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Prillaman returns as Stanley's CEO
Scheffer resigns position Tuesday
Albert Lee Prillaman
Wednesday, September 24, 2008
By GINNY WRAY - Bulletin Staff Writer
Albert L. Prillaman has been elected chief executive officer by the board of Stanley Furniture Co. Inc., returning to the position he held for 17 years.
Also Tuesday, Jeffrey R. Scheffer resigned as president, chief executive officer and director of the company "to pursue other interests," according to a Stanley release. Prillaman would not comment on Scheffer's plans, and Scheffer could not be reached for comment.
Taking over as president are three executive vice presidents: Douglas I. Payne, finance and administration; R. Glenn Prillaman, sales and marketing; and Stephen A. Bullock, operations. Both Prillaman and Bullock were promoted from senior vice presidents.
"The executives who make up the office of the president are highly qualified to run the business and this will allow me to focus on strategic issues that positively impact creating shareholder value," Albert Prillaman stated in a release. In an interview, he added that he expects the arrangement to continue "as far as I can see."�
"It's not as big a change" as it may seem, Prillaman said of Tuesday's announcement, because of his 39-year association with the company.
Prillaman has been serving as board chairman since April, when the board and Scheffer asked him to return to "take a more active role in strategic matters given the uncertainties facing the furniture industry in the current business environment," Scheffer said at the time.
Prillaman has been with Stanley since 1969. He was president from December 1985 to April 2001 and chief executive officer from December 1985 until December 2002. He also was board chairman from September 1988 until April 2005, when he retired from that spot and became lead director. He held that post until this April when he was asked to return as board chairman, a post he will continue to hold.
On Tuesday, Prillaman would not comment on the reasons behind his return as CEO. He said the company is financially strong, with a strong balance sheet. That is despite a 14.8 percent drop in net sales for the first half of the fiscal year.
The company's youth lines, produced in Robbinsville, N.C., are "doing pretty good," he said. But the dining room and bedroom furniture Stanley produces here are typical of furniture purchases that can be put off for now, he added.
"We will weather the storm well, but more importantly, as we come out of it, we want to be in the top tier of manufacturers in everything - service, how we grow, how we enhance shareholder value," Prillaman said.
"Obviously, no one can predict when an upturn will come in our industry, but it will come. In the meantime, we are focusing on improving our product line and evaluating the ever-changing distribution channels while maintaining our leadership position in delivering quality and service to our customers," he elaborated in the release.
Stanley "is absolutely committed to being a U.S.-based manufacturer and its strategy in the marketplace," he said. That strategy is based on two-thirds of its products being produced domestically and one-third coming from Asia.
However, "we're beginning to see some signs of the bloom coming off the rose in Asia. Their costs are going up, and their competitive advantage is not as large as it once was," he said. "We're working hard to shrink that gap even further."�
"We see opportunities now as we drop the costs of our business and their costs go up" of eventually bringing some production back to the United States, although it probably would not be a dramatic shift and it could be several years off, Prillaman said.
The current economic downturn is worse than the recession of 1981-82, he said. "It has gone on longer and is more complex," he said, adding that 27 years ago, inflation led to high interest rates and a slowdown in housing, which in turn hurt furniture sales.
Now, "all the craziness in the financial world created a global confidence crisis. We've got to rebuild that first," he said.
"When you go through so much excess ... easy money, people getting loans they shouldn't get, being sold products that are misleading in how they're presented, there has to be some pain. There's already been a lot. At least they're focused on how to fix the housing" problem, and that has to happen before the furniture industry can recover, Prillaman added.
He did not specifically endorse the proposed $700 billion Wall Street bailout, saying, "People a lot smarter than me came up with this proposal." But, he added, "At some point in time we have to do something to correct the abuses of the past. Nobody wants a bailout, a free lunch. I think they're trying to wrap this in such a package that is fair to everybody. I'm sure all our wonderful politicians in Washington are going to balance this thing out."�
In the meantime, demand for furniture will continue to be pent up, and the company will continue to do what it can in a downturn, including cutting costs, he said. In July, Stanley announced it was consolidating its North Carolina manufacturing operations from two facilities to one to cut about 350 jobs, eliminating two executive positions and offering a voluntary early retirement incentive for qualified salaried associates. At that time, Stanley had about 1,000 employees in Stanleytown and 330 in Robbinsville.
"It's always painful," Prillaman said. "But in the end you have to protect the enterprise ... and be prepared for the ultimate upturn. People always need furniture. It's a good business to be in. It's not like you're being replaced by an electric car."�
Stanley's stock closed Tuesday at $9.81, up 15 cents per share.