Forte's Stimulating Story
Concurrently, the group asked preferred vendors to step forward and give the best possible deals they could muster as conference specials. The result was that the 95 Forte shareholders participating in the conference issued more than 500 stock and display purchase orders from the vendors in attendance. According to Schnakenberg, of the 58 vendors present, all but two agreed to special terms. “I bet those two are now wondering what they were thinking,” he told me.
“One thing that none of us wants to do today is spend money,” said Schnakenberg. “We’re laying off people and analyzing every expense to save every possible penny we can. The thought of investing in new showroom displays strikes fear in our soul. Yet, that is the very thing we need to be doing. You can’t save your way into growth. Our showrooms have to be the best in the marketplace today to attract the business that’s out there. Equally important is the need to be at our best when the market rebounds.”
Although showroom traffic is suffering like almost every other sector of our industry, Schnakenberg advised, “There are still some people who have money, and they’re still spending it on their own homes, even if they’re not buying other property.” Forte’s directors believe that its stimulus will enable shareholders to make a statement to designers, architects, builders and homeowner customers that their showrooms are the destination of choice to see what is new in decorative plumbing and hardware.
This in-house stimulus plan will take a big bite out of the group’s strategic reserves. On the other hand, those reserves are intended as “rainy day” funds and the current economy qualifies as a deluge. According to Schnakenberg, Forte shareholders responded almost unanimously with approval of the stimulus plan.
On the day I wrote this a somewhat related story crossed my path. It was announced that GE Money, a financial services unit of General Electric, has teamed up with the National Kitchen & Bath Association to offer consumer financing through NKBA members. Like Forte’s initiative, it’s another example of the private sector figuring out ways to deal with the economic crisis.
Time will tell how much good these programs do. Yet even if a dollars-and-cents ROI is undetectable, the feisty attitude expressed by these moves is good for the soul. Think of a boxer coming up off the canvas firing punches. Fighting back inspires the belief that you can take a knockout punch and end up prevailing.
Another interesting angle to these stories is within a larger debate taking place these days about government intervention in our economy. Capitalism has taken some lumps lately, and as a result the closet socialists in our country have gained more credibility than they deserve. (Unlike their European counterparts, U.S. socialists shy away from the label. They prefer the cowardly and intellectually dishonest term “progressives.” We capitalists don’t reject that term even while conceding that our favorite economic system has some sins to atone for.)
The news media and even many business owners are investing a lot of hope and prayer that the federal government’s American Recovery & Restoration Act will bail out our economy. Skepticism abounds, and even ARRA cheerleaders admit it will take many months and maybe years for its stimulus to take full effect.
By the time that happens, I’m betting that small-scale initiatives like those taken by Forte and GE/NKBA - multiplied thousands of times by private sector companies and organizations - will already have figured out creative solutions to turn our economy around. Then the major impact of ARRA is likely to be raging inflation as money pours in to fuel an already heated economy.
But that’s a story for another day. I don’t want to end on a sour note when the Forte and NKBA initiatives have given those of us who still believe in free enterprise a little reason to cheer.