERVIEWER: Just managing the current structure is a huge task in itself, correct?
WANEK: Yes, it is. I talk to our people all the time, and sometimes I say, “You remember when we only had occasional tables? How much time and effort and worry we put into only occasional tables?” Now you’ve got every category of furniture, plus furniture stores, plus a worldwide furniture network that you’ve got to keep track of. Yes, it’s a lot to keep track of.
INTERVIEWER: You’re still operating with a very lean management team?
WANEK: Leaner than anybody else our size.
INTERVIEWER: How do you keep track of it? You can’t visit 600 stores a year.
WANEK: You know what? We have a great team, and there’s telephone, email, video conferencing, smart phones and so much technology for instant communication, and we use them all. We have developed great systems and processes to deal with our growth, so when things are happening out in the field, we hear about them pretty quickly.
INTERVIEWER: You’re keeping your ear to the ground, obviously.
WANEK: That’s the way the information flows. It’s not so difficult.
INTERVIEWER: Now that Ashley is so large, it’s almost inevitably going to become more subject to cyclical ups and downs in the economy and the housing market than you were in the early years, I would think.
WANEK: This isn’t such a bad time. If you were around in the early ’80s, when interest rates were 23.5 percent, prime was 21.5 percent… Unemployment was 10 or 12 percent. Inflation was 10 or 12 percent. You know, you had the misery index. All these young buckaroos that think that it’s tough now, we’ve gone through these cycles before, and tougher cycles. We know how to deal with it.
INTERVIEWER: The industry has always gotten through tough times, hasn’t it?
WANEK: Correct. And it still will.
INTERVIEWER: Let me ask you a few questions on topics I don’t think we’ve touched on at this point. What about your own personal management techniques? What has been your approach to building the company, building the people?
WANEK: Touching it and feeling it. We’re a very hands-on company. Todd would call it a “dirty fingernails” company. We’re into everything, and we watch everything. We’ve got good systems, good controls, very committed people and we invest in IT/technology every year. Very, very good controls. There isn’t anybody that’s even close to where we’re at from a control standpoint.
INTERVIEWER: Have you ever fallen into the trap of maybe trying to micromanage, where you lose sight of the big picture?
WANEK: Look, I am always interested in what is going on in the company. I ask a lot of questions. That’s what good managers do and that’s a very important part of the Ashley culture today and Todd perpetuates this daily. Ashley is my passion, OK? Is that micromanaging? I don’t consider that micromanaging.
INTERVIEWER: Well, not necessarily. But, obviously, you can’t be supervising production workers on the line –
WANEK: No, but if you go back to, let’s say, the ’70s, you didn’t have computers. Your accounting maybe wasn’t very sophisticated. OK, but if you know your costs, you can know if your costs are right. You go out and look at the production line, and if everybody is working, you know you’re productive. You go at the end of the line, you can see if your quality is good. Then lastly, you go and you look in the scrap bin, and you know you’re operating efficiently if your waste is OK. Don’t ever forget that you still have to manage to a large degree that way, and touch and feel and know what’s going on.
INTERVIEWER: And computers are useful, but only…
WANEK: The numbers computers give you, they’re history. It’s hindsight. You’ve got to get on the floors; you’ve got to know what’s going on when it’s happening, not after it’s happened. But we have adapted and use historical data to predict accurately future sales trends and more.
INTERVIEWER: What would you say about some of your major competitors? Competition has obviously stimulated you. You’ve tried not to be a “me, too” company. Do you constantly study your competition?
WANEK: Certainly. Obviously, you have to know what your competition is doing. And, you know, a lot of it comes from the sources that I was telling you about. A lot of it is fed to you. And you look at ads. You go in stores. You do all those sort of things and it isn’t like somebody that’s just coming into the business. You have a knowledge base, and you just keep maintaining that knowledge base. It isn’t like you have to develop a whole knowledge base overnight. I’ve been doing this with Ashley since 1970 and with over 56 years of knowledge in all facets of the industry, we’ve done them all quite well.
And capitalism is a great system and in the U.S. free market capitalism all the laws favor the consumer and only the successful businesses survive in a free market capitalistic economy. We’ve all learned that those companies that don’t keep their ear to the ground, innovate and pay attention to their customers, fail. Free market capitalism cleanses itself because you must compete with competitors worldwide in today’s world economy.
INTERVIEWER: Give us your evaluation of furniture markets today. You said earlier that the Dallas market nearly overtook the High Point market. I remember in the early ’80s Dallas was going great guns. What happened to the Dallas market?
WANEK: A recession. The Dallas Market should have strategically done certain things to prevent the decline. They didn’t want to do it because they were worried about their major lender continuing to lend them money, and they didn’t take the strategic moves that they should have. Otherwise, they would have had a successful furniture market.
INTERVIEWER: Did Ashley do well in Dallas?
WANEK: Ashley did so well in Dallas, because all of the Southern manufacturers left the market, we just took their market share when the customers kept coming. We loved the Dallas Market. It was very good for our company.
INTERVIEWER: Were your costs to show in Dallas comparable to High Point, or were they substantially higher or lower?
WANEK: I wouldn’t necessarily say there was a whole lot of difference, but as everybody else turned their lights out in Dallas, we left ours on. The customers kept coming, and we got a fantastic slice of the market because we were there and they weren’t.
INTERVIEWER: And you’re still there?
INTERVIEWER: Why did you decide to pull out?
WANEK: We kind of turned the lights out. We were one of the last furniture exhibitors in Dallas, and they were going to move us because they were restructuring the market. They were going to spend a lot of money on a new space for us, and totally move our space. I said no because I didn’t see the future of that market for furniture. I didn’t want them to spend the money, which they would have spent, but they in turn wanted a longer-term lease from me, and I didn’t want to do it.
They were going to vacate the fifth floor and make it gifts or something that we weren’t interested in, take a big chunk of it, and move us to wherever it was. I wasn’t going to have them spend several hundred thousand dollars and then, in turn, sign a longer lease. Because I just didn’t see it happening in that market. Then we did leave.
INTERVIEWER: Did you ever try Atlanta?
WANEK: Yes, we were there too.
INTERVIEWER: And you found that useful for a while, but you’re no longer there?
WANEK: Yes, but we haven’t been there for years. It was a great market, probably one of the friendliest markets that we ever participated in. They were easy to work with and we loved all the people.
INTERVIEWER: Are you speaking of the John Portman era in Atlanta?
WANEK: Yes, John actually came up a couple times and visited with us at our space and to Arcadia. Tom Mitchell was the main market executive that did a great job with the market, so we enjoyed that market for a number of years, but then it got to the point where it made no sense. Then we did leave there too.
INTERVIEWER: Now we have the High Point and Las Vegas markets. How would you assess those markets?
WANEK: We go wherever the customer’s going to go, if they go to Vegas or High Point, we’ll be there.
It’s all based on traffic. Las Vegas has higher costs for us compared to High Point, but you see many more dealers. So how do you measure it? If I want to put a per-dealer cost on it, the Vegas market isn’t that much different than High Point, even though it’s less expensive to display here.
INTERVIEWER: Tell us about your involvements in furniture associations. Has that always been something that’s been important to you, perhaps as part of keeping your ear to the ground?
WANEK: I was president of the AFMA, the American Furniture Manufacturing Association, known now as the AHFA.
I’m not as involved today, because I’ve already gone through the chairs and I’m kind of a has-been, and there’s new guys that will do that, and that’s good. I do attend all of the meetings and we contribute.
We also attend Furniture/Today’s Leadership Conferences, HFA – Home Furnishings Association Conferences, and other industry-related events.
We also belong to the U.S. Chamber of Commerce and NAM – National Association of Manufacturers.
However, the game has changed today because of government regulations and such, and because of this they all need to work closely together to be sure we all can work and compete effectively. I strongly encourage this cooperation and this has become a mission of mine to help improve our industry.
INTERVIEWER: How much time do you actually spend in your office in Arcadia, would you say, as a rough percentage?
WANEK: Not much. Of course, I’m a Florida resident now, you understand. I no longer live in Wisconsin. I’ve lived in Florida since 2005, when I moved down there. I’m really on the road most of the time, going somewhere, or out in our many plants throughout the world.
INTERVIEWER: And does Todd pretty much hold down the fort, so to speak?
WANEK: He does the same thing that I did. Todd runs the company and he’s involved in every aspect of the business and to do that, you must be hands-on, the person that knows personally what is happening in the business.
INTERVIEWER: He’s traveling?
WANEK: You know, in this electronic age, you’ve got a computer wherever you go and you’ve got the Internet wherever you go. You don’t have to sit in an office anymore.
INTERVIEWER: You’re well-known as a sculptor. How did that happen?
WANEK: I did a little bit of it in the ’60s.
INTERVIEWER: This would have been when you were in your 20s.
WANEK: Yes, In Red Wing, Minnesota. That’s when I started doing sculpting a little bit.
INTERVIEWER: So what inspired you to do it at that point?
WANEK: I wanted something else to do, just had an interest in it. And then, in 1989, the city of Arcadia opened a new park, 54 acres of brand new park. And we really didn’t have a use for that land other than a couple of ballparks, but we had a very aggressive mayor, Eugene (Gene) Killian, and he didn’t know what he was going to do with 54 acres, and he was getting a lot of criticism for buying all this land, as he would in a small town. Anyway, he didn’t know what to do with it, so I gave him an idea.
I told him: You should develop this walk, this walkway in the park, and call it Soldiers Walk. I worked with the city landscape architect to help with the layout of the proposed park. I wanted to create a bronze sculpture of a soldier in honor of my friends that served in the Vietnam War. And I originally was going to put this one bronze sculpture there on the walk which started 1964 through 1975. So then I thought, “Well, my dad lived through World War II, then my grandfather was in World War I,” and this Soldiers Walk just grew from there into a major walkway, into sort of a time line through all the wars. Now we get over 30,000 visitors to Soldiers Walk every year. It’s become a major regional attraction and event venue.
INTERVIEWER: But who taught you to be a sculptor?
WANEK: Well, you understand that being a sculptor means you create a clay model first, before the final piece is molded. It isn’t like I took marble or granite and sculpted out of that. First you create a plaster mold, from the clay model, then you cast the bronze from that. But anyway, it’s something I just picked up and did.
INTERVIEWER: Have any other leisure activities ever caught your interest?
WANEK: Work. My work is my hobby and like most, I love my hobby. Sculpting has been really the only thing that I’ve done for a pastime and a leisure activity. Other than that, it’s always been work and I love what I do, every day.
INTERVIEWER: Would you call yourself a workaholic? Would that be a fair description?
WANEK: My wife would probably call me that, but she says my son Todd is worse, and I think she’s right. Todd probably works 90 hours a week. I probably work 65 hours a week now, so we both put in a lot of time.
INTERVIEWER: Are you considering retirement?
WANEK: I was born in 1941 and today, at 75 years old, I really haven’t thought about it. I really haven’t got a passion to play golf or fish or do anything like that. I don’t know, I just seem to spend all my time at work. I grew up on a farm, worked 365 days a year. As I mentioned earlier, we never even had a radio until I was 9 years old, when we finally got electricity to our farm, and plumbing when I turned twelve. I wasn’t exposed to all of those opportunities because of that. Subsequently I never went anyplace as a young boy. Never really did anything outside of work, never went to any ball games, never participated in sports, and never really developed an interest in those types of activities.
I haven’t thought about it. I’ve been told good retirement is doing what you want to do, when you want to do it. If work fits that definition, then it’s good, right? And for me…I LOVE to work!
INTERVIEWER: You never played sports in high school, anything like that?
INTERVIEWER: What were you doing during that time?
WANEK: Working on the farm, before I went to school and after school. Long hours, seven days a week, 365 days a year.
INTERVIEWER: Ashley is often described as the Wal-Mart of the furniture industry. Is that a fair description? What’s your reaction to that?
WANEK: Obviously, I think they’re talking about being the Wal-Mart of the industry in terms of growth, logistics and delivering the goods consumers want. Anyway, I hope they’re right.
INTERVIEWER: I think it’s also about your efficiency as a company, and the global nature of your business.
WANEK: Well, understand that the global nature of our business was a necessity.
INTERVIEWER: But you’re still making 60 percent of your product in the United States, I think you said.
WANEK: It’s over 60 percent.
INTERVIEWER: Or do you think maybe production will move back to the United States because of the uncertainties of transportation and fuel costs?
WANEK: Personally, I think it will be difficult for manufacturing to return in the near future, especially to the degree it once was. There are so many obstacles that need to be overcome, like higher taxes compared to world competition, regulations and more. Because of these many obstacles, there are lot of better places, other than the United States to manufacture furniture. Unless you can give the consumer the best designs, best quality, the price and the best delivery, ultimately the consumer will decide who and where to buy from, and that’s why a lot of manufacturing has disappeared from the U.S. And let me add, that to me, that’s a very sad statement. Today, we contribute over $2 billion dollars to the U.S. economy, over $16 billion when you attribute the ripple effect of our 7,500 plus suppliers and vendors that support us.
We’ve invested in manufacturing, warehousing, transportation and infrastructure all over the United States since we began. It probably would have been considerably more, had we not been hampered by regulations, taxations and other hindrances. These types of constraints created the opportunities in Asia, and other countries, to take market share from U.S. manufacturers. Think about this. All those jobs that left from the furniture industry and other manufacturing industries; people overseas are getting paid those wages today and they spend those wages they earn in their home country, not here, where they used to be. But we are still a U.S. company and willing to take risks, even with all of the constraints mentioned.
Let’s examine our most recent investment in the United States, specifically our new North Carolina facility we purchased and what it takes for us to grow our business in the United States. North Carolina has lost over 42,000 furniture manufacturing jobs since 2004, which validates what I just said above. If you look at our industry as a whole, we’ve lost over 400 factories equating to over 290,000 jobs lost, including the ripple effect. That’s just plain sad to me.
To date, we’ve invested over $200 million in this new facility alone, which was once owned by R.J. Reynolds Tobacco. It was a great facility, but it needed to be reconfigured for manufacturing furniture. The cost of the facility is one thing, but the investment in machinery, people, training, transportation, logistics and everything necessary to make this facility profitable in the future is staggering, maybe close to a quarter of a billion dollars. Do you have any idea how long it will take before we can start making a profit on this investment? Maybe five years, maybe more before we even begin to start paying for this investment, but regardless we made that investment that has created hundreds of good paying jobs.
If the U.S. would not hamper companies like ours with over-regulation and taxation and lack of educational and skilled labor, imagine what we and other companies could do? Imagine what other American manufacturers could do? Creating more well-paying jobs for families all over the U.S., but until that changes, we must go where the business climate affords us the best opportunities and allows us to give our customers the best value.
INTERVIEWER: So it’s not just less expensive labor?
WANEK: No, not at all. It isn’t only cheaper labor, its smart labor. When you deal in the Orient, they are smart people, they catch on quick, and they’ve got a good work ethic. It’s all of it.
I don’t know where furniture production will move to after Asia, but wherever it does go, the attitude towards business must be right. A positive attitude towards businesses in general, is very important wherever you are.
They are smart and hardworking people. I’m not saying we don’t have equally bright people in the United States. But I’m saying we’ve got more and more regulations. We’ve got more and more challenges that we have to worry about. It’s more of a restrictive society. Like I said, attitude is very important, important for the economy and especially in creating jobs. Industries will continue to migrate where the attitudes and business environments are supportive, not restrictive.
When it comes to buying furniture, “the consumer rules,” and they’re going to buy what they perceive to be the best value. And the United States can’t manufacture the best value because of the reasons I mentioned above. Just ask anybody who’s buying an automobile today. Many of the top automobile brands sold today come from foreign countries. Why, because that industry didn’t innovate and deliver products that the consumer wanted and they, the foreign competitors, naturally filled that gap, taking a ton of market share away from United States auto manufacturers.
Remember, free market capitalism is what made this country the greatest country in the world. Capitalism rewards those companies that constantly innovate, making and delivering products and services consumers want. And it punishes or eliminates those companies that don’t.
Take Detroit for example. A great city that once had a population of 2 million people in the 1960s, today their population is 700,000. They also once had 300,000 manufacturing jobs – today they have 30,000 manufacturing jobs.
INTERVIEWER: Aren’t some of these same restrictions and regulations going to start happening, and may already be starting to happen, in the Far East?
WANEK: When you compare Asia with the United States, even though we do have some of those restrictions over there, they’re very moderate compared to what we’re accustomed to here in the United States.
We run all of our businesses worldwide to our U.S. standards no matter where they are located.
INTERVIEWER: Have you ever had any serious problems hiring, training and retraining workers in the United States?
WANEK: No. We are very proud of the great work environment we offer to our employees and the ability to further their careers and education with the many benefits we offer.
INTERVIEWER: In top management, you have your son Todd. Are there any other family members involved in the business?
WANEK: As I’ve already said, my daughter Shari started and managed our international operations until 2012 and from time to time she still gets involved when needed. My other daughter is a CPA and has some limited involvement in Ashley.
I have my two grandsons, Cameron and Travis, and my granddaughter Laura working in the business too. Cameron, Todd’s son, is learning all of the aspects of the business like he did. Travis, Shari’s son, is directing our overseas manufacturing and Todd says he’s one of the brightest manufacturers he’s ever known. And my granddaughter Laura, Kati’s daughter is a driving force with our e-commerce side of the business. She’s a dynamic leader and visionary and as I mentioned, Laura lived in China for three years and was instrumental in developing our retail operations over there too.
INTERVIEWER: Are you involved in social, civic and business organizations that are important to you?
INTERVIEWER: Do you have a favorite charity that you support?
WANEK: We give to a lot of charities. The City of Hope, we’ve supported heavily, as has a lot of the furniture industry. The Mayo Clinic Foundation, we’ve supported heavily. We also support High Point University. We have also started Ashley for the Arts, where we raise money for local area charities and schools. And there are a lot of other civic organizations that we support financially and contribute to. Of course, the Soldiers Walk Memorial Park in Arcadia, since 1989, has been a big project for us and we support charities throughout the country and the world.
INTERVIEWER: Are you still sculpting?
WANEK: No, I have nothing planned at this time.
INTERVIEWER: Do you have any more business goals that you want to achieve? What do you think Todd could do?
WANEK: Whatever he wants to do, I’ll support him.
INTERVIEWER: Do you have any other personal goals that you’re still trying to achieve? Obviously, you’ve done so much, with Ashley now the number one retailer and number one manufacturer in this country, that you surely feel pretty satisfied.
WANEK: I would say that at this point I’m pretty satisfied. But I could change my mind on that! It’s definitely a changing landscape in the U.S. furniture industry. And to continue to be successful, to continue to offer opportunities to all the people that are at Ashley, is really what I want to do. But, the changing retail landscape with e-commerce is a challenge for all of us. But like I said before, it’s Todd’s call today and going forward.
I love working with and supporting Todd; he is a great visionary and leader of the company. He worked at Ashley through high school and college in many different areas in the company. Then he became President of the company in 1997 and then in 2002 he became CEO. What he’s accomplished with this company makes me very proud. It’s his legacy now and I’m here to support him.
INTERVIEWER: Have you ever thought about going public?
WANEK: No plans at this time, but it’s an ever-changing world.
I don’t want anybody to exploit what we’ve spent our lifetime building and change the systems and processes that made us successful. Which I see happening in too many public companies. You know, I don’t think it’s healthy for a company to have to manage quarter to quarter, based on what the public sees in their quarterly report. Never has been. We’ve been able to take huge risks, risks that a public company would never have been able to do. And it was for the long-term health of the business. Unfortunately, our public companies don’t look at that today. You know, it’s all for the short-term.
As I said, there are so many factors to be considered as it pertains to going public. We’ve done a really good job growing this business and providing great employment opportunities for thousands of families. As of today, we don’t want to disrupt that.
INTERVIEWER: What risks have you taken that flopped?
WANEK: I did a Brazilian venture. That’s the only thing I can say in my life that has ever flopped. And that was primarily due to currency fluctuation issues.
INTERVIEWER: So you were trying to manufacture product…
WANEK: Not trying, we did. We had the biggest furniture factory in Brazil.
INTERVIEWER: And you started this when?
WANEK: About 1999 or thereabouts, and ran it for three or four years, and then got out of it.
INTERVIEWER: So the currency killed you?
WANEK: Yes, the Brazilian currency, the real, appreciated in regards to the U.S. dollar, and now you can no longer manufacture in Brazil and be competitive in the United States and other world markets.
INTERVIEWER: I know you sell heavily in Canada. What about Europe? The Far East?
WANEEK: We sell in 123 countries. We’re the largest U.S. exporter of furniture and do more business internationally than any other U.S. furniture company.
INTERVIEWER: What are your best foreign markets, at this point?
WANEK: Canada’s obviously the best. Mexico is good, also the Middle East, Australia and then a wide variety of other countries.
INTERVIEWER: Do you see a chance to market your furniture in China in the near future?
WANEK: Yes, and we’re approaching that very aggressively with our Ashley store format. We hope to have over 1,000 stores there someday.
INTERVIEWER: Is there anything else you would like to say for the record?
WANEK: No. That’s it.