Tipping Point: Furniture

Bernhardt Furniture Co. has been family-owned since it was founded in Lenoir in 1889. Alex Bernhardt Sr. became president in 1976, then CEO in 1996. The company’s 1,400 employees make household furniture, including product lines licensed from domestic diva Martha Stewart and the Smithsonian Institution.

Through the ’90s, the domestic furniture industry was very robust because the economy was robust. And even though Asia was growing in importance, it had not reached a status to replace significant amounts of what we were able to do, either the quantity or quality, here in North Carolina. But by the year 2000, many new factories had been built in China and had come of age and were mature enough to make better-quality products. Then you hit 2001, and the terrorist attacks put the economy into a tailspin. So you had two things that occurred simultaneously: Demand for furniture dropped after the terrorist attacks, and the supply was skyrocketing because the Chinese were building more and more factories. For us, there was a nearly 20-year buildup to that point. Bernhardt was an early integrator of Asian products. We started in 1982, bringing some products into this country, mixing them with what we manufactured here. There was a recession on then, and demand had dropped off. We had too much supply. So we closed a factory in Troutman, went to Asia and began to source parts to bring into the other factories. By the year 2000, our imports had grown dramatically. We had hired employees to live full time in Asia. And we had decided that it was time to begin a dramatic change of certain product categories. The residential case-goods business — dining-room and bedroom furniture — is the one that lends itself mostly to Asia, and by 2001, Bernhardt was planning to decommission our residential case-goods plants in North Carolina and move that production to Asia. We were importing fully made, fully finished furniture.