Furniture Company Case Study: From Negative Cash Flow to Significant Cash Flow in Less than 7 Years with the Work Excellence Method

Sep 1, 2023


Our client, a leading furniture distributor with a 50-year history, offers high-quality, customizable furniture options. With operations across numerous plants within the United States and a diverse product range, they hold a prominent position in the industry. However, their profitability and future growth were under threat, despite a strong market position and a debt-free status.


During a critical period, the company reached out to Work Excellence. While they had no debt and a significant cash reserve of $18 million, they were paradoxically losing $2 million annually. The looming retirement of their long-standing president also signaled a significant leadership transition. A smooth transition and a sustainable strategy to regain profitability became increasingly crucial.


Work Excellence initiated the engagement with a comprehensive organizational assessment. This process was designed to identify the operational inefficiencies and leadership gaps within the client’s organization. The findings facilitated the development of a work improvement plan that emphasized enhancing the front end of the business, including sales, merchandising, and new product development, and improving the supply chain by reducing overall inventory.


Work Excellence collaborated closely with the client’s leadership team, including the retiring president and CFO. When a new CEO was hired, we helped align him with the work improvement plan, ensuring leadership continuity. Our engagement also involved extensive support to teams across all departments and plants including training 40 key personnel, with a focus on consultation and coaching to facilitate the implementation of our proprietary Work Excellence Method.


Tangible Results: Increased Cash, Reduced Inventory, Management Acquisition, and overall Organizational Improvement

The outstanding leadership team, the team’s dedication and hard-work, and the application of the Work Excellence Method led to significant success for our client:

$7 million reduction in inventory in the first Six (6) months: By focusing on supply chain improvements, we facilitated a significant reduction in inventory, optimizing resource utilization without compromising product availability.

Management Acquisition in the first eight (8) months:  Using the cash created by the reduction in inventory, the Company’s leadership (35 team members) successfully acquired the company.  In order to acquire the Company, leadership highly leverage the Company with $50 Million Dollars debt.

Significant increase in cash: Despite an initial annual loss of $2 million, the company experienced a dramatic surge in free cash flows and sold with Zero Debt.  This success underscored the financial effectiveness the leadership team and our methodology.

Development of a product management system: We helped establish a robust product management system, streamlining operations, and enhancing overall efficiency.

More Profitable sales: The implementation of the Work Excellence Method and the Client’s great leadership team also resulted in an increase in the client’s sales profitability.

Leadership Sells and Monetizes their Hard Work:  In less than 7 years after starting our engagement the leadership sold their interest with zero debt.  Importantly, they continued to apply the Work Excellence Method even after our formal engagement ended, underscoring the lasting impact of our methodology.


This case study represents a compelling turnaround story, demonstrating the transformative power of a client’s great leadership team and the Work Excellence Method. Despite facing significant challenges, our client not only reversed their financial losses but also boosted their cash flow significantly. They optimized their resources and fostered a culture of continuous improvement, marking an impressive success story in their industry.  At its core, the company, revitalized by its successful turnaround, continued to pursue a diverse strategy for growth and scaling. Their strategy continues to be a mix of traditional growth avenues and contemporary, innovative channels. The blend ensures they not only retain their market leadership but set new benchmarks for success in the furniture industry.

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