Decorize adds new business, changes listing

That’s not due to a lack of interest.

“We were on a conference call last week, and I had a board member in the country of Jordan, one in China, (and staff members) in Indonesia, in India, North Carolina, Dallas, Springfield and Kansas City,” said Decorize President and CEO Steve Crowder. “And I’m thinking, ‘Is this unbelievable or what?’ Five or six years ago, you would have never seen something like that, but now it’s our weekly conference call.”

It’s indicative of the big changes that are happening at the global furniture and accessories manufacturer/importer.

New listing

For starters, the six-year-old company has decided to leave the American Stock Exchange, where Decorize stock has traded since March 2002. Shares (AMEX: DCZ) will begin trading on Nasdaq’s Over the Counter Bulletin Board in the next 30 days.

“The AMEX cost us about $350,000 a year in extra fees,” Crowder said. “You have to ask, ‘Is that a good return to our shareholders at this point?’ The board said no.”

Crowder added that there are still fees involved in being an OTC company, but the amount is significantly less; he said the annual savings should be in six digits.

He added that he expects the change will be only temporary – probably lasting about two years, long enough for the company to build to a size more suitable for public offering on the AMEX.

Financial numbers are still not where company officials would like them to be, but they are improving.

Net income suffered an $80,000 loss in the third quarter of fiscal 2006, ended in March. And the fourth quarter, ended in June, showed a $700,000 loss. While still in the red, those numbers are 91 percent and 42 percent, respectively, better than the same periods from the previous year.

Crowder attributes the improvement to increases of 50 percent to 80 percent in sales to independent furniture retailers, which he called the core of Decorize’s business.

Overall revenues for the third and fourth quarters of fiscal year 2006 were up 21 and 15 percent, respectively, compared to the previous year.

New outlook

Decorize also has changed the way its design team operates.

Crowder said the implementation of focus groups has reduced costs by allowing the company to focus exclusively on making and distributing products that customers want to buy.

“Typically in this industry, the designers go out and design, and they come up with an idea that they hope the dogs will eat,” he said. “What we’ve done is said let’s go ask the marketplace, before we introduce a product, where we should go.”

Nine out of 10 new products the company makes now sell, Crowder added; when he first started the number was closer to five out of 10.

New deals are around the corner. The company will launch a new offering in October with a case goods manufacturer that Crowder said he couldn’t name yet. The deal will take the company’s products into more than 800 Thomasville, Broyhill and Lane furniture galleries nationwide.

Bass Pro Shops will carry Decorize products in its catalogs and stores in the next 60 days, and a 200 test-store program for Wal-Mart also is in the works.

Decorize already supplies Neiman Marcus, Home Depot, Target and Costco Web sites and catalogs.

Much of the increased demand is being met through the company’s year-old manufacturing plant in Indonesia; Crowder said that factory employs 250 people and ships 25 furniture containers monthly – three to four times the average for Indonesian plants.

Indonesian production

Quest Capital Alliance, which has provided $2.75 million in debt and equity funding to Decorize since 2004 including a $750,000 infusion earlier this month, installed Crowder as Decorize CEO in early 2004. Crowder previously served as vice president of Springfield Remanufacturing Corp.

Quest co-founder and SRC President Jack Stack said he is amazed by the production of the Indonesian facility.

“When you go home and your house is slanted, and the four legs of your chair aren’t equal, it’s hard to go into a manufacturing facility and realize the importance of good quality,” Stack said of the Indonesian workers. “They’re in the game – they’re training them well, and the quality is good.”

Workers in the Indonesian plant, like all Decorize employees, are operating under Stack’s open-book management system, The Great Game of Business.

Stack added that the company is on the verge of a breakout.

“This is a company that is poised to make significant money, and not just in speculation,” he said. “They had to change the supply chain – some products weren’t being delivered on time and the quality wasn’t there – but they’ve gotten on that and done a great job.”