By: Brian Kendall
By: Malcolm Mayhew
Keith Webster was finishing his MBA at TCU’s Neeley School of Business in 2012 and coming out of 18 years in commercial real estate, “really looking for anything else.” A friend put him in touch with the owners of Kisabeth Furniture, a money-losing custom furniture maker in Haltom City founded in 1958 and about to close its doors.
“They were about to shut the doors,” says Webster, 48, a member of the Entrepreneur’s Organization. “They had a key employee pass away, and they had come out of retirement to plug all the holes and gaps.” One of the two owners told Webster he needed an answer by Friday whether he was interested in buying the company. “And this was a Tuesday.”
Sales - $1.2 million when Webster and his business partner/mother, Joy Webster, who’s spent years saving historic buildings in downtown Fort Worth for the oilman and Texas Rangers owner Bob Simpson, bought the company – have zigzagged since. But the trajectory has been up, Webster says. The peak was $1.8 million. Sales were $1.5 million in 2016, but this year, he’s aiming for about $2 million.
Webster bought the business for cash; he declines to say what he’s got in it today. He brought in an employee, Laurel McEuen, from New York to focus on product development and marketing (“Fort Worth is a small community; our mothers knew each other”), produced a catalog, and bought a millshop that expanded capabilities. He leased the Haltom City plant from Kisabeth’s former owners before buying it. Employees, 35 when he bought the company, now number 42.
What he saw in Kisabeth I really liked the history of the company, the qualities of the product. I was really intrigued by the tangible product, something you could be proud of.
Putting a value on the company They were losing money, and we were looking at the assets we were buying. We knew we’d have to throw money at it to turn it around. We’ve got 60 years of product design that came with the company, the existing catalog, the client list, the showroom sample, and the proprietary process. We leased the facility for three years. We want to make sure [the business] was viable.
Due diligence We made a lot of mistakes. We thought we were asking the same questions [of the owners], but when it got down to it, we weren’t talking the same language. They did track their biggest cost, labor, [but] materials costs, that was the biggest surprise going forward. That was attributable to employees and managers having grown up in the business.
Changing the business We really had to rethink how we did things. We really had to refocus on customer service. The new catalog makes things more approachable. The old catalog was a 20-pound binder that was made to sit in the designer room, not to be portable so you could take it to clients. We’ve just come out with a new [easy-to-understand] price list. The manufacturing side was pretty well set up. We didn’t have to tweak it so much.
Reaching out again [The former owners] really relied on their relationships in the design community and weren’t doing a lot of outreach to the younger and upcoming designers. This year, we’ve really beefed up our outreach. We’re doing several trade shows. We just remodeled our office and had a grand opening. We’re hosting events here. We’ve beefed up our catalog. Our new customer service manager came on in August. He talks with the different showrooms, the different designers. And keeps the channels of communication open.
How much bigger the company could be It can be a lot bigger. We’re doing a fraction of what we could be doing. Office is 10 percent of what we should be, hospitality 20-25 percent. Residential, I think we could double.
By: Brian Kendall
By: Malcolm Mayhew