The closing of one of Western New York's newest Canadian employers, Dubarry Furniture Co. Inc. in Medina, was the result of management problems and should not discourage other Canadian companies from coming to the region, according to industry observers.
Dubarry Furniture, the largest Canadian employer to move to the Niagara Frontier last year, closed on Jan. 18, laying off about 40 workers. The former Toronto-based enterprise had received substantial loans from local banks and state agencies.
The closure came just 3 1/2 weeks after company president Les Zuckerman asked the Greater Buffalo Chamber of Commerce to create a $114,000 economic development job for him in Toronto.
"I honestly feel that they (Dubarry's owners) were using the wrong approach," said Lee Burghardt, general manager of Braemore Convertibles Inc., another Canadian furniture company located in Medina. He said executives of Dubarry Furniture should not have shut down their Toronto factory until they were sure the American facility was viable.
Zuckerman, who could not be reached for comment, has blamed his company's downfall on the lack of employees skilled in sewing.
Burghardt disagreed, saying he is pleased with the 20 people who work in his factory and plans to double the work force within the next two or three months. Braemore Convertibles began making love seats, sofas and sofa beds last August in a 70,000-square-foot factory on East Avenue next to Dubarry Furniture.
Burghardt speculated that if Dubarry Furniture had boosted its pay scale beyond minimum wage, it might have attracted skilled laborers. He also said it takes about 26 weeks to fully train employees -- a time frame that Dubarry couldn't afford to use because of its financial constraints.
Several employees of Dubarry Furniture applied for jobs with Braemore Convertibles, but Burghardt said he didn't hire any of them because he didn't want to sabotage the neighboring company.
Dubarry Furniture was operating out of a three-story 100,000-square-foot factory, which formerly was owned by the S.A. Cook and Co., a furniture maker and retailer.
Marine Midland Bank took control of Dubarry Furniture's physical assets after the company's executives notified some of their creditors they would be going out of business, said Judith A. Nolan, a bank spokeswoman. The bank loaned the furniture maker more than $200,000 as part of a $425,000 financing package. The Canadian manufacturer also received $170,000 from the state Job Development Authority.
JDA President Robert T. Dormer characterized the Dubarry Furniture case as unusual. He said executives never told the JDA of the company's impending closure. Zuckerman, who until recently had a high faulty strategy
profile, projected earlier that his business would employ 76 people.
"I question the management of the company and their commitment," said Dora T. Kukuliatas, manager of Canadian Business Development for the Greater Buffalo Chamber of Commerce.
"This is a signal that it's not that easy" to move a Canadian company to the United States, she said. "It requires time and effort. They (company's management) better make sure the person spearheading the operation is really committed and has the wherewithal to follow through."
"I'm not sure Dubarry was doing that," Ms. Kukuliatas added.
Chamber President Kevin Keeley confirmed that Zuckerman asked the organization to employ him as a development officer in southern Ontario. Zuckerman requested a yearly salary of $75,000, an expense account of $15,000 and $24,000 for an office in Toronto, advertising and secretarial services.
"We didn't have any place in our current budget for that kind of position," Keeley said, noting Zuckerman's proposal never got beyond the "talking stage."
Dubarry Furniture was founded in Toronto in 1927 as the Chesterfield Furniture Co. In 1964, Max Magder, an industrial designer from Hamilton, Ont., purchased the company. He developed a system for manufacturing upholstered furniture that could be assembled in parts to save costs in production, transportation and warehousing.