Quiet Canac grows cabinet dealer network

Home Channel News, Nov 9, 1998 by R. Michelle Breyer

Four years ago, Leander, Texas-based Cabinets Deluxe was searching for a line of finished cabinets that could work well within both apartment units and million-dollar homes, as well as accommodate the company's explosive growth. The custom-cabinet company's executives considered close to 20 lines, and decided on Canac after a company manager flew to Austin, Texas, in a private jet, and went with the Cabinets Deluxe owners to Houston to investigate the market's potential.

"We wanted to provide a line of cabinets that would go from the low to the high end." said Mark Moore. general manager and a minority owner of Cabinets Deluxe. "We want to be a single-source supplier."

Canada's top cabinet maker, Canac has kept a relatively low profile in the United States since entering the market a decade ago. But since Kohler Co. bought Canac three years ago, the company has begun an aggressive campaign to gain U.S. market share. On Nov. 18, Canac Kitchens will open a new showroom near Kohler headquarters in Kohler, Wis. The new store is a powerful statement that this company means business.

In addition to 56 Canadian dealers, Canac now has 58 in the United States and three in the United Kingdom, the Bahamas and Venezuela, respectively; around 20 percent are company-owned showrooms. Canac, which offers exclusive territories to its dealers, does have several open regions, including the Northwest, Wyoming, Montana, Massachusetts, New Jersey and Oklahoma.

The line has been carried only in specialty stores. Home centers have been excluded, since they usually carry a broad merchandise mix, and Canac dealers must be willing to carry the Canac brand exclusively, said Rob Ribarik, Canac's associate support manager.

"We want to make sure there's no conflict of interest," Ribarik said. "We don't have to worry about them dividing their energy among different cabinet companies."

Although cabinet displays come fitted with Kohler products, the associates are not required to sell the Kohler plumbing brand exclusively, Ribarik said. Canac associates pay no fee, but they must have a showroom to properly represent the product in the market, he said. They also have to establish a line of credit and meet sales targets.

Based in Thornhill in central Ontario, Canac started in 1966, and has grown into one of the largest kitchen manufacturers in North America, with 1997 sales of $80 million. Canac currently sells 50 styles, from the affordable Regal line to the upscale Cellini line.

Store managers learn about product and receive computer software training at a two-week training program at Canac's Canadian headquarters. The company's program helps them to easily design, price and order kitchen cabinets. Dealers also gain co-op advertising support in national trade and consumer publications, said Ribarik.

Cabinets Deluxe has the exclusive right to sell Canac in the Austin, Houston and South Texas markets. The line has helped the company grow from less than $500,000 a year in sales a decade ago to an estimate(l $8 million this year, of which $3 million will he in Canac cabinetry. Last year, sales rose 20 percent.

Cabinets Deluxe was started 13 years ago with a $250 investment by Dale Baxter, a former chicken farmer who learned the woodworking trade. He originally built cabinets in the back of a tractor trailer and delivered them in an old school bus. For years. the company was content to make its own cabinets, gaining a reputation throughout Central Texas through word of mouth.

But with explosive growth came the need to find a line of pre-finished cabinets. Like many companies in the Central Texas building industry, Cabinets Deluxe has reaped the benefits of a six-year boom.

It installed cabinets in more than 1,200 homes last year, excluding its apartment and commercial jobs. The company now employs between 60 and 100 people. depending upon the season.

The company's jobs range from less than $1 1,000 to more than $40,000, averaging $3,000. Cabinets Deluxe has a pro-oriented showroom and warehouse in Houston, and a retail-focused, 20,000-square-foot showroom in Austin, in which it is paired with local firm McNair's Appliance.

Moore believes the association with Canac will provide Cabinets Deluxe with a competitive advantage in a market with more than 200 cabinet shops.

"Some of these other places sell a framed product, a cookie-cutter type of cabinet that you've seen around for 50 years, Moore said. "Canac has a distinctive appearance that diffierentiates us.

More builders are demanding finished cal lets, he noted.

"Over the next five years. we're going to have to rely more on manufacturers like Canac and less on our custom product," Moore said. "As the product from the manufacturers gets better and better, competes more with custom cabinets than it ever used to.