Decorize sends administrative jobs overseas

In hopes of making the wholesale home decor company more efficient and creating higher-paying sales positions, Decorize Inc. has moved as many as 10 Springfield-based administrative jobs to its operations in Indonesia and China.
Decorize President and CEO Steve Crowder said the layoffs complete a transitional period.
“Part of our plan is to continue to consolidate some of our functions overseas,” said Crowder, who left a Springfield Remanufacturing Corp. executive vice president position in January 2004 to turn Decorize around. “We closed our domestic production a year ago and as part of that movement, we’ve moved some additional jobs over to our factories in Indonesia and China.”
Efficiencies eventually will be seen in the bottom line, Crowder said, “but it wasn’t like we can take this job from here and save 20 percent if you move it overseas.”
It typically takes 18 months to two years to turn a business around, he said, adding that Decorize’s staff of 25 has improved the company’s production, gross margin, quality and price. Product returns, for example, have decreased from 17 percent to 4 percent in the last 12 months, he said. And cost of goods sold decreased 23.1 percent in the three months ending Dec. 31, compared to the same period in 2003.
“If we would have gone out and said, ‘Let’s grow the business like crazy here and sign up a bunch of new customers’ before you had the infrastructure fixed, it would have been the same problem the company was in before we made the investment,” Crowder said. “It was great to grow the top line and it looked impressive, but at the end of the day, if the customers weren’t happy, they weren’t going to be your customers very long.”
Decorize borrowed $250,000 Oct. 5 from SRC Holdings Corp. for working capital. SRC, which sent Crowder to rescue Decorize, also spent $500,000 on a preferred stock purchase in 2004.
Other capital infusions came from Quest Capital’s $225,000 stock purchase in January 2002 and a $500,000 private fund placement in November 2002.

Jobs lost, created
Crowder declined to disclose how many workers will take over the administrative duties that were performed locally. But he said it makes sense for the duties to be performed where the products are packed and shipped, rather than shuffling paperwork between China and Springfield.
Even after cutting the positions, Crowder insists Decorize places a priority on creating opportunities.
“We are trying to create jobs on the sales side. That is our growth area, and we are not taking jobs away from the United States. We’re trying to move them into higher paying positions,” he said, adding that the phased-out jobs paid around $30,000 a year.
A sales job with the company, he said, typically pays $70,000 to $100,000 a year.
Decorize Inc. reported revenues of $12 million for the year ending June 30. Revenues for fiscal year 2003 were $15.4 million.
Decorize reported a net loss of $300,000 for the three months ending Dec. 31, compared to a loss of $1.2 million for the same quarter in 2003.
Clients include La-Z-Boy, Federated-May, Rooms To Go and Neiman Marcus. The company’s stock (AMEX: DCZ) closed April 6 at 48 cents per share, much closer to its 52-week low of 40 cents per share than to the high, $1.19 per share. As of Jan. 14, there were 13,166,735 shares of Decorize common stock outstanding.
Outsourcing
Not all businesspeople agree that outsourcing jobs is the way to go. George Freeman, executive director of Springfield’s Best Locally Owned Companies, a not-for-profit organization with 65 members, said it has the potential to damage local economies.
“Every time you send a job overseas you may save in one way, but you hurt the community in several other ways,” Freeman said. “You take away jobs. You take away the tax base … that does everything from make our schools better to supporting our infrastructure, to buying the very products that you’re having manufactured overseas.”
In most industries, Crowder said, people realize there has to be a balance between global outsourcing vs. domestic production.
“If you’re going to stay competitive there’s certain things you’re going to have to do to compete in your marketplace,” he said.
“You can’t put walls around the United States. You’d better figure out how to work your company in a global economy and improve the infrastructure in these countries, and not look at it as, ‘Oh, gosh. I’m losing all these jobs.’ I’m not losing jobs. I’m creating jobs,” Crowder said. “Hopefully, as your business grows you’re creating jobs globally, not just one place or another.”
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