Volume 35, Number 11, November 2000
A Look at the Changes, Outlook and Direction Surrounding the Mirror Industry
by Ellen Giard
It wasnt too long ago that mirror manufacturers had a firm grasp on their product and a clear view of the future. Mirrors, which started out as simple and functional, became a hot trend in decorating when manufacturers added sandblasted and beveled characteristics. But today, despite the ongoing masses of new residential and renovation jobs demanding mirror products, mirror manufacturers are scratching for profits and finding they must take a step back to re-examine their industry.
The Versailles line from Carolina Mirror can add elegance and style to rooms and surroundings.
Then and Now
According to John Matthews, vice president of industrial products for Carolina Mirror in North Wilkesboro, N.C., one of the major issues affecting mirror manufacturers today is the fact that the primary glass manufacturerssuppliers for mirror makersare now making mirror themselves. Ten years ago the companies that make the glass we buy from were not in the mirror business and now they are, said Matthews. Now there is more mirror than we can sell. Plus, with both independent mirror manufacturers and glass manufacturers producing mirror, Matthews said there are two different outlooks on production. Since glass manufacturers run their plants 365 days a year, their philosophy is volume. They have to sell what they make because they are constantly producing glass, said Matthews. On the other hand, the independent mirror manufacturer has more of a value-added philosophy; we dont view it as a commodity product.
Drew Mayberry, president and chief executive officer of Lenoir Mirror in Lenoir, N.C., agreed. There has been a lot of what I call forward- and backward-integration. Forward, because the primary glass manufacturers have taken a more active role in the industry and have become our competition, and backward because several mirror users who used to be customers are now making their own mirror.
With so many players involved in mirror production and with such a volume being made, the mirror industry must also deal with over-capacity. We are about 36 percent over-capacity. And its harder to make a profit now because the margins are so close, Matthews said.
Don Marley, president of Meek Manufacturing of Fort Smith, Ark., has also seen difficulties in making profits that have affected his business. We have seen tremendous increases in material costs as well as surcharges on glass and freight. And there is more competition from the nature of the raw mirror that I buy, he said. If we are going to maintain our profit margins, we have to go back to the manufacturing process for ways to reduce our operating costs.
There are just not any good statistics about the mirror industry right now, Mayberry added. The period from 1997 to 1999 was probably the better part of the decade for mirror manufacturers in terms of profitability. During the remainder of this year and going into 2001, I think the industry is going to be faced with the dynamics [sales, pricing and cost] in place to negatively impact our profits, he said.
The dominant players have also gotten smaller in size and are doing more frame work than stock sheet, said Jim Charles, director of sales and marketing for Binswanger Mirror of Memphis, Tenn. Over the past ten years there has also been a shift from family-owned businesses to more corporate-owned businesses. The private business is diminishing and the big companies are the ones with so many corporate expenses.
Knicks and Scratches
Aside from the increasing competition with glass manufacturers, there are still other daily challenges and issues the mirror industry has to handle, as well. One of the biggest issues the mirror industry faces today, for instance, is finding ways to better promote its product. We are in competition with companies that make other wall coveringswallpaper, tapestries, wood paneling, artwork and those sort of products, said Matthews. To overcome this, we have to find ways to better market mirror and offer other uses for it. The furniture industry, for instance, is using a lot of mirror right now, he added.
The Glass Association of North Americas Mirror Division, formerly the North American Association of Mirror Manufacturers, is also looking at ways to better promote mirror usage. Both Matthews and Mayberry are involved with the mirror division. According to Matthews, some of ideas the division is considering include employing the Internet and in-store displays to promote mirror usage.
In addition to competing with companies that make other wall coverings, competition between mirror manufacturers, both nationally and internationally, is also a major issue. Matthews said that while mirror manufacturers on the East Coast do not see a lot of international competition, a very small portion of manufacturers are losing business to international companies, most of which he says are on the West Coast. Charles agreed, There are far more imports coming in on the West Coast than in the East. It also seems that West Coast prices are a little higher as well.
Likewise, the shipment of products into the United States from other countries is affecting mirror manufacturers here. Imported mirror and glass from countries such as China are affecting mirror manufacturers [in the United States] in two ways, neither of which is positive, Mayberry said. First, mirror and glass parts are being installed in furniture that is being manufactured in the Far East, then packaged and shipped to the United States. Secondly, mirrors produced in China are being shipped to warehouses on the West Coast, then cut and fabricated for those markets. Both activities diminish the market available in the United States. Mayberry continued, This industry is still well under-sold and there is an excess capacity in the United States. Companies on the West Coast are losing business to countries like China and Taiwan because there is so much coming in from overseas that local manufacturers are being
While companies on the West Coast may be directly affected by the increase in international production, Mayberry said that his Southeastern company, though not directly affected, has indirectly seen the effects. A big number of our customers are furniture manufacturers and right now there is such a big portion of furniture being manufactured and fully-assembled overseas and then shipped straight to the customer that we are losing business. In other words, a piece of furniture or home addition that includes mirror, such as a medicine cabinet, is being shipped to the purchaser with the mirror already installed, when, at one point, the mirror would have been installed by U.S. companies.
Importing affects the business, but it will not eliminate it, said Charles. And its probably not going to affect the service portion of the industry, which is probably the biggest factor of the business. (Editors note: Several attempts were made to contact West Coast mirror manufacturers for this article. None responded.)
A lack of product development and innovation is another area where many in the mirror industry say new improvements are necessary. We have allowed ourselves to become somewhat fenced in in terms of new product offerings, which in turn can increase profitability, said Mayberry. Plus, the mirror industry is a mature segment and we need to see more restructuring and focus more on adding value and less on market share.
A Better View
However, there are steps the industry can take to help improve its current situation. Many agree that taking good business steps, such as reviewing how materials are bought, is one way companies can improve their business. Creating, improving and promoting new products as well as mirror itself is another.
Mirror is a very functional product in terms of design and what it can offer. It is a product with a lot of potential, Mayberry said. We probably havent marketed ourselves to our fullest potential.
Marley added, You have got to manage every single cost because youre not going to find your profits in any one aspect. You have to look everywhere in your operation and try to manage better. There simply is no one solution.
Restructuring certain aspects of the industry is one method that may help refocus and direct the mirror industry. There needs to be a couple of rude awakenings, because even with over-capacity we should be able to make money, Matthews said. We just have to look at our costs, and glass and transportation are our highest costs.
Marley agreed, It may just be that we need someone to fall out of the industry.
Investment in Carolina Mirror Co.
By Jessica Landers
In January of this year Sun Capital Partners of Boca Raton, Fla., purchased Carolina Mirror Company of North Wilkesboro, N.C., which had previously been owned by the Cherokee Indian Nation for ten years. Since the purchase, Sun Capital Partners has invested nearly $1 million into new equipment and is formulating plans for additional factory equipment and new manufacturing software for Carolina Mirror.
The infusion of capital into the company by Sun Capital is giving us an opportunity to expand as previously planned, said John Matthews, vice president of industrial sales.
Frank Busam, president of Carolina Mirror also is pleased with the investment. Sun Capital would not have bought this company if they did not think we had potential, Busam said. It [Sun Capital] made a big investment to allow us to further penetrate in the furniture business and capital equipment and thats paying off. There were some rough spots coming out of the acquisition, but we corrected them.
According to Busam, the investment by Sun Capital is also an investment in Carolina Mirrors sales staff, which will lead to an increased penetration of the decorative side of the business.
Carolina Mirror offers vinyl-backed mirrors, glue chip and frosted glass, convex reflectors, edgework, tints, tempered mirrors and transparent or specialty mirrors for use in interior applications, as well as frames, a line of images including art prints and reproductions.