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Closet market continues to expand opportunities for wood processors

A high-end market becomes standard

Modern WoodWorking  by Brooke Baldwin

The closet industry segment has been booming for the last several years, and a slowdown doesn't seem imminent. Consumers want to get organized more than ever, and what was once a market for only high-end residential clients is now becoming a more standard one for wood processors to take on.

"The closet industry keeps getting bigger and bigger," says Ken Frye, head of sales for KCD and one of the developers of its closet software. "More and more, it seems like small companies manufacturing closets are becoming bigger companies - they are franchising. It's amazing. We introduced closet software about eight years ago because a few of our customers wanted it. It just wasn't a large market at the time. Now it has turned into 30 percent of our business. The closet industry has blown wide open, and I don't see it ending. More and more wood processors are seeing that the closet market is thriving out there with consumers wanting to get organized. It's also a business they can start up pretty much anywhere."

Scott Norris, consultant for Planit's closet software, agrees that the closet market won't be slowing down or leveling off anytime soon. "The closet market segment is a good niche for wood processors to get into despite the housing slowdown," he says. "A good deal of the closet work is in the remodeling business, and that is always a strong market. I've seen a lot of cabinet shops starting to get into the closet industry. The closet people, however, don't seem to go over to cabinetry. They stick to the knock-down systems."

Norris believes cabinet shops are venturing into the closet market because they're already "in the house" putting in the client's cabinets. It's not exactly an easy transition, however. "It's different construction," he says. "You're not putting a box together in your shop and putting a lot of labor into it in your shop. You're machining it, banding it, sending it out the door and then assembling it in the closet. The resources a wood processor needs to produce closets versus cabinetry in a shop is maybe 25 percent less because there is no assembly or finishing. Most closet material is made up of melamine panels and vinyl doors."
Frye also says a switch from cabinetry to closets is not to be taken lightly. "There are a lot of cabinetmakers who look at closet systems as just cabinetry with sides and dividers," says Frye."That is so far from the truth. The closet industry is very specialized. The way things are approached is differ­ent. A closet manufacturer takes all of the horizontals, such as shelf sizes, and enters everything in as opening sizes and then has the dividers and sides because he is thinking more along the lines of having a 24" shelving unit. The cabi­netmaker looks at it more from a standpoint of it's 24"+ whatever the left and right side is so it would be 25 1/2" for 3/4" material. Once again it's just the way it's approached. Also, all the things that go into closets are unique. We started with just a basic software program but it has grown a lot. We've added wire shelving, shoe shelves, cubby units and combinations of all these different things that made it become a specialty market. A lot of hardware also goes into it to help people store things in a better way."

High-end becomes standard
As the closet market has gained in popularity, builders also have had to adjust their thinking, says Norris. "The builders are becoming more educated about working with closet companies," he says. "They're becoming more educated about what works and what doesn't - where to put the door in the closet, how to put it in, etc., so that they get maximum space and access."

Will a built-out closet ever become standard? "I'm seeing it more in $200,000 and $300,000 houses now," says Norris. "It used to be more in the $800,000 and $900,000 houses where homeowners would spend about $10,000 on a closet. Today it's becoming an option or upgrade on track homes."

Frye is also finding that closet systems are becoming a project that is more affordable. "People are more willing to put their money into the closet end," he notes. "It's like anything else. Once the average person gets an organized closet, it becomes the standard for him. It's not just the high-end residential client, it's the average person, too, who wants a closet system. The whole market is changing, and so now it's a huge market. You can only get so many cabinet jobs out there, but when it comes to closets, every single house is a possible sale. The closet segment has spun off into a lot of other cabinetry for organization - into the office end and also garage storage units, for examples.
"As the standard becomes the melamine, then the higher end wants something different such as exotic woods and nicer finishes. That's how I see the progression. The closet is becoming a room. It's a showplace."