The abrupt closure of Wood-Mode added a chaotic and heartbreaking closing chapter to the decades-long saga of a company long considered the gold standard by which custom-cabinet manufacturers were measured.
And while a cloak of uncertainty still lingers over the ultimate fate of the iconic cabinet brand, it’s apparent that the closure was likely the product of multiple factors, among them an evolving industry landscape, changing consumer buying patterns, internal forces and a range of financial challenges likely triggered a decade ago by the recession.
Long known for its product innovation, quality and craftsmanship, Wood-Mode was among the industry pioneers that ushered in the concept of high-end, one-of-a-kind, custom-designed kitchens that revolutionized the way cabinets were manufactured, marketed and sold.
But the same attributes that made Wood-Mode’s cabinetry such a highly regarded staple may also have been among the factors that eventually brought the 77-year-old, privately held company to its knees.
Wood-Mode’s highly customized product mix – with its diverse collection of wood species, sophisticated finishes and unique design elements – has always been, by its very nature, costly and challenging to produce. For that reason alone, the company likely struggled to stay competitive with cabinet suppliers who’ve turned increasingly to automation, relying less and less on the time-consuming, handcrafted artisanship that made Wood-Mode’s product line so special.
Wood-Mode, some have said, may have also adhered too rigidly to its longtime business model, eschewing new-age efficiencies and digital marketing opportunities, while clinging to the belief that designing, pricing and selling kitchens had to be done in the same manner employed for decades.
While loyal Wood-Mode dealers may take exception to that – pointing to continued robust sales – there’s little argument that evolutionary market changes likely had a corrosive impact on the company.
For much of Wood-Mode’s lifespan, for example, the line between “custom” and “stock” cabinetry was distinct and easily identifiable. Wood-Mode made its mark in the custom niche. Semi-custom cabinetry wasn’t a factor at all.
In today’s market, by contrast, the line between stock and custom cabinetry has all but blurred in the eyes of many. Semi-custom cabinetry, with its wide array of “bells and whistles,” has garnered significant market share. For many consumers, semi-custom – and even stock – is good enough. It’s simply not necessary for them to spend extra on custom cabinetry. Many opt instead to allocate resources on countertops, appliances and other products. Still others, working in conjunction with architects and designers, have their cabinetry sourced through local shops. Wood-Mode likely found itself squeezed from both sides.
Wood-Mode, to its credit, attempted to address the shifting cabinet landscape through the introduction, in the ’90s, of its Brookhaven line. But Brookhaven, rather than proving a boon, may well have contributed unwittingly to Wood-Mode’s demise because, ultimately, it forced Wood-Mode into offering free upgrades in order to keep its higher-priced line viable, no doubt adding costs and eroding margins. With Brookhaven as a lower-priced option, the company in many ways was competing with itself in an increasingly competitive, price-sensitive market also being unsettled by a flood of lower-priced imports, particularly from China.
While Wood-Mode targeted a higher-end market niche than that of Chinese-made cabinets, pricing erosion of the kind caused by the imports tends to impact all market segments, shrinking the potential customer base for everyone.
But even with those competitive pressures, a lack of sales apparently wasn’t the primary issue that precipitated Wood-Mode’s seeming demise.
Wood-Mode’s extensive dealer network has long been considered one of the industry’s finest – and, by all accounts, a steady flow of cabinet orders was in the pipeline at the time of closure. Many dealers, blindsided by the shutdown, find it difficult to believe that revenue shortfalls, or even market changes, brought the company down. In their view, there almost had to be other mitigating factors.
But Wood-Mode, like many companies, was doubtless wounded by the recession, its financial challenges resulting in a steady stream of layoffs, salary cuts and various forms of corporate downsizing. An influx of capital was aimed at enabling the company to restructure debt and generate liquidity. A financial turnaround team was also put in place.
But those moves apparently weren’t enough to reverse the downward spiral – and quite possibly may have exacerbated it.
Corporate belt-tightening can often boost short-term financial performance, but it just as often tends to put longer-term pressure on operations, stifling investment in the kind of initiatives that once fueled success. Banks and other lenders demand a return; loans require repayment. Cost-cutting also inevitably tends to weigh on financially stressed companies, sucking the oxygen from them and exacerbating their seemingly inexorable decline. Add to that the ever-rising costs of hardware, components and equipment, and it’s easy to see the corrosive impact all of it might have had on Wood-Mode’s bottom line and ability to meet its obligations.
Then there were likely internal factors.
Wood-Mode doubtless faced generational changes not atypical of companies approaching their 80th year in business. The company’s founding fathers, years ago, passed from the scene. Key executives and one-of-a-kind artisans retired or departed the company, leaving an unfillable void. Wood-Mode, through no fault of its own, likely lost some of the lifeblood and inspirational leadership that once propelled it.
Were mistakes made? Maybe. Could decisions be second-guessed? Perhaps. Might the company have been spared? That’s open to conjecture.
While Wood-Mode may be yet resurrected through acquisition or an injection of capital, time is swiftly running out – if it hasn’t already. All of which, while emotionally wrenching, seems, in light of everything, almost inevitable.
Even the best-run businesses don’t enjoy interminable lifespans. The tide of change is inexorable. Companies come and go. Even iconic brands can fall.
Sadly, for a variety of reasons, Wood-Mode was one of them. ▪