by Macy, Beth
John Bassett thought about those cheap Louis Philippes being unloaded on the docks, and then he thought of Mattress Mack, of all people. Jim “Mack” McIngvale was one of the most successful furniture retailers in the industry, a self-made millionaire in Houston who produced memorable but cheesy television commercials—all the while sporting Sansabelt slacks. Mattress Mack was among the first retailers in the country to guarantee same-day home delivery. So the yuppies could prevent the neighbors from knowing they were buying his low-end goods, he had the idea to deliver his furniture in unmarked trucks.
That was the kind of out-of-the-container thinking John Bassett was after. That was moving the cheese. It was what he was aiming for when he realized the key to competing with the likes of Dalian was to take advantage of China’s biggest disadvantage—the six weeks it takes a container to float across the Pacific. “The Chinese are not superpeople!” he reminded his workers. “They cannot suck the ocean dry!”
So the company would surprise the competition and move with alacrity, Churchill-style: It would adopt a seven-day factory-to-store delivery model called Vaughan Bassett Express, or VBX. Unheard of in the industry, it involved a wholesale change in the way every department operated.
China had swiped the company’s number one asset—its low-cost producer status. “You have to hang your hat on something else,” Wyatt Bassett explained. “If the nature of the Chinese product was cheap but you’re gonna have to wait a long time to get it and it’s gonna be very inconsistent, we became the guy that guaranteed you’re getting it in a week.”
As Wyatt’s brother, Doug Bassett, described it: “If a dresser’s broken on arrival, you can call us up and, in a heavy Southern accent, we’ll [politely arrange to] get it fixed for you. Try getting that from Asia!”
A series of Vaughan-Bassett ads in the trade publication Furniture/Today drove home that point, with a borderline-xenophobic edge. “Meo wente” winked a young Asian businessman who gave the A-OK sign with his fingers.
The caption below translated the phrase: “Nooo problem.”
“Tired of dealing with broken promises and missed delivery dates?” read the kicker at the bottom of the ad. “We deliver as promised, with NO hassles and NO minimums. Vaughan-Bassett Furniture, we mean what we say.”
Unlike the Asians, in other words.
Another ad featured a hulking ship laden with hundreds of containers in the middle of the ocean with the caption: “Sure, we can send that repair part out, just tell us what else to put in the container.”
A two-page ad made fun of the importers’ tendency to deliver all or nothing. On the left-hand side of the page, a buyer stood on the shore looking out on a vast empty ocean; the caption read “No ship.” On the right-hand side, the same buyer stood among hundreds of chaotically stacked containers. “Ohhh ship!” read the caption below.
VBX had gotten the attention of the companies who were already importing heavily—especially the company’s ads, which the importers decried as insults to the Chinese. But the biggest challenge of launching the speed-delivery program was selling it to the employees, particularly the people in the office. The line workers were happy to help double the company’s inventory from $15 million to $30 million to give it more shipping flexibility. More orders meant less short time.
But the credit department, which for decades had taken three to five days to process a new store’s order, was another story. John didn’t exactly threaten to fire the credit manager, but he did relate the story of Mattress Mack telling his own credit and delivery people that they had two weeks to figure out how to cut home-delivery time from a month to a day, and if they couldn’t do it, Mack would find someone who could.
Vaughan-Bassett’s credit manager had the expected reaction when he learned that John wanted the credit on all VBX orders processed not in two weeks but in thirty minutes. He even uttered the forbidden word. “I’m sorry, John, but it can’t be done.”
“Dad taught me, you need to leave the person alone for a little while, let him stew, almost like a grieving process,” Wyatt recalled. “Then you go back and say, ‘Walk me through this, let’s talk about it, let’s figure out the bottlenecks.’ ”
In this case, the bottleneck was eased by a computer program the bosses coaxed out of another department—which simplified the paperwork—and the addition of some temp workers. Deadlines were given and duly noted on the legal pad, and remembering the oft-repeated line of Mr. J.D.—You get what you inspect, not what you expect—employees knew John would personally appear at their desks on deadline day to check.
He coaxed the trucking companies, all independent operators, to move VBX orders to the top of their shipping queues rather than wait their turn at some distribution center in Martinsville or Hickory, as was standard procedure. He did it by giving the truckers something no other furniture factory offered: Vaughan-Bassett, not the individual retailers, would pay the freight fees directly to the trucking companies, and it would do so within a week.
It was more complicated than the panty-hose-money bonuses, but the reasoning was the same: Vaughan-Bassett would, John hoped, ultimately make more money than it paid out.
The biggest hurdle was busting up the bureaucratic logjam—talking dozens of office workers into trying to do something they didn’t believe could be done. It was left to Wyatt to figure out how to manage the expanded $15 million inventory cushion so the company never ran low. The company spent $10 million on warehouses to hold the new inventory, buying a defunct retail-outlet warehouse and three shuttered factories—two apparel and one furniture, all closed because of offshoring. The planning, cajoling, and computer coding took six months.
Three months after that, JBIII rolled the idea out to retailers, who were skeptical. It sounded good on paper, especially to the mom-and-pop operations that couldn’t afford to order by the container. His claim that it reduced the retailers’ financial risk sounded too good to be true too: Stores wouldn’t get stuck holding a bunch of closeout inventory, JBIII said, because a business had to pay for only two pieces—one for the showroom and one for the warehouse. Anything that was needed beyond that could be ordered Monday for delivery by the end of the week.
“So, you really think we cain’t pull it off?” John said, grinning like a cat about to pounce. Then he told them to double-check their invoices. Vaughan-Bassett had already been operating VBX, and for three months.
He’d launched it without notice to give everyone in his office time to work out the kinks—and, of course, for the unbridled glee of telling skeptical dealers, “PS: watch this—we’re already doing it.”
One shipping-department employee had the task of following up on every single order by phone. “She babysat every little aspect of it because she knew, absolutely, that her name was on John’s legal pad,” Antonoff said. “She called so much that finally the dealers said, ‘Stop bugging us!’ ”
Another retailer joked that he’d heard the screech of the truck’s air brakes the moment he hung up the phone after placing his order. Even better, other retailers asked, “What else of yours can I put in my store?”
Back in Galax, John likened the move to General Robert E. Lee’s surprise attack on Chancellorsville. Lee’s army was less than half its usual size and yet, in a bold move that further divided his ranks, Lee sent Stonewall Jackson to attack the Union’s vulnerable right flank in its own camp. The Union, which misread the dusk-time movements as a retreat, never saw the Confederates coming, in a battle that historians regard as Lee’s greatest victory in the Civil War.
Sometimes surprise and cunning trump brute force. Sometimes in business, as in battle, it’s best to go against the grain.
Then again, Stonewall Jackson was mortally wounded at Chancellorsville. And come Gettysburg two months later, the Union delivered a crushing defeat.
John had studied it all at his alma mater, where Lee served as college president after the war. (“He sat right there,” he told me during a 2013 Washington and Lee Univ
ersity visit, pointing to Robert E. Lee’s favorite seat in the campus chapel, to the right of the minister and in the second row.) Civil War buffs consider Lee’s tomb, in the basement of the Lee Chapel, to be a shrine. Some plant Confederate flags outside. Some leave coins and carrots at the grave of Lee’s horse Traveller, whose bones were buried near the general after they’d been bleached and exhibited—and occasionally vandalized by students, who carved their initials in them for good luck.
The carriage house where Traveller was once stabled is now the university president’s garage. Tradition holds that the doors should always be left open so Traveller’s ghost can come and go at will.
Tradition, like soldiers and a few third-generation furniture makers, is hard to stamp out in small Southern towns. In recent times, there was a W&L president who kept the garage doors closed, to protect his car. The joke around Lexington went that Traveller had been reincarnated—as a BMW. And that president didn’t last long.
Bob Merriman was retiring around the time Vaughan-Bassett introduced VBX, the company’s first major return salvo against China’s battle to overtake the American bedroom-furniture market. “John will give you a better speech, but Wyatt has computer programs running out of his ears on every situation, and, unlike John, he’s very patient,” Merriman said. “You’ve got to be sharp as a tack to oversee all those logistics and not lose your ass by ending up with closeouts.”
Wyatt reminds Merriman of Wyatt’s grandfather and namesake, Wyatt Exum, the World War II fighter pilot. Exum had a photographic memory and used to wow Merriman by glancing at a string of boxcars, turning his back, and then reciting all the numbers on the passing train.
The younger Wyatt’s trick? He can calculate algorithms and returns on investments in his head. He remembers figures quoted on supply invoices eight months after he’s seen them. He once casually but breathlessly explained why he’d bought the lowest-priced Honda Acura at the height of the recession: Given that he drives forty thousand miles a year for work, isn’t reimbursed, and, figuring in depreciation and gas, he pays under ten cents a mile.
“He can come across as aloof,” Merriman said, adding that Wyatt’s older brother, Doug, is the friendlier of the two, which was why Doug got tasked with political and media relations. “But Wyatt’s by far the sharpest business brain.”
In 2000, the company imported 9 percent of the goods it sold—or $1.2 million of its pretax profits—mostly bunk beds from Vietnam, chairs from Malaysia, components from Brazil, and some bedroom- and dining-room suites from Taiwanese-owned factories in southern China. Two years earlier, before the furniture wars were in full swing, the company had even permitted Chinese furniture-factory magnate Samuel Kuo to tour its Galax headquarters, and Kuo’s assistant videotaped the entire production line. Kuo, whose Lacquer Craft now owned the Larry Moh–founded Universal, had let Wyatt walk through his Chinese factories, so Vaughan-Bassett responded in kind, though John and his sons insist they didn’t realize Kuo’s people were taping.
The line workers remember it differently. One longtime sanding-room employee recalled being taped as his department dutifully displayed processes that could be replicated in China. “We even taught ’em how to make it,” he told me. “Now, wasn’t that dumb?”
The Kuo taping “changed our entire policy to where we no longer allow people to come into our factory,” Wyatt said.
They weren’t at war—not yet—but they were now in the shoddy Vaughan-Bassett war room contemplating it.
It was under the guise of importing more furniture, in fact, that John sent Wyatt to Dalian in late September 2002. He wanted him to locate the specific factory that made the cheap dresser because, as his friends who grew up along the banks of the Smith River used to say: “You never know how long a snake is till you kill him and stretch him out.”
Wyatt would travel with Rose Maner, an industry friend and Taiwanese native who had married an American finishing-supply-company executive. Globalization had brought the Maners together in 1979. She was a waitress, and she’d served drinks to Jim Maner and his American coworkers from Lilly Industries at a nightclub in the industrial city of Kaohsiung, then the furniture capital of Taiwan. “It was love at first sight,” Rose recalled.
Soon after the two met, Lilly sent Jim back to Taiwan to launch a finishing plant that would help companies, including Larry Moh’s, fine-tune their finishing process. It’s a critical step that stymies many novice manufacturers, requiring as many as sixteen coats of finish on high-end pieces. “The first furniture Larry exported from Taiwan had a red, kind of cheesy-looking finish,” said Frank Tothill, a retired Lilly executive and Jim’s boss at the time.
As American furniture makers flew to check out the possibilities of ordering from the Taiwanese, the fledgling Asian companies flattered them, asking them constantly for advice. Once the Americans became customers, the advice morphed into full-bore instruction, far beyond helping convert inches to centimeters on design sketches. “It just snowballed,” Tothill said. “It wasn’t that the Asians came over to take our business. We went over there, and, before we knew it, we had given it to them.”
It was just as the Vaughan-Bassett line workers had predicted back when they were being videotaped. Finishing companies were setting up plants across Asia to support the new furniture factories, as were glue, fixture, veneer, tooling, carton, and machine companies. They were re-creating a supply chain that had taken the Southern furniture makers decades to develop.
Rose soon had tentacles everywhere in the network. In 1984, she married Jim, who was twenty-four years her senior, and for the next fifteen years, she helped him run factory operations for Lilly in both Taiwan and Dongguan. “Rose was his secretary, and of course she was more fluent than he was, and she’d let him know if somebody was pulling his leg,” Tothill said. “Our competitors were scared to death of her because they knew she could understand everything they were saying and doing.”
The couple’s furniture-manufacturing contacts extended all across Asia, where people in the business still warmly call her lao ban niang—Mandarin for “the boss’s wife.”
Rose not only spoke Mandarin and Taiwanese; she was also fluent in furniture lingo, and perhaps most important for Vaughan-Bassett, she harbored no love for mainland China. She’d grown up under martial law in an era when China bullied Taiwan at every turn, from forcing Taiwanese schoolchildren to eschew their native tongue in favor of Mandarin to blocking the country’s entry into the United Nations.
In the early 1990s, Rose watched as Taiwanese factories of all kinds rushed to China, chasing free land, cheaper labor, and loose environmental regulations. The move displaced many of her Taiwanese furniture-industry friends, including some who’d once worked for Larry Moh.
With her bubbly personality and disarming disposition, Rose was friends with everyone from Larry Moh—she’d dined with him at one of his three homes in Asia, and Jim and Moh were scotch-drinking buddies—to the laborers on the finishing lines.
But widowed unexpectedly in 1999 at the age of forty-four, Rose sank into a deep depression. She bristled when industry friends suggested she get back into the business, maybe even hire herself out to one of the booming plethora of trading-company agencies based in High Point. The agencies provided offshoring advisers, Asia-savvy people who helped American companies figure out how to have their products made in Asia by OEMs—original equipment manufacturers—to sell under the American companies’ brand names.
Jim Maner, she knew, would have hated the idea. He’d called trade agents “glorified taxi drivers” and recoiled at the high commissions they took from both buyers and manufacturers.
In 2002, John and Wyatt Bassett approached Rose for help, and they couldn’t have come at a better time, she told me, using a poster-size map of Asia to describe where they’d sent her. Rose worked as a kind of counteragent—someone who quietly reported to her employers what the agents, American buyers, and Asian factories were up to. She talked to friends about wh
o was doing what, typed up what they said, and e-mailed the reports to Wyatt. She visited factories in Asia as needed. When she had spare time, she even drove to the Galax factory to offer quality-control advice on the finishing lines.
Rose knew people who knew people. And some of those people happened to sell materials to the furniture factories in remote northern China, which was just beginning to boom. Some of the industry insiders even taught the new factories how to set up their finishing lines, just as they had done in Taiwan and, later, in the southern China province of Guangdong.
For the first time in almost three years, Rose was eager, even excited, about something. Attractive, bubbly, and diminutive, she joked to her friends, “I’m with the FBI!”
When Rose and Wyatt ventured into a rapidly industrializing Dalian, a city of six million, their mission was to find the one furniture factory out of dozens that made the cheap Louis Philippe. It was something like Wyatt’s twentieth trip to Asia but his first time in China’s northern region—the Appalachia of China, where new megahighways intersected with pothole-riddled dirt roads.
If they found the factory, they were to learn as much as they could about the place. Quoting Napoleon, John Bassett said he wanted them to know their enemy—his strengths and weaknesses, his intentions and whereabouts.
“Listen, this is the place that could take us all down,” JBIII told Wyatt. “Don’t come home until you find it.”
It was a Mr. Ed moment: a make-or-break situation where there was simply no water in the swamp.
Rose landed in Dalian a day ahead of Wyatt, and the first thing she did was call a Taiwanese friend working in Shanghai.
“Don’t worry, lao ban niang,” he told his old boss’s wife. “I know someone who will take care of everything.”