Sam Clar Office Furniture, #2 in the East Bay

The San Francisco Business Times has posted their annual list of The Largest Office Furniture Suppliers in the East Bay, and Sam Clar Office Furniture is ranked #2.

The list covers 2008 revenues, and marks Sam Clar's highest ranking to date. As we wind through what is arguably the most difficult year many of us have ever faced, I wanted to take a moment to recognize and thank my entire team, who worked hard last year, and are working doubly hard (for less) this year.

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More Optimism for Business Owners...

The City Business Journal Network conducted a survey that found Small and Medium Size Business (SMB) owners are more optimistic about the future and their businesses then earlier in the year. The survey found that 52% of the owners polled believed that business will be "a little" or "a lot" better in the next 12 months. This compares to a level of 35% of the owners polled five months prior. The survey is featured in an article available via The San Francisco Business Times (click HERE).

These poll results tie into what we have been seeing locally, which is a small (but steady) increase in activity over the past 30 days.

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Award Winning Seating from Gunlocke

At Neocon 2009, The Gunlocke Company introduced Vili, a new line of flexible seating. Vili which won Gold in the Best of Neocon, can work in the private office as guest seating, or it can be used as a stacking chair (it stacks 5 high).

Vili Chair from Gunlocke

Vili can be specified in Upholstery, Wood, or Polypropylene, and is available in 2 frame colors, 9 plastics, and 13 wood finishes.

Gunlocke is committed to developing sustainable furniture, and Vili is made from high recylced content materials, is available in Low VOC models, and has models that have acheived SCS Gold Certification, as well as SCS Indoor Advantage USGBC LEED EQ4.5 .

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Dominoes Begin to Fall In Commercial Real Estate

Opus West a full service real estate development company with local offices in Pleasanton California, and an independent operating company of the Opus Corporation, has declared bankruptcy (link).

Some of the local projects effected are:

Opus Center San Jose
San Jose, CA

Fremont Tech Center - Phase I
Fremont, CA

So what you may ask... Well, (in a very simplified view) as the Commercial Real Estate market deflated (rapidly) over the past 12 months, some unlucky landlords and developers who had recently purchased their projects (within the previous 18 to 36 months), were stuck holding properties that were suddenly worth significantly less than the values on their books. This meant that even while market rents were crashing, as vacancies were climbing, these landlords could not adjust their rents as rapidly, BECAUSE they had to work with the inflated values that they had sitting on their balance sheets.

As these owners begin to venture into default and/or bankruptcy, these buildings will go back onto the market, and will sell at the current (lower) market price. This will then allow the new landlords to reset rents to the now current (lower) market rate, which means rents will come down.

This will be a painful BUT very necessary process as the market corrects itself.

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Searching for Good News...

In an effort to find the silver lining in the current environment, here is something close to good news:

From CNBC "Stocks Log Best Quarter in a Decade" -

From the New York Times: "S.&P. 500 Stays on Track for a Strong Quarter"

And finally something a bit more local - from the East Bay Economic Development Alliance

THE EAST BAY IN APRIL 2009

> Median home values increased over previous month, continued to post year-over-year declines
>Unemployment fell to 10.1 percent, and job losses slowed compared to previous months

For the full report click (here).

Not all good news, but I'm determine to overlook the current consensus of pessimism and push forward into bluesky!

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Some Help in Calculating LEED Credits

In the past 18 months, nearly 100% of our projects have started out with the client or specifier asking us about the "green" factor of our products. With the desire for LEED (Leadership in Energy and Environmental Design) certification becoming more and more commonplace, being able to quickly and accurately provide answers has become a critical determinant to winning projects.

Within our organization(s), (Sam Clar Office Furniture and The Commercial Services Group), we are fortunate enough to have Rachel Leaverton, a LEED Accredited Professional (AP), on-staff to assist us in navigating the path towards a LEED certified project. In addition to Rachel, we have found that the Gunlocke Company has a great new on-line resource that can also help.

Check out Gunlocke's Green Calculator to quickly find out how Gunlocke's products can help earn LEED credits towards certification.

See How Sustainable Gunlocke's Converge Product Line is with the new Green Calculator

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IPO Market Coming Back To Life?

This is the 2nd time this week that I have heard from "sources" that the IPO market may show signs of coming back to life.

The first indication was from a high-level executive at a high-tech company, who commented that his phone had been ringing lately with offers to jump into some late stage VC funded firms getting prepared to go public.

The second indication comes from Steve Westly (former California State Controller), high tech investor who made his comments in a recent speech (link).

Hopefully where there is smoke - there is fire -- it has been a loooong time since I've seen anything close to good news on the IPO front.

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Costs on Imported Office Furniture Rising?

Very interesting article in Business Week's June 15, 2009 edition titled: China's Eroding Advantage. The article explains that the costs for products imported from China are rising and the price advantage versus domestically produced goods is shrinking.

This shrinking cost advantage may significantly impact the office furniture industry in a number of ways - currently there is an entire industry of "importers", which I define as companies that have their products built in China, shipped (flat-packed in a box) to the U.S., and then sold through distributors (including Sam Clar). These importers (companies like: Cherryman Industries, Office Star, and Mayline) have grown extremely rapidly over the past 5 years, primarily by providing product that was typically 25% to 40% less than comparable products manufactured domestically.

Cherryman Executive Desk

As the cost of imports begin to rise, the downside to imported products (the lack of choice and ability to customize, lack of consistent inventory, and extended lead-times) will begin to offset the shrinking price advantage, as buyers migrate back to domestically produced items.

This trend could then cause a quick negative spiral due to the tremendous capital required to import products (everything is paid in full prior to the order leaving the factory, and importers must carry a tremendous amount of inventory due to the 9-12 weeks it takes to receive an order). Because of these capital requirements (combined with the horrible credit markets in the U.S.) even a small "hiccup" in order flow (and cash-flow) could be catastrophic to some of the import players.

So what does this mean to the Office Furntiure buyer? -- Ultimately it could mean that the days of $99.00 full function ergonomic chairs, and $599 executive veneer desks will disappear, as prices migrate back to where they used to be (in the late 1990's and early 2000's).

When will this take place? Look for cost increases over the next two years, with the squeeze really taking place in about 18 months.

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Networked World

Amazing what you learn when you start looking into all the places your company resides on the internet. Aside from this blog, Sam Clar Office Furniture is listed in 7,310 "other" places.

Some of the highlights:

From Yelp I found out that we had a single (very bad) review from 2 years ago(appears to be someone who would have been better served at Ikea or Scandanavian Designs). I'm thinking perhaps we are not "cool" enough for the Yelp crowd...

From LinkedIn I discovered that we apparently have an office manager for our Indiana office. Which would be fine, except we don't have an Indiana office (we only have one location in Concord Ca.), so apparently someone is posing on-line as one of my employees (while I'm flattered and a bit confused at how we got selected, I have alerted LinkedIn to this issue).

Just for good measure from the general Google listings, I found a review for one my local competitors (who shall remain nameless). This competitor thought it would be a good idea to post an "anonymous" review which slammed us by name, while praising his company. My opinion, life is too short to play that game... (although I also turned it into the on-line "judges" for review and removal).

I like the connectivity of everything these days, just gives us one more thing to try to keep on top of...

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The Real Sam Clar

Indulge me a bit on this one...

My staff and I are always asked "where did the name Sam Clar Office Furniture come from?". So I thought I would take this posting to give the "official" background:

Sam Clar was my Great-Grandfather (my Grandmother's Father). Sam was one of 11 brothers and sisters, and was originally born in Denver Colorado. He moved out west in the early part of the 20th century, ultimately settling in the East Bay Area (Oakland) in the late twenties or early thirties.

To the best of our knowledge, Sam started the business (originally as an equipment and office machine seller) in 1939. He ran the business until 1973 at which time it was purchased by my Father (Jeff Schwartz). My Father retired from day-to-day operations in 1996 at which point "the torch was passed" to me.

Sam Clar and his Great-Grandson John Schwartz in 1972

Sam passed away in 1984, and I was fortunate to have been old enough to know him. He was a charismatic man who spent a lot of his time working with different community organizations and charities in the East Bay. Not a day goes by when my staff and I don't think about the "legacy" we have behind us.

Thanks for your indulgence on this nostalgic post...

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