Originally published in Business Digest, August 1997

Cushy Business

by Craig C. Bailey

Riding the wave of an industry that's grown to a billion dollars a year, Mark Binkhorst has expanded his Burlington Futon Co. in 13 years from a one-man operation in a musty cellar to a manufacturing, retailing and wholesaling business with 25 employees. Erase from your mind any preconceived notion about futons' being nothing more than cheap furnishings for college kid flop houses. If the items gracing the firm's Pine Street showroom are any indication, futons have grown up.

"Early futons were very simply cotton mattresses that were rolled up at day and gotten out of the way. The futon today is a different animal," says Binkhorst, explaining how his futons are built to fill the dual function of couch and bed. "Many chiropractors, physical therapists, orthopedic surgeons will recommend sleeping on a futon because it's a firm sleeping surface. And, interestingly enough, the more expensive a conventional inner spring mattress becomes, the firmer it gets."

To hear him tout the virtues of the futon is to hear Binkhorst preaching his gospel. The futon's function in modern society; his company's careful selection of materials, solid wood frames and furnishings; its goal to stay on top of the latest fashion trends and expand its wholesale share; an expanded product line that goes way beyond the traditional futon; and Binkhorst's desire to "empower" his employees by using a progressive management style comes out with a wide-eyed, boyish enthusiasm.

"It's sort of like building an apple pie," he says, standing among stacks of cotton, foam and fiber in the company's 10,000-square-foot warehouse. "Everybody can start with the same ingredients, but some people's apple pies just taste wonderful. And I don't know what we're doing, but everybody just loves our futons!"

[Mark Binkhorst] When people confuse Burlington Futon Co. with Burlington Industries or Burlington Coats, owner Mark Binkhorst jokes that his company "sold those divisions off, because they were too profitable." (Photo: Jeff Clarke)

In the beginning, manufacturing his own products was the furthest thing from Binkhorst's mind. "I'd just graduated from UVM," he recalls of 1984. "I was going to make some extra money, then I was going to get a real job in what I had studied, which was international diplomacy and finance." He purchased 14 futons in Boston and brought them to Burlington with a U-Haul truck, and began selling out of a friend's basement.

"When the basement got damp and the futons had to be sold, I panicked," he says. Luckily a friend lent him a vacant storefront and Binkhorst placed signs around the university. He exhausted his inventory that day. Encouraged, he didn't hesitate to return to Boston and bring another load back to the Queen City.

Soon his Boston supplier proposed a partnership. "I realized that a partnership was about people as well as about business, and it just didn't click," Binkhorst says. "I felt like I could help her business, but I didn't think we could work so well together. So that's when we decided to make our own futons."

In 1985 the company began manufacturing in the third floor of what was once Waterbeds Direct on lower Main Street in Burlington. When he spontaneously purchased his first tractor-trailer load of cotton, Binkhorst admits he didn't know how to sew a futon. "My one employee, John (Dennison), and I just sat there after about three hours with bloody fingers," he says, "and then he figured out the stitch."

Hand-stitching was a method they continued using when the business relocated the following year to part of the abandoned Vermont Maid maple syrup plant on Pine Street. "Our production manager who had been here for almost 10 years had calculated that he'd sewed on his knees to Montpelier and back," Binkhorst exclaims. "It was hard work." While the assembly process is still very labor intensive, the company now uses zippers to close each futon before hand-tufting it.

"When we moved here, our showroom was only two bays wide by three deep -- about 25 percent of the total space that you now see that the showroom has expanded to," Binkhorst says, his voice showing no hint of his Brooklyn upbringing. In May the company expanded the showroom to 4,000 square feet. "The history and integrity of the building, I think, lends itself really nicely, as opposed to some of these newer buildings.

"Our goal is to also make this space not just a furniture store, but also an art gallery," he adds, referring to the artwork lining the brick walls. Binkhorst, who married Burlington artist Maea Brandt two years ago, is devoted to growing and nurturing his business, but he's also interested in providing something for the community. The art gallery to support primarily local artists; working with the Vermont Refugee Resettlement Organization to employ immigrants; helping his employees learn English and obtain citizenship; and weekly staff rap sessions dubbed "catalyst meetings" are perhaps products of Binkhorst's progressive thinking. A child of Dutch immigrants, Binkhorst spent time following high school in South America studying anthropology and archaeology, before returning to New York City to learn retailing at the Pottery Barn, a progressive chain Binkhorst cites as an inspiration for his "way idealistic" management style.

By 1990 Binkhorst was ready to expand, and came dangerously close to signing a lease for space in Portland, Maine, just before the recession settled in to New England like a wet blanket. "We would have lost everything," he says. "I was really fearful. I saw many retail furniture businesses going out of business, so I thought why not wholesale? We have a good product that we know how to make. Let's take it to California where things are happening still."

By the time Binkhorst had committed to wholesaling futon covers on the west coast, the recession had caught up with California. But, with enough of a stronghold already in place, Burlington Futon Co. pulled through, and eventually grew its wholesale business to include 400 accounts around the world.

"By being a retailer we feel we can be a better wholesaler," he says. "Our retail store's sort of a proving ground, our laboratory for learning how to make a better quality product. We work with our wholesale accounts. We're not just selling them a product, we're also selling them ... years of retailing experience."

With a weekly production load of more than 500 covers, priced from $99 to $250 retail, Burlington Futon Co. has become a name brand on a national level. "It's a great thing to see our logo sitting in a store in Maui," Binkhorst says. "It's a real trip." But "Burlington," the abbreviated nickname most people in the industry know the company as, lends itself to confusion with Burlington Industries and Burlington Coats. "When people ask us we tell them that we sold those divisions off, because they were too profitable," Binkhorst jokes.

As the company's wholesale operations grow, he finds himself increasingly on the road, connecting with clients and attending trade shows all in an effort to keep his thumb on the pulse of what's hot. "We have to really know the fabrics, what's selling, and anticipate," Binkhorst says, as he flips through a swatch book. "As a general rule you do 80 percent of your business with 20 percent of your fabrics. It's a lot of educated guesses and having a good computer system to track what's happening."

Computerized or not, Binkhorst seems to carry an intimate knowledge of his fabrics around in his head. "Bombed," he says pointing to one pattern. "This was a big seller," he says about another. "It's the cover that really creates the whole value of the futon package. By making our own covers we really have an edge over anybody else," he says.

The firm, known for its contemporary and ethnic styles, introduced 80 more fabrics at Futon Expo '97 held in Phoenix, Ariz., in May. Sponsored by the 500-member Futon Association International of Chico, Calif., it's an annual event that has grown to include 100,000 square feet of floor space in a major convention center. "We're anxious to see how these (fabrics) are received," he says. "It's very much driven in the same way that apparel is, in terms of being fashion-forward. We have to be on top of what colors, what textures and what patterns are in. If we make a mistake, we could be in serious trouble. ...We're trying to stay one step ahead of everybody else."

On the manufacturing side, the company has turned away from a production-driven model. "We're building to order and practicing just-in-time manufacturing. Rather than just building a lot of inventory and sitting on it hoping that someone's going to buy it, we're building as the orders come in," Binkhorst explains. "This whole concept of keeping our inventory at the raw materials state allows us to be far more flexible."

Still, Binkhorst describes the cut and sew business as cutthroat. "I'm definitely worried about the future, but I think that it's healthy to have a degree of paranoia. If you get too confident, that's when the competition gets the upper hand.

"On a wholesale level, we've seen a lot of retail stores go out of business. The small mom and pops are closing down, and that has been our account base. So we're kind of stuck on the wholesale level," he says. "We either supply the small mom and pops, the small chains that have 10 or 12 stores, or we start selling to Costco," a move that would threaten to blur the high- end distinction Burlington Futon Co. has worked to create.

"It does appear that a lot of people are moving into direct representation of their own products," he adds. "La-Z-Boy owns 150 of their own galleries. So that's a prospect," hinting at a contingency plan should the cut-and-sew operation ever become jeopardized.

The company seems to be flying high, landing on the cover of the latest issue of Futon Life magazine, a quarterly publication that alone provides enough proof that the futon industry has come into it own. It's a spotlight some in the field might consider to be the ultimate honor. "No," Binkhorst shrugs, "the ultimate honor is to have people buy your product."