SIC 2541
WOOD OFFICE AND STORE FIXTURES, PARTITIONS, SHELVING, AND LOCKERS



This category covers establishments primarily engaged in manufacturing shelving, lockers, and office and store fixtures, plastic-laminated fixture tops, and related fabricated products, chiefly of wood. It also includes prefabricated partitions made of wood if they are designed to be attached to floor; if they are designed to be freestanding or part of an office furniture panel system, they are classified under SIC 2521: Wood Office Furniture. This category excludes wooden refrigerated cabinets, showcases, or display cases, which are found under SIC 3585: Refrigeration and Heating Equipment.

NAICS Code(s)

337110 (Wood Kitchen Cabinet and Counter Top Manufacturing)

337212 (Custom Architectural Woodwork, Millwork, and Fixtures)

337215 (Showcase, Partition, Shelving, and Locker Manufacturing)

Industry Snapshot

In the late 1990s about 2,300 companies were engaged in the manufacture of wood shelving, partitions, and fixtures for commercial and residential use in the United States. The vast majority of them—nearly 80 percent—were firms of less than 20 employees. Industry sales were $8.66 billion in 2000, with about 60 percent of the manufacturers posting sales of less than $1 million. Sales in the industry are split fairly equally between wood and nonwood fixtures.

The industry is strictly commercial in nature, and its fortunes are tied to the retail industry. Most fixtures—about 85 percent—are sold to retail stores. The rest are sold to schools, banks, hotels, libraries, and other non-retail businesses.

At one time, the industry manufactured many types of products that are now either obsolete or only rarely made, including butcher shop display cases and telephone booths. Other products have become prohibitively expensive to both manufacture and purchase because of the high cost of materials and labor. Nevertheless, many of the firms that supply wood partitions and fixtures are still thriving due to the increased demand for retail shelving and wooden display units. The industry has also benefited from the development of laminated plastic coatings, which increase the durability of a much-used wood surface.

Organization and Structure

Most companies in the wood partitions and fixtures industry were originally organized into divisions reflecting their potential customers. In general, they focused on assembling and retaining a staff of highly skilled woodworkers. Research and development, marketing, and customer support typically did not receive a high priority, especially among smaller firms. Even today, only the largest companies can afford in-house staffs to handle those responsibilities.

Manufacturers of wood partitions, shelving, and fixtures usually reach out to their markets by advertising in trade journals such as Restaurant Hospitality, Chain Store Age Executive, and other publications aimed at business owners and managers. They sell to a wide range of customers, including major wholesalers, contract hardware jobbers, display and fixture jobbers, specialty wholesalers, independent hardware distributors, export outlets, government agencies, original equipment manufacturers, national mass merchants, large home centers, and building supply outlets.

Background and Development

The wood partitions and fixtures industry emerged in the late nineteenth century during a period of tremendous expansion in the U.S. economy. Rapid industrialization attracted large numbers of people to cities, which in turn sparked the development of major urban commercial districts. The proliferation of small specialty shops and large department stores required a huge supply of fixtures for the display of merchandise.

Although they are no longer manufactured, wooden telephone booths once represented a small but important part of the industry. The first one was installed in 1889 outside a bank in Hartford, Connecticut. Western Electric continued to manufacture wooden telephone booths until the late 1940s, when the more durable glass and steel model was invented and went into production. By the 1990s, wooden phone booths were considered collectibles, and some sold for as much as $3,000.

The wood partitions and fixtures industry was hit hard by recession in the early 1990s, with the value of shipments declining from a 1990 peak of $3.1 billion to $2.8 billion in 1991. In addition to the economic downturn, this decline was attributed in part to the fact that many products became obsolete. The market demand for plastic imitations of wood, as well as the higher costs associated with fabricating real wood products, also had a significant impact on the overall health of the industry.

The mid-1990s, however, was a time of increased prosperity for the nation's wood shelving and fixtures manufacturers. By 1994, shipment values increased to $3.4 billion and were expected to reach $4 billion by 1998. Among their commercial customers, for example, the slow but steady growth of the economy and highly competitive retail atmosphere encouraged merchants to invest in new store fixtures to keep their product displays attractive. Manufacturers saw increased demand for both customization and flexibility. Retailers wanted a distinctive "look" that set them apart from their rivals. They were not interested in fixtures that could not be moved or changed to accommodate different kinds of displays, new inventory, or changing seasons.

Although metal fixtures gained popularity for their high-tech look and lower cost, wood was still the material of choice for those who preferred its warmer appeal. The market for combination wood and metal fixtures and shelving also grew during the 1990s, as did the demand for laminates. These gains, however, came at the expense of all wood products.

Wood shelving and fixture manufacturers in the 1990s were concerned about discounting and low bidding on projects, a practice they believed hurt the industry as a whole. Companies that operated in northern states were especially concerned about what they perceived to be unfair competition from Canada. The favorable exchange rate during the 1990s made it possible for Canadian firms to submit project bids that were substantially lower than those of their U.S. rivals.

Current Conditions

Sales of store fixtures reached nearly $8.7 billion in 2000, with about half coming from sales of wood fixtures. Of the 2,300 companies that manufacture fixtures, only about 25 percent of them concentrate on fixtures exclusively. Most companies in the industry are established businesses, with 70 percent of them in operation for 10 years or more. Fixtures companies tend to market their products both nationally and internationally, with only about 10 percent marketing their products regionally.

From 1995 through the end of the century, the fixture industry grew at a rate between 5 and 10 percent per year. This was mainly due to the continued economic expansion in the United States that, in turn, led to more disposable income and more retail sales. Retailers continued to expand, remodel, and open new locations, driving the demand for store fixtures, which accounted for about 85 percent of the industry's sales. However, the economic downturn of the early 2000s was expected to impact the industry.

Manufacturers in this category face a number of challenges. One of their top concerns in the late 1990s was the shortage of highly skilled woodworkers. Without such workers, manufacturers found it impossible to keep up with production. As a result, some companies started in-house training and apprentice programs. Increased levels of unemployment in the early 2000s helped to alleviate this problem.

Health concerns and environmental regulations also affect manufacturers of wood shelving and fixtures. Working in the wood industry brings with it a number of serious risks, including injuries caused by saws and drills and illnesses brought on by wood dust and paint vapors. As a result, companies struggle with high healthcare costs and a growing number of workers' compensation claims. They also incur mounting costs for disposal of hazardous wastes generated by the wood finishing process; furthermore, they have to abide by strict rules governing wood dust levels in their factories. Manufacturers are also subject to regulations aimed at improving indoor air quality, which is adversely affected by fumes from finishes and adhesives. Yet some of the products that were developed as substitutes perform poorly, as evidenced by less durable finishes and glues that fail.

Fixture companies need to cultivate overseas markets as well as broadening their domestic market. They have to develop new fixtures and use new technologies to become even more efficient in their manufacturing processes, if they want to stay competitive in the future.

Industry Leaders

Knape & Vogt Manufacturing of Grand Rapids, Michigan was one of the largest suppliers of wood partitions, shelving, and fixtures during the 1990s. Founded in 1906, it employed 1,056 people in 1996 at facilities in four states and two Canadian provinces. It reported sales of $150.3 million in 1999, a figure that included not only sales of wooden store fixtures and shelving but also those made from materials other than wood as well as drawer slides, hardware items, and miscellaneous furniture components. This represented a 20 percent drop in sales from the previous year, however, when Knape & Vogt posted sales of $181.6 million.

Lozier Corp., based in Omaha, Nebraska, was another leading manufacturer of wood fixtures. It posted sales of $190 million during the mid-1990s and employed nearly 2,000 people. Smaller firms engaged in the manufacture of wood shelving, panels, and fixtures during the mid-1990s were Stevens Industries of Teutopolis, Illinois, with 400 employees and sales of about $42 million; Dorfile Storage and Shelving Systems of Memphis, Tennessee, with 550 employees and sales of about $35 million; and Bernhard Woodwork of Northbrook, Illinois, with 70 employees and sales of about $9 million.

Workforce

In October 1999, the Labor Department reported that 544,600 people were employed in the furniture and fixtures industry; in October of 1998, the figure was at 532,700. The average hourly wage for production workers in the industry as a whole (both wood and nonwood segments) in 1999 was $11.37, up from $10.99 in October of 1998.

Further Reading

Adams, Larry. "Survey Says: 1995 Looking Good." Wood and Wood Products, March 1995.

Applefeld, Catherine. "Fixture Manufacturers Keep Up with Retailers to Stay Up-to-Date." Billboard, 16 September 1995.

"Customization Enhances Retailer Identity." Chain StoreAge Executive with Shopping Center Age, July 1996.

"Fixture Flexibility Is Key: Trend Toward Modular, Customized Units." Chain Store Age Executive with Shopping Center Age, October 1995.

Hill, Dawn. "In Two Reports, Costs Put Drag on Net." HFN: The Weekly Newspaper for the Home Furnishing Network, 15 May 1995.

"Industry Overview." National Association of Store Fixture Manufacturers, 5 January 2000. Available from http://www.nasfm.com/tools/indoverview.html .

"Knape & Vogt's Quarterly Profits Inch Up." HFN: The Weekly Newspaper for the Home Furnishing Network, 20 February 1995.

"Knape & Vogt Reports 1999 Fiscal Year and Fourth-Quarter Results." Knape & Vogt, 5 August 1999. Available from http://www.corporate-ir.net/i…/ir_site.zhtml?ticker=knape&script=410&layout=7&item_id=4563 .

"Looking At Business." National Association of Store Fixture Manufacturers, 26 November 1999. Available from http://www.nasfm.com/tools/lookbiznis/bizlooknov99.html .

Melaniphy, Margie. "Breaking into the RTA Storage Market." Wood and Wood Products, December 1995.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .



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