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Posted March 22, 2013 | comments Leave a comment

National Fruit Co. family buys Henkel-Harris

By Sally Voth

Furniture crafters Henkel-Harris will resume operations as soon as next month.

The 67-year-old company ceased operations this winter, but has been bought by shell company A.G. Capital LLC, owned by the Gum family, which also owns National Fruit Co.

"This deal is a little different in that we will be closing in two segments," David Gum, president, CEO and chairman of National Fruit Co., said Friday while inside the factory at 2983 S. Pleasant Valley Road. "Today, we bought all the assets of the company, and later -- not too far down the road -- we will close on the real estate."

Gum has brought in Scott Hovermale, who was the transitional manager when White House Foods was bought by the Gums in 2006, to be the chief restructuring officer.

Henkel-Harris was long family owned and operated, with CEO and President Bill Henkel and his two sons working with the company's 130 employees. Henkel's parents started the high-end furniture company in 1946.

"In our opinion, it's certainly the best quality furniture sold in the world, certainly in the United States," Gum said. "We need to get the plant up and running as soon as possible."

Gum said the plant was headed for liquidation, and it was important to act before that happened.

He said it was hard to see a company that had been in Winchester so long disappear.

"That's kind of what we do, is buy things in distress," Gum said. "That's how we got National Fruit. We've done very well with most of our ventures, so [we] looked at this and we saw the same opportunity. It's a high-quality product that just had some structural issues, some cost issues that will be addressed."

While White House Foods -- National Fruit's brand name -- and Henkel-Harris will be run as two different companies, Gum said overheads will be consolidated where possible.

Manufacturing at the roughly 300,000-square-foot plant shut down at the end of 2012, and finishing work was completed by the end of January, Hovermale said. He said inventory continued to be sold until last month.

Once the deal was announced March 15, it was important for everything to stop, Gum said.

"We hope to be open by April," he said.

Hovermale said as many of the laid-off workers as possible will be rehired.

"It makes sense," he said. "They're craftsmen. Artisans, some people refer to them."

Gum said Henkel-Harris had ramped down operations in the past several years.

"There's a level that we want to get to right away," he said. "It will be our goal to get back to that level. We don't think we will get back to that level in the first year. We believe that this is more of a cost restructuring process than it is a top line adjustment. I don't foresee price changing significantly."

The furniture doesn't come cheap. Last fall, Henkel said the average price for a dining room table is $8,000-$12,000. An executive desk in the factory on Friday had a price of $30,000.

Gum said the furniture is very high-end, quality furniture.

"It's something you pass on from generation to generation," he said. "The company repaired the furniture if you ever needed it. You still see it at estate auctions here."

He said his company has experience in reducing operating costs as revenues drop.

"We're going to go back and stabilize the blue-chip items," Gum said.

Hovermale agreed.

"We're going to do what we do well here," he said. "That's what the customer wants. At some point when it's right, we will explore other options to reach out to other customers that are looking for something different."

Just as is done at White House Foods, a profit-sharing program will be brought into Henkel-Harris. Gum calls it "gain sharing." That is done on a monthly basis, he said.

All employees gather at monthly meetings where the company goes over financials.

"So people take ownership," Gum explained. "This was a family-owned company. It has a lot of the same family culture [as White House Foods]. We are a Christian-based company. We pray every morning. The good Lord has blessed us to make the right changes that we need to make and to be extremely profitable in doing so."

Gum said Bill Henkel has retired and his sons are pursuing "other opportunities."

While he plans to advertise positions, Gum said he's gotten plenty of calls from those looking to be hired. While he wouldn't say whether former employees would be rehired at the same salaries, he said pay would be "competitive."

"As the company prospers, the employees will prosper as well," he said.

When it comes to gain-sharing, employees generally receive 4-percent bonuses each month in a bad year, and 10 percent in good years at White House, Gum said. Hovermale also said Henkel-Harris employees had lost a lot of benefits and were excited at the prospect of getting those restored.

Gum noted, "You can't go anyplace without employees."

He said everyone works hard, adding, "I think we have some of the best people. We don't like turnover."

Contact staff writer Sally Voth at 540-465-5137 ext. 164, or svoth@nvdaily.com


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