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The sad news about Klaussner’s closing has brought back many memories. Back in 1979 when I was working for Wheat First Securities, I received a call right before leaving for the spring High Point market from the CEO of one of the largest U.S. furniture manufacturers, asking if I would meet one of his good friends at an association’s office at a time. I agreed and was intrigued about meeting a large manufacturer from Europe.
In the association’s offices several days later, an associate from Wheat and I met a surprisingly young Hans Klaussner, the CEO and owner of Hukla-werke in Germany, one of the largest and most successful upholstery manufacturers in Europe.
From the beginning, I sensed that Hans was as unsure of why we were meeting as I was. Soon, he asked what I thought of Naperville, Ill.-based Kroehler, which at the time was the largest upholstery maker in the U.S., and its stock was traded publicly. I explained that I was not recommending it as an investment. Asked why, I explained it had a long record of losses, was very dependent upon retailer Levitz and operated unionized factories in a largely nonunion industry. Some retailers had recently dropped Kroehler because of its pricing and how close it was to Levitz.
Hans did not like hearing this. He explained he had employed a New York investment banker to assist him in acquiring Kroehler.
Having heard my comments, he asked “If not, who should I buy in the U.S.?”
Months earlier I had been fortunate to meet a true entrepreneur, Stuart Love, at his factories in Asheboro, N.C. I had been very impressed for many reasons, one being his speedy deliveries that retailers loved.
We got to our cars and drove to Asheboro, and Hans got to spend time with Stuart. He recognized that his company was growing quickly, making solid profits and had a strong management team including the respected J.B. Davis. Months later the transaction was completed, and the company renamed for its new owner.
Klaussner enjoyed decades of growth and profits before it changed owners about seven years ago.
I visited the company many times over the years, and the team there always was most hospitable. I hate to see this closing because it will create more questions about the profitability of our industry. And we don’t need that.
