The Supply Side: Manufacturing push helps Alabama patio furniture maker

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.
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The tiny rural town of Wadley, Ala., is too small for a Walmart store, but its largest employer Wadley Holdings makes Meadowcraft rod iron patio furniture and fixtures like umbrella stands now sold in 500 Walmart stores.

Wadley, Ala., (pop. 406) has been energized with help from Walmart’s U.S. Manufacturing Jobs initiative during the past two years.

Ken Harbaugh, CEO of Atlanta-based Southern Sales & Marketing, said he purchased the Wadley plant out of a 2009 bankruptcy. The plant was dormant but Harbaugh said before it closed it was making a wide range of furniture and garden fixtures sold at retail stores. The plant also made high-end pieces sold to Hilton Hotels. He said the plant at its peak did $150 million in annual revenue.

“When I went down to Wadley to see about buying the plant, I was taken back by what I saw. Former employees were there mowing the lawn, weed eating around the plant’s perimeter. I stopped and asked them who was paying them for their work. One guy said that nobody was paying him but he had worked for the plant for 15 years and his father has also worked there and they wanted to see the plant reopen,” Harbaugh told Talk Business & Politics.

Harbaugh said that show of pride gave him a great feeling and the confidence to complete the deal. He said state and city incentives along with a new sewage system all came together and he was able to hire the former plant manager to plan for slow ramp up.

“We had one employee and (no) revenue when Southern Sales & Marketing took over the business around 2012, the Walmart thing has been a huge blessing to us,” Harbaugh said.

Southern Sales & Marketing has been selling other products to Wal-Mart, Sam’s Club and other retailers for years so Harbaugh was intrigued when he heard about Walmart’s U.S. Manufacturing initiative in 2013. He contacted the retailer in response to its request for U.S. patio furniture suppliers.

“The Wadley plant reached out to us through our open invitation to try and source more U.S. suppliers. They fit a lot of the criteria we were looking at given the seasonal nature of the items,” Cindi Marsiglio, lead for Walmart U.S. Manufacturing, told Talk Business & Politics.

She said the story in Wadley is a great example of a how the effort is creating jobs in small U.S. communities and also providing more U.S. made products for consumers at prices they love.

Harbaugh said the process to get the Meadowcraft patio furniture and fixtures into Walmart was smooth given he had worked with the retailer for at least 15 years. He said the plant started small but has continued to ramp up its footprint inside Walmart and beyond over the past two years. Today the furniture maker is the largest employer in Wadley with 250 workers and he said the plant will do between $20 million and $40 million in gross sales this year. He said the city wins because its people have jobs and the plant buys natural gas and other commodities for its operations.

Harbaugh said there is still plenty of growth potential to get the back up to 90% capacity or better and Walmart is a great partner to have.

Marsiglio said Walmart continues to look for more items made in the U.S. and this year the Meadowcraft plant in Wadley is making side chairs, full patio sets, and umbrella stands for the retailer. She said there is also a folding patio table from Lifetime which is new this year and made in the U.S., as well as new products from Igloo and Mohawk rugs which have been Walmart suppliers for many years.

While Walmart is on a mission to spend an additional $250 billion on U.S. made products by 2023, it’s just been three years since that announcement was made. Marsiglio said the retailer has learned much during that past three years. She said one thing for certain is that in the patio and home categories not all the production will be moved on-shore. She said it doesn’t make sense to deplete the import business which can be a complement to a growing U.S. manufacturing segment.

U.S. MANUFACTURING SUMMIT
Marsiglio said the fourth annual U.S. Manufacturing Summit has been slated for June 28 and it will be in Bentonville again this year. She said registration for the event is now open as well as the annual “open call” which is set also set for June 28 at the home office in Bentonville. Registration is required for both events by May 27 at this link.

The one-day agenda will feature the following:
• Celebrity guest Marcus Lemonis of CNBC’s reality series, The Profit;
• Doug McMillon, CEO of Wal-Mart Stores;
• Greg Foran, CEO of Walmart U.S.; and
• Steve Bratspies and Tony Rogers, chief merchandiser and chief marketer, respectively, for Walmart U.S.