Cecil Saydah sets up new shop in Bluegrass country
October 20, 2003,
The Cecil Saydah Company has uprooted itself after more than 60 years in Los Angeles, moving to a new production headquarters here at a renovated 305,000 square-foot facility.
"We had to come in, and with the cooperation and help from the Somerset-Pulaski County, overhaul this place," Schierholt told HTT during a recent visit.
The original site here was 270,000 square feet. An additional 35,000 square feet of space is currently under construction.
Other structural reparations are still being made, new equipment is being brought in and installed and new employees from the area are currently in training for production of some items, like scatter rugs. The goal is to have the facility fully up and running by Nov. 15, Schierholt said.
It will house not only the company's primary manufacturing and distributing division but also its decorative pillow division — Louisville Saydah — which by May will relocate from its Eminence, KY, site. This site will also include 20 loading docks, a 6,000-square-foot showroom and many offices for managerial and senior staff.
Cecil Saydah will maintain its corporate headquarters in Los Angeles, where 50 staffers that include senior executives and design and marketing staff will remain based, and the company will also maintain there a small portion of its manufacturing and distribution division, comprising about 75 workers, to service West Coast area customers. Schierholt, for one, will continue to be based in Los Angeles but will maintain a "small" office at the Somerset facility, as he expects to make visits at least once a month "to be where the action is," he said.
The company began entertaining plans to relocate its headquarters about 18 months ago upon feeling mounting economic pressures it says were brought on by the government of the state of California.
Schierholt explained that some of the main issues include the rising costs of workman's compensation, energy, rent and insurance.
"By moving to Kentucky, we are saving about $1.5 million annually," Schierholt said. "California put us in a grossly uncompetitive situation. Kentucky returns us to a world of competitiveness. The market changes rapidly, and we're simply restructuring ourselves to remain competitive."
Other advantages include closer proximity to its customers. "Being now in the Midwest corridor, we can get our products anywhere within three days," he continued. "Before, it took us seven to nine days to get to the East Coast."
Schierholt described Cecil Saydah as a "hybrid," combining both manufacturing and sourcing for its lines. The company produces its kitchen textiles, decorative pillows, kitchen rugs and some table linens. The other categories — beach towels, bath products, door mats and some table linens and scatter rugs — are sourced globally from throughout Asia, India, Central America, Brazil, Egypt and parts of Europe.
"We produce 30 percent to 40 percent of our demand for our items and source the remaining 60 percent to 70 percent," Schierholt said.
Staying with the company and relocating to Somerset will be 20 executives and about 40 workers from the manufacturing and distribution division. By May, Schierholt said he expects the Somerset site to employ 30 executives and 175 factory workers. He also projects the number of laborers to increase by 2005 to 250.
Cecil Saydah's core product category is fashion kitchen textiles, which generates $47 million in sales mainly at the mass market level as well as mid-tier and specialty stores. The plan is to maintain its status, which positions the company as one of the top three category suppliers in the United States.
Second largest is its table linens category, part of which coordinates to some kitchen products. Table linens make up $19 million. In third and fourth place are floor coverings — which include scatter rugs and door mats — and beach towels, each of which generate $7 million in sales. Bath products come in at $5 million. And finally, decorative pillows, the newest of the company's categories, stands at $1.25 million — a figure Schierholt said he expects to increase to roughly $15 million over the next three to four years.
Schierholt added that he expects the scatter rug and door mat business to grow to $20 million in the next three to four years, and bath to increase to $12 million in three years.
"We continue to believe there is a place for almost every industry to have some portion of what they do based here in America," Schierholt said. "We can in fact remain competitive by retaining a U.S. manufacturing base while supplementing certain aspects of manufacturing with imported products."