Culp Inc., Not Bound by Tradition

Fabric supplier honors its heritage of success by expanding into new product categories and staying ahead of trends

Iv Culp with Sandy Brown, president of Culp Home Fashions.

Culp Inc. began a new chapter in its long history on Jan. 1. That’s when Iv Culp, the grandson of Robert “Bob” Culp Jr. and son of Rob Culp III, who co-founded the company in 1972, assumed his new role as chief executive officer. That’s also when Sandy Brown, former executive vice president and chief financial officer for Culp Home Fashions, the mattress fabric division of Culp Inc., started her new duties as division president, replacing Iv Culp in that position.

“It is a tremendous honor for me to be the fourth CEO of Culp Inc.,” Iv Culp says. In this new role, he succeeds Frank Saxon, who has assumed the new post of executive chair. “The three CEOs who served before me (Bob Culp Jr., Rob Culp and Saxon) were all amazing leaders and each one took the company to new heights. I have been left with an incredible legacy and the opportunity to move Culp forward. I cannot be more grateful.”

Iv Culp joined Culp Inc. in 1998 and has been a member of the senior leadership team for more than 15 years. He was named president of Culp Home Fashions in 2004. In 2018, he was named chief operating officer of Culp Inc. and, a year later, added the role of Culp Inc. president.

Reflecting on his family’s legacy, Iv Culp says he “grew up around the business, but not in it.”

The late Rob Culp III (left) co-founded the company and served as chief executive officer. His son, Iv Culp, is the company’s current CEO.

“Even after college, I worked for several years in a supporting industry and then went back to graduate school before even considering coming to Culp,” he says. “However, from an early age, I watched my grandfather and father build something so special, so I was always intrigued about officially working for Culp. After all, it’s in my blood.”

A leap of faith

In 1972, at the age of 55, Bob Culp Jr. risked his life savings to start Culp Inc. with his son, Rob. The company began as a fabric converter, buying and reselling upholstery fabric. 

In the late 1970s, the company began manufacturing, opening a printed fabrics plant in Burlington, North Carolina. Culp Inc. acquired several additional facilities during the 1980s, including an upholstery fabrics plant in Graham, North Carolina, from Cannon Mills in 1982, and a finishing plant in Burlington from Dan River in 1983. Then, in 1986, Culp Inc. entered the mattress ticking business, purchasing a plant in Stokesdale, North Carolina, from Fieldcrest. 

Culp Management Team
Culp Inc.’s mattress fabrics division Culp Home Fashions is led by a management team that includes (front row, from left) Jeff Tsacoumangos, Patrick Deschenes, Beth Demm, Christina Pennant, Sandy Brown, Mike Cottonaro, (back row, from left) Steve Bond, Jeff Veach, Randy Sell, Blair Barwick and Pat Rosser.

Over the years, Culp Inc.’s two founders and Howard Dunn — a former colleague of Bob Culp Jr. at Golding Brothers who joined Culp Inc. for its start in 1972 and served in a variety of leadership posts until his retirement as vice chair in 2004 — guided the company as it steadily grew from a small converter into one of the world’s largest marketers of fabrics for bedding and upholstery. Rob Culp took over as CEO from his father in 1981 and served in that capacity until 2007. He also served as board chair from 1990 until his death in 2018. Bob Culp Jr. died in 1991.

“I was fortunate to learn from two great men,” Iv Culp says. “My father and grandfather were both visionaries who left a lasting impact on our industry. The biggest lessons for me came from their unwavering commitment to product innovation and, more importantly, to people. From them, and also from Frank Saxon, I learned to value and respect everyone — our associates, our customers and our vendors. People are what makes companies great and, at Culp, we are richly blessed.”

Family-business mindset

Headquartered in High Point, Culp Inc. now has production and/or sourcing facilities in High Point and Stokesdale, North Carolina; Knoxville, Tennessee; Evansville, Indiana; and five other countries — Canada, China, Haiti, Turkey and Vietnam. The operation in Turkey is a strategic relationship with fabric supplier Boyteks. Culp Inc. employs 650 workers in North Carolina, and a total team of 1,400 worldwide.

Culp Inc.’s plants, several of which have fast-growing cut-and-sew programs, are designed with similar capabilities from country to country, “so we can quickly and efficiently move production within our infrastructure,” Iv Culp says. “This helps us maintain a strong cost structure while also being able to react to changing, unforecasted demand.”

U.S. production continues to play an important role in that mix. “We understand the importance of global cost competitiveness, which is why we operate in six countries,” he says. “But for innovating, prototyping and sudden spikes in demand, it is critical to have redundant, local capacity.”

Offering a diverse range of fabrics produced by these facilities, Culp Inc. serves a customer base of leading bedding, furniture and hospitality companies worldwide. Culp Inc.’s net sales across all its business segments for its 2019 fiscal year, which ended April 28, 2019, were $296.7 million, with mattress fabrics accounting for about half of that total, or $145 million. The other two key business segments are upholstery fabrics (residential, contract and hospitality) and home accessories, which includes eLuxury, the company’s strategic investment in an e-commerce platform. (Scroll for story.)

Although Culp Inc. has been a public company traded on the New York Stock Exchange since 1997, the company works hard to protect its original entrepreneurial culture. “Yes, we are a public company, but we operate like a family business,” Iv Culp says. “We have the best of both worlds: We’re a major manufacturer with global operations, and we possess the personality and customer service of a smaller, private business.” 

That philosophy extends to Culp Inc.’s offshore operations, where facilities operate independently but within the framework of a supportive larger organization with open lines of communication.

A key element in Culp Inc.’s success has been its associates, Iv Culp adds. The company prides itself on the loyalty of its team. “The average tenure at Culp at our corporate executive level is 14-plus years and, overall in the company,  including all of our locations, that figure is more than eight years,” he says. “This continuity has been a critical asset.”

Going global

Culp Inc., like most companies, has faced its share of big challenges over the years. One of the biggest occurred in the late 1990s, when a large share of U.S. upholstery production moved to China. At the time, Culp Inc. was exclusively a domestic producer with no presence or relationships overseas. The company, led at the time by Rob Culp, Dunn and Saxon, responded by sending a team of top executives to the region, including Mike Messer, senior vice president, who was instrumental in helping Culp Inc. establish operations in China. 

Those hard decisions taken two decades ago, “sustained us and drove Culp to be a much better company,” says Brown, who joined Culp Inc. as a part-time associate in 1983 and has held a variety of accounting and financial posts. “They led us to become what we are today, which is a global producer with a robust supply chain that allows us to quickly respond to the needs of our customers.”

Culp Canada Facility
Culp Inc. recently added knit finishing to this Canadian facility and plans to add lamination equipment, enabling the factory to handle every stage of production, from fabric formation to finished goods distribution.

As Iv Culp takes the helm of Culp Inc., the company is approaching the one-year anniversary of what was described in its annual letter to investors in late August as a “tumultuous” fiscal year. In that letter, the company cited the surge in low-priced mattress imports from China and the global uncertainty caused by China tariffs as having a negative impact on fiscal 2019 operating results. Mattress fabric sales were down 24.7% for the fiscal year, primarily due to the high volume of low-priced Chinese mattresses, according to the company. The company’s total net revenues were down 8.4% compared with the previous fiscal year.

“The influx of Chinese mattresses was disruptive to our mattress fabrics business because our customers were greatly impacted,” Iv Culp says. “Our sales level within our fabric facilities slowed during this same time frame. We have seen the industry attempt to stabilize from the anti-dumping measures taken in May of 2019 against Chinese-made mattresses. But we understand that many imports have now moved from China to other countries. Because we have developed such a strong global platform for fabric and covers in Asia, we believe we are well-positioned to capture market share with many imported mattresses going forward.”

To strengthen its ability to serve customers with production capabilities in Vietnam, Culp Inc. is adding fabric production capabilities to its existing cut-and-sew sourcing in that country this year. When completed, the company will be in a position to offer a full range of fabrics and sewn covers produced in Vietnam.

Sewn covers on the rise

One bright spot for Culp Inc. during this disruptive period has been its CLASS program. CLASS, short for Culp-Lava Applied Sewn Solutions, is an initiative Culp Inc. embarked on in 2012 with A. Lava & Son in Chicago, which helps market the program. Led by Vice President Jeff Veach, CLASS provides sewn cover services to bed producers from facilities in Asia, Haiti and the United States. 

Culp Haiti Facility
The Culp-Lava Applied Sewn Solutions plant in Codevi, Haiti, (CLASS International Holdings, CIH) provides sewn mattress covers. CLASS is a joint project of Culp Inc. and A. Lava & Son Co.

“Our platform combines rapid prototyping and project launch capabilities with high-volume, aggressively priced production,” Iv Culp says. “Because we support our cut-and-sew business with world-class fabric manufacturing, we are able to offer a vertical and innovative approach from fabric to cover.”

With its sewn cover program, Culp Inc.’s strategy has been to establish facilities and sources that are prepared to react quickly and efficiently to meet bedding market demands, Brown adds. “The locations we have established for our sewn cover operations come from listening to our customers,” she says. “When you are in the right area, you can meet the customer’s needs in a very cost-effective way that also enables you to use that capacity to its fullest.”

This year, Culp Inc. plans to expand its sewn cover production capabilities in both Asia and Haiti. “Haiti will be expanded with a new building and additional equipment, and Asia is enhanced by growth in China and noted fabric-to-cover expansion in Vietnam,” Iv Culp says. “Our supply chain for sewn covers is unparalleled and offers our customers choices to drive efficient supply without sacrificing speed to market.”

Ongoing investments

In the past few years, Culp Inc. has made several other changes to strengthen its manufacturing footprint. The changes include “incrementally replacing or adding to our fabric formation machinery to remain cost viable and current with technology,” Brown says. In the past five years, Culp Home Fashions has spent $46 million in capital investments. 

Another big step took place in 2017, when Culp Inc. consolidated its High Point knitting operation into its Stokesdale facility. Everything from fabric formation to fabric finishing now takes place in one facility. In preparation for this consolidation, the company also built a new 220,000-square-foot distribution center capable of handling $200 million-plus of Culp Home Fashions sales volume. Last year, it installed a state-of-the-art packaging conveyor system to speed operations at this distribution center.

The company also recently added knit finishing at its facility in Canada to complement existing knit fabric formation, and this year, it will add lamination equipment to the plant. This will make the site a completely integrated, versatile operation that can handle every stage of production, from fabric formation to finished goods distribution, just like the plant in North Carolina, Brown says. She adds that “Canada is a unique country that offers Culp a platform of strategic trade and tariff cost avoidance, especially with the signing of the new U.S.-Mexico-Canada Agreement.” (As of press time, Canada had not yet ratified the agreement.) That ability is especially important in today’s era of ever-shifting tariffs, according to Brown.

This year, Culp Inc. also will invest in new technology and equipment for its CLASS operation in Haiti. The upgrades will include new digital tools for faster prototyping and new project management software.

“Our main focus is on improving the experience for our customers (and enhancing) speed to market through the platform,” Veach says. “The entire team has a continuous improvement mindset — how do we streamline information and communication across the entire platform to reduce costs and exceed expectations? We take pride in the best practice of standardizing processes at each location, including our QMS, IT and manufacturing techniques. The result is the seamless integration the customer wants and expects.” 

New design tools

On the design side, Culp Home Fashions unveiled a digital library at the Winter Las Vegas Market in January containing photos of every SKU in the company’s fabric line.

“This had never been done before at CHF,” Brown says. The new library will enable customers to search easily for fabric options by construction, color, style and other criteria. It also will feature sales history information for easy identification of best-sellers. In addition, Culp Home Fashions has invested in new 3D rendering technology that enables customers to map selected fabrics onto each part of the bed to see instantly how different styles will look on various mattress configurations. It’s marketed as Re.Imagine Culp Home Fashions.

“Our new library will speed our customers’ product development process and give them a more precise way to review options with their own aesthetics and marketing departments, along with (their) customers,” Brown says. She adds that the technology will foster design innovation and also make emerging trends easier to identify.

In the past year, Culp Home Fashions set a goal of becoming a more sought-after source for design ideas. “We will no longer wait for our customers to determine where the market is headed regarding design or construction,” Brown says. “Instead, we will take a more active role in providing design directions and suggestions married to the customer’s specific brand quest.”

Culp Fabric Collage
Heathered grays and charcoals, like some of the wovens and knits shown here, are among the colors Culp Inc. designers expect to be popular for mattress applications this year.

This year, Brown adds, Culp Inc. expects color and fashion to be important elements in mattress fabrics. Heathered gray, charcoal, indigo and metallics are expected to be the dominant colors for 2020.

Culp Inc.’s best-selling fabric collections for bedding continue to feature woven borders and unique lamination techniques. The company also offers a full range of knits and its sewn CLASS covers across a broad spectrum of price points and bed constructions, including those for boxed beds. 

“Boxed bedding growth has had a major impact on our industry,” Iv Culp says. “We are proud that we have reacted to this trend and grown our presence with existing and new customers. Our platform has allowed us to deliver a complete fabric-to-cover package and reach a higher value of finished mattresses. We also appreciate that this trend allows us to be even more innovative and decorative.”  

Across all of its fabric segments, Culp Inc. expects customer demand for performance technology to continue to grow. Cooling features, as always, will remain important, but “the consumer is moving beyond cooling and looking for other attributes, such as sustainability and rejuvenation,” Brown says. 

“Consumer bedding preferences, particularly among the younger demographic, are leaning toward athletic performance looks that are popular in sportswear and exercise apparel,” she says. “They expect the outcome with sleep to be similar to that of exercise.”  

At the same time, “the same consumer consciously wants products to be sustainable and environmentally healthy, so we are doing more with incorporating recycled yarns in products. And, for some, luxury looks also are alluring,” Brown says. “As a result, our creative, marketing and innovation staff are focused on all of these points as they develop new fabrics for our customers.”

Culp Inc. also is striving to make its own production processes more sustainable. Recently, it worked with ICE Recycling to establish its Stokesdale facility as landfill-free, “meaning that no waste stream from operations at that facility is going in any landfill,” Brown says.

As Mike Cottonaro, senior vice president of sales and marketing for Culp Home Fashions, says, “Today’s consumer is healthier and more environmentally conscious and rightfully demands a purchase that is performance driven to align with their lifestyle. We believe the array of innovations, backed by science and data, that Culp is providing today delivers on those desires for this new discerning breed of mattress purchasers.”

Innovation front and center

To foster a spirit of innovation, Culp Home Fashions created a separate innovation team in July 2019. The team features four staff experts in the areas of yarn, finishing treatments and fabric formation whose sole focus is to research, test, produce and drive innovation “that challenges the norms of the industry,” Brown says. 

In addition, the company hired a new creative director, Christina Pennant, who has a background in both home furnishings and apparel. Pennant has worked in a variety of design positions with Ikea, Kohl’s and Abercrombie & Fitch.

“We needed a creative director with no mattress industry experience — someone who would bring a fresh perspective of creative looks stemming from apparel and other interior graphic design experience,” Brown says. “I found what we were looking for in Christina, and she has brought a wealth of background to lead and challenge our creative effort.”

As Culp Inc. moves forward in 2020 and the start of a new decade, there will be an “increased focus on growing our company,” Iv Culp says. “We have a strong balance sheet and we have diversified businesses creating solid profits and cash flows. We will look to grow organically with further emphasis on our innovative styling, and we will continue to consider strategic acquisition opportunities across our various divisions. There is also great opportunity to connect our people and products across bedding, furniture hospitality and eLuxury. Many synergies await us as we innovate and develop new products for any of Culp’s businesses.”  

Iv Culp sees those synergies as one of the company’s key strengths. “We are connecting our products and our customers more and more across bedding, furniture, hospitality and home accessories,” he says. “The more we work together, the more opportunities that arise. We will be less segregated by division and more collaborative in sharing ideas and developments that can be successful in all of our markets.

“While doing all of this, we will always honor our traditions and remember that people make the difference for Culp. We are excited about the next chapter and believe our best days are  yet to come.”

eLuxury Gives Culp Entrée Into E-Commerce

Culp eLuxury Jacquard Pillow
Culp Inc. produces finished products, such as these jacquard pillows, for sale to retailers and consumers through the eLuxury e-commerce platform.

While Culp Inc.’s 2018 majority investment in the eLuxury e-commerce platform has gotten off to a slower-than-expected start in terms of sales growth, Iv Culp, Culp Inc. chief executive officer, says he still sees the strong long-term potential of the investment.

“Our investment in eLuxury is an attempt to understand and participate more in the growing e-commerce space,” Iv Culp says. “Paul Saunders, the CEO of eLuxury, and his team have a strong understanding of the various e-commerce marketplaces, and we believe this is a natural fit for us to expand our accessories offerings. We have learned that there are also many opportunities for new and improved B2B products, enabling us to grow across several channels.”

Culp Inc. expanded into the bedding accessories category in January 2018 with the launch of the Comfort Supply Company by Culp line of mattress pads and protectors at the Las Vegas Market. The line includes both “Made in USA” finished products, as well as globally sourced items from Culp.

Last year, the Comfort Supply Company products were rolled into Culp Inc.’s new Home Accessories division, which also includes eLuxury. Also during 2019, Chadd Coltrain assumed responsibility for Culp’s eLuxury business-to-business accessories business, and the company opened a showroom in Las Vegas as a vehicle for expanding the company’s reach in the retail community.  

“With the support of Paul and Chadd, our internal sales team and many independent reps, we are finding success in diversified channels with eLuxury and with private-label brands,” Iv Culp says about the response to the B2B accessories line. “With Culp’s expansive vertical manufacturing platform, eLuxury is able to offer a speed-to-market alternative for bedding accessory retailers that is unlike anything else that’s available.”

Going forward, direct-to-consumer sales of Culp Inc.’s bedding accessories via the eLuxury site, as well as many new e-commerce channels, also will receive more attention. “We’re still in the early stages of our learning process,” Iv Culp says, “and we are confident in the business model we have developed.”

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