FDM Article

Taken from the April 2004 issue of FDM.

Frameless pioneer expands south

This year’s WMIA Innovator of the Year award winner shares details on its startup operation in Statesville, N.C.

by Stephanie Steenbergen
ssteenbergen@chartcomm.com

James Lestorti, chairman and CEO of LesCare Kitchens Inc., is a man in the process of turning a sow’s ear into a very fine silk purse.

Lestorti and his company won WMIA’s Innovator of the Year award for its decision to buy a defunct casegoods factory in Statesville, N.C., and turn it into a state-of-the-art frameless cabinet manufacturing facility.

In 2002, Lestorti purchased a 310,000-square-foot building that was once a factory for an office furniture manufacturer forced to downsize. He spent more than $3 million to upgrade and renovate the facility. He also purchased more than $18 million worth of panel processing and flatline finishing equipment.

After being operational for only 18 months, LesCare’s new 120-employee Statesville operation finishes 1,000 doors and produces 700 cabinets in one shift per day. LesCare will soon add more shifts. According to Lestorti, the new plant is only operating at one-tenth of its capacity.

LesCare is based in Waterbury, Conn., with another plant in Southington, Conn. Lestorti’s father started the firm in 1945 as a custom millwork company. Over the years, it has grown into a $110 million kitchen and bath cabinet manufacturer with 585 employees.

Why did LesCare win?

Lestorti offers an interesting explanation of why he thinks LesCare won the WMIA Innovator of the Year award.

“Speed to market is probably the key ingredient,” he says. “That speed to market was created by the high-tech equipment and the level of management that was brought in here. We’ve brought in people with tremendous backgrounds.”

The new high-tech equipment Lestorti refers to includes a Holzma beam saw, three Weeke BCH 550 machining centers, a Homag combination double-end tenoner and edgebander, a Koch drill and dowel machine, four Quickwood Pro 1400 finish and sealer sanders, four Sorbini panel cleaners and what Lestorti describes as the largest installation of state-of-the-art Cefla finishing equipment in North America.

This new equipment enables LesCare to produce stock cabinetry in a week, semi-custom product in 15 to 20 days and high-end custom cabinetry in four to six weeks. “Nobody really does that in the industry,” says Lestorti.

LesCare is believed to be the largest manufacturer of frameless cabinetry in North America. It produces an entry, a mid-range and a high-end level of cabinetry. Most of the production at the Statesville facility is entry level, with some mid-range cabinetry.

Another reason Lestorti thinks his company won the award is “We’ve taken a product that was very mundane, gave it some new spirit, color, glazes and quick turnaround delivery time.” He also credits his company’s ability to bring cherry into its low-end line as another reason for winning the award.

The cabinetry in the Statesville facility is made mostly of melamine particleboard from Uniboard GVK. LesCare outsources the doors from Appalachian Wood Products and Conestoga. The doors are finished on LesCare’s Cefla finishing line. The company plans to add more shifts and bring door finishing for all three plants to the Statesville facility.

LesCare has $4 million worth of doors in inventory at all times. The company stocks 100 sizes in three species (oak, maple and cherry) and in four configurations. Lestorti sees this as key to his ability to turn around kitchens quickly.

Refreshing decision

In an era when an increasing number of furniture manufacturers are looking to China to lower costs, Lestorti’s decision to look to North Carolina is both refreshing and encouraging. It’s also an economic shot in the arm that North Carolina’s economy needs.

Lestorti and his brother Louis, who is president and CFO of LesCare, looked to North Carolina when they wanted to expand operations at their Waterbury and Southington, Conn., plants. A glut of empty furniture plants, along with a host of eager county development directors who courted LesCare, made the decision of where to locate in North Carolina a difficult one.

Why Statesville?

Lestorti looked at more than 40 plants throughout North Carolina before settling on the Statesville facility. He chose Statesville for two reasons. “First, it is close to Charlotte,” he says.

LesCare hosts a relatively large number of people throughout the year, says Lestorti. He needs to be near a large town with an airport, hotels and restaurants.

Lestorti’s other reason for choosing Statesville is its high unemployment rate. He says Statesville has a “very cooperative” development manager, Jeff McKay. “He was the most proactive of all the developers I talked to in all the different counties.”

The LesCare facilty is located near the intersection of highways 77 and 40. “Those are good gateways for shipping out of here,” says Lestorti. The plant is also located on 30 acres of land — enough for future expansion.

This happy story of a furniture factory revival did not come without its fair share of frustration for Lestorti.

“We thought we were going to open up a plant in the middle of the furniture capital of the world and people were going to come running through the door and be qualified to make product, and that’s not so,” says Lestorti.

He says making casegoods and home furnishings is a whole different ball game from producing frameless kitchen cabinets. “That’s been a big misconception about this area — that they’re rich in the craft of furniture building. The fine art of cabinetmaking is a lot more in depth than furniture manufacturing on a production basis,” says Lestorti.

Lestorti says he was initially disappointed. But, “if I went here or somewhere else, in startup operations you always face some adversity. That’s the challenge of business. I feel as though what we’ve done here, in a very short time, is far superior to what some people strive to do for years in their companies.”

Although the lack of skilled cabinet craftsmen frustrated Lestorti, he’s found that doing business in North Carolina is a boon to LesCare’s bottom line.

The company saved money mainly in municipal taxes, says Lestorti. His smallest facility in Connecticut has a $300,000 annual municipal tax bill. In Statesville, a building more than three times the size has an annual municipal tax bill of $23,000, which was “washed away” by tax abatement programs.

Initial disappointment

Lestorti says LesCare could never build entry-level cabinets in Connecticut because of high taxes, the high cost of labor and the lack of a proper facility. “You can never buy property for this dollar amount per square foot in Connecticut,” he says.

Buildings up north cost more than $60 per square foot. In North Carolina they sell for $8 to $10 per square foot.

Despite some initial setbacks in Statesville, Lestorti has an excitement for the future of the Statesville plant so big it’s almost contagious. “This is a whole other opportunity for us,” he says. “As I look at it, the company has an open field in front of it. There is nobody really challenging us in product quality and design in this price point.”

Lestorti plans to continue building mid-range and high-end custom cabinetry in Connecticut. But, “there’s only so much custom you can produce.”

LesCare can establish a whole new marketplace for itself by producing high-quality, entry-level cabinetry, says Lestorti. “And that’s where I think the growth is going to be. I see a lot of the future of the company infused into this area (Statesville) because it does bring a lot more rapid growth through volume.

“But I’m still putting a quality product out there in the marketplace,” continues Lestorti. “See, at this price point there are no quality products. This product is head and shoulders above anything anywhere near its price point. Anything close to what this is should be 20 to 25 percent more. However, through new technology, we have been able to develop this product line here and still make money on it.”