For founder, President and CEO Steve Bell, the Great Recession slammed the Bellmont Cabinet Co. as if it was the Great Depression.
Revenue fell 60 percent. The employee count dropped from more than 200 to 90 amid layoffs that included some senior managers.
“They were pretty desperate times,” Bell said last week, sitting with John Brush, his director of marketing, and Chief Financial Officer Nick Johnson, at Bellmont’s manufacturing center and headquarters in Sumner.
“In November 2008, someone turned the faucet off,” Bell said.
At the end of 2009, Bell asked himself, “What if this is as good as it gets?”
Then, in 2010, sales were worse.
In 2011, sales were worse than they were in 2010.
Thousands of cabinet shops nationwide closed.
Bell had experienced the Recession of 1982, Black Monday in 1987, the dot-com bust of 1999 and the market collapse after Sept. 11, 2001.
“I’m 60 years old,” Bell said. “This was by far worse than anything I’d been through. We couldn’t cut our way to profitability. We’d gone from $30 million to $14 million in sales.”
“This industry changed,” Brush said.
“I have a deep and abiding faith,” Bell said. “We just asked for guidance. This was a structural change. We didn’t know how to do this.”
Actually, he did know, and now Bellmont has rejoined the Major Employers List as compiled by the Economic Development Board for Tacoma-Pierce County. The company ranks at No. 98 under its corporate identity of Pacific Crest Industries.
Bell decided to stake Bellmont’s future on an idea.
“My wife and I own 90 percent of the company,” he said. “The recession stripped our finances. My wife and I cashed in everything we had. When you have no option but to fight, you fight. You do what you can to survive, but we didn’t just want to survive. We wanted to win.”
Bell knew risk, perhaps too well.
“Everything I’ve done has always been risky, putting everything on one spin of the wheel. That’s the great thing about life – you always get a second chance.”
He began as a commercial diver, then went into the remodeling trade in South King County. The cabinet industry beckoned.
He recalled, “It was a big risk to drop the remodeling part, and put it all into manufacturing.”
He manufactured “frameless” cabinets, which are popular in Canada and Europe but which occupy only a small percentage of the U.S. market. Frameless cabinets contain a larger cabinet box, and proponents say they offer full access to openings, wider drawers and unobstructed access to the cabinet interior. The difference is seen particularly in the method of manufacturing, and frameless cabinets can accommodate softer woods and less expensive materials than the typical hardwood cabinets produced in framed construction.
Bell was an early frameless fan. His business grew and he specialized in sales to smaller mom-and-pop dealers and cabinet shops. He established a relationship with the Eagle Hardware chain, which led to his cabinets being offered in 40 stores.
Eagle sold to another hardware chain, and Bell remained a supplier for seven years.
By 2007, he calculated that the relationship had lost steam, and his business continued to grow.
In 1995 he moved to Kent’s West Hill. An original manufacturing space of 22,000 square feet grew to 32,000, and eventually to 60,000.
He soon moved south to an industrial park in Sumner. “It was a breath of fresh air,” he said.
The new location was closer to his Pierce County workforce and offered better freeway access. There also was a nice view of Mount Rainier. Hence a new name. There was nothing particularly special in the company’s corporate identity, Pacific Crest. Bell wanted something that would be different, and Pacific Crest was replaced by Bellmont, a name that comprises Bell and nods to the mountain.
Things went well, until they didn’t.
THE CRUSH, THE CRASH, THE RENOVATION
Including temporary employees, Bellmont could count more than 200 workers in the fall of 2008. That’s when the faucet went dry.
“We had a contingency plan for a 10 percent reduction, for a 40 percent drop in sales,” CFO Johnson said.
“We didn’t have a plan for 60 percent,” Bell said.
During 2009, employment fell to some 90 workers. People stopped ordering for their new condominiums. The cabinet business fell as the construction industry collapsed and as the real estate market died.
Bell recognized that Bellmont could cease to exist, or his team could come up with something new.
“We wanted to find a segment where no one else was a dominant player. A few big guys had 50 percent of the market. The Chinese were ferocious. We couldn’t compete. We had to introduce something different.”
Marketing director John Brush had been conducting his own research project. His data showed that baby boomers had fueled the previous boom in cabinetry. Now, there was a new generation – or, more precisely, two generations: X and Y.
Bellmont introduced a high-end yet affordable cabinet line. It was something modern, cool, sleek, individual.
“The new generation, it didn’t want their mother’s kitchen,” Bell said. “The bottom line, it worked.”
“We put everything on one spin of the wheel,” he said.
Sales rose. Dealers gave thanks.
Bell figures he has a nine-month lead on competitors, but those competitors have noticed his success.
“They’re coming after us,” he said.
“We came off four very difficult years,” Bell said. “We’re a family business. We want to see if we can build this thing back.”
And it’s not just the money, or the pride. The company is helping the people in a village in El Salvador, Bell said. And there’s a medical clinic in Congo, a youth camp in Eastern Europe and transitional housing projects here at home.
He said the past four years “have been the trial of my life.”
“It’s hard to differentiate yourself,” he said. “It used to be a matter of build it right and ship it on time. That used to be the secret of success. Now, that just lets you play in the game. You have to have something beyond that, and we’ve got a long way to go.”
It seems that bet is beginning to pay off. Sales are up, from a recession low of $14 million.
“I think we can build this thing to $100 million,” Bell said.C.R. Roberts: 253-597-8535 email@example.com