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Can this Kitchen be Saved

April 29th, 2005 No comments

Wall Street Journal
By Paula Szuchman

FOR A RECENT kitchen-remodeling job, Jennifer Kay.Goodman discovered a designer she says had “real vision” — a professional who suggested a modern look with open cabinets and kidney-shaped counters, and urged her to try stainless support rods under her counters for an airy industrial feel. The best part? The design fee for her one-of-a-kind kitchen came to $60.

Not an old-guard design guru, Ms. Kay.Goodman’s designer is an employee at the local Home Depot. “I expected a guy in an orange apron,” says the schoolteacher in Cambridge, Mass.

When it comes to interior decorating, the big buzz is coming from an unlikely creative community — designers whose nametags read Ikea, Lowe’s, even Ace Hardware. Hoping to boost their share of the $196 billion home-remodeling industry, national chains are expanding their ranks of full-service designers and taking on some fancy jobs. Lowe’s, which added more than 50 locations in the past year, says its in-store kitchen designs have sold so well it is now branching out into deck-planning services. The Great Indoors, Sears’s home-decor chain, did 54% more kitchen designs in 2004 than in the previous year. Coming this summer to House Beautiful magazine: Projects by two designers from Expo Design Center, a Home Depot subsidiary.

But what can you expect from a chain-store blueprint? To find out, we asked designers from six national companies to give us a plan for a better kitchen. The one in our upstate New York “test home” has high ceilings, new appliances and views of the Hudson River — as well as its share of problems, including tile floors that are chilly and hard to clean, plus four separate doorways that leave little wall space for cabinets. We told each designer our total budget topped out at $50,000, asked them to plan for more storage space and new floors, and then gave them free reign with the 250-square-foot space. (We didn’t disclose our media credentials until each design was completed.) Later, we called in New York City designer and architectural historian Thomas Jayne to critique the plans.

Along the way, we picked up a pointer about the kitchen-triangle concept from a salesman at Expo, discovered our kitchen is “mathematically desirable” for Ikea cabinets and met a Lowe’s designer who encouraged us to keep both patio doors for “party circulation.” In the end, we gleaned a few important lessons: Chain-store designers can deliver some surprisingly good plans — but we were always happier with the results when they’d actually visited the space.

Home retailers have been adding design services for the past few years, of course, as some buyers leave the do-it-yourself model and seek more help. But now the stores are stepping up their pitch for big-ticket purchases as home-renovation spending soars — it’s up 11% last year from 2003, according to the National Association of Home Builders. Meanwhile, small businesses say that with big chains undercutting their prices on tools and hardware, they’re forced to stand out by offering additional personalized services. Handymen, too, are getting out the drafting paper: Last month, more than a dozen of Case Handyman’s 66 national franchises played up their design credentials by rechristening themselves Case Handyman & Remodeling. “Their mantra is you sell projects not products,” says Kermit Baker of the remodeling-futures program at Harvard University.

The promise of getting it all under one roof led Michael Palladino to Home Depot when he remodeled his kitchen late last year. “I don’t have time to hire a million different people,” says the 51-year-old client-services director in New York City. But while he liked the design, which included glass-fronted cabinets and track lighting, he wasn’t happy when the kitchen took three months to finish. (Home Depot says a special-order piece broke during installation and had to be reordered.) “It’s not like I lost blood or anything,” Mr. Palladino says. “But I lost out on making Christmas dinner.”

Chain-store designers carry some unique limitations, because they are a hybrid between employee and independent designer. Like non-affiliated designers, many work on commission, so they may have an incentive to sell shoppers on extras. They’re on the job to pitch a retailer’s products — Expo designers, for one, offer only Expo vendors — so it’s unusual for them to incorporate items a customer picks out elsewhere. Some chain-store designers don’t even make house calls (those at Ikea and Lowe’s, for example, generally don’t). And of course, these designers’ experience can vary broadly, with consultants at even the same company having markedly different visions.

For their part, companies say they have rigorous training programs. At the Great Indoors, designers go through 150 hours of classes and have to pass yearly design tests. Expo sends its designers through a “Before the Apron” course that includes 50 to 60 hours of training on design software and store products. At Lowe’s, cabinet salespeople can become kitchen designers after attending what the company calls a comprehensive course. (Industry experts say customers should ask prospective designers how many years of experience they have, and suggest looking for ones with membership in organizations such as the National Association of the Remodeling Industry or the National Kitchen and Bath Association.)

For our test, we focused on national retailers, including two that specialize in home improvement (Lowe’s, Ace Hardware), and two that sell furnishings (Ikea, Expo). We also tried franchises of Case Handyman & Remodeling, based in Bethesda, Md., and Waco, Texas-based DreamMaker Bath & Kitchen. We judged their designs on creativity and practicality, and looked at everything from the designers’ material choice to how far they’d travel to see us. Below are our findings, in rough order of least favorite to favorite:

Ikea, New Haven, Conn.

ESTIMATED JOB COST: About $1,800 for materials, $4,300 for labor, without flooring

HOME-VISIT POLICY: Planners don’t leave store

Ikea, more than the other big retailers we tested, sticks close to a do-it-yourself philosophy. Each store — there are 23 in the U.S., with four added in the past year — has a handful of computer terminals loaded with design software. Customers can use these to plan layouts, occasionally getting advice from staff members. Ikea also put its kitchen and office-design planning tools online last year, in part to relieve in-store crowding.

On our visit, the computer terminals were empty, but the staff was swamped. Pat Martin, one of only two on duty, did her best to show us how to use the software, but we kept getting stuck, at one point deleting a design that had taken us 45 minutes to make. To pass the time while we waited for their help, we watched an Ikea video on how to install a kitchen (it only reaffirmed our decision not to do it all ourselves) and snuck off to the cafe for a plate of Swedish meatballs.

In the end, Ms. Martin helped us pick a clean, country look inspired by Page 32 of the Ikea kitchen catalog: beadboard doors in white veneer and beechwood butcher-block countertops. The bill for materials was $1,833, by far the least expensive in our test. But it’s a good thing we didn’t buy them on the spot: Our measurements were off by about four inches, because we hadn’t accounted for the trim around our windows and doors. (Ikea says it offers a professional measuring service for $75, and will exchange cabinets that don’t fit.)

BOTTOM LINE: We did too much ourselves — but we couldn’t beat the price

DreamMaker Bath & Kitchen, East Greenbush, N.Y.

ESTIMATED JOB COST: $46,000 for materials and labor

HOME-VISIT POLICY: Our designer came out first thing

When Worldwide Refinishing Systems changed its name to DreamMaker Bath & Kitchen six years ago, its goal was to move beyond odd jobs into larger remodeling projects. Today, the national franchiser says an average bathroom renovation runs about $18,000, up from $10,000 when it started.

Our experience started out promising, with Bill Crowe, owner of the franchise closest to us, scheduling an appointment to see our kitchen on Palm Sunday, four days after our initial call. Mr. Crowe, an industrial electrician by training, was eager for our business: His consultation was free, like Mrs. Pike’s, and he offered to take our calls until 11 p.m. He arrived early, carrying a briefcase with cabinet samples and apologizing for using a paper and pen instead of a computer to do his layouts. We liked his old-school approach, and the fact that he doesn’t hire out to subcontractors. (His staff of three is trained in everything from plumbing to tiling.)

But when we received his plans by fax a week later, we noticed something odd — neither one included appliances. We called to point this out, and Mr. Crowe had us a new version within hours. “You never get a second chance to make a good first impression,” he says. His reworked design suggested, as others had, that we should knock out a pantry wall to provide extra space. But it had its quirks: The stove was nearly 10 feet from the fridge, on the other side of a center island.

BOTTOM LINE: Busy layout, personal touch

Williams Lumber (Ace Hardware), Hudson, N.Y.

ESTIMATED JOB COST: $11,000 plus labor

HOME-VISIT POLICY: Before you buy, designer comes out for measurements

When we discovered that some Ace Hardware stores have in-house designers, even we were surprised. Lathes and layouts? Sign us up. Turns out, more than 400 Ace franchises have full-service design centers offering everything from bathrooms to room additions. In our neighborhood, the closest franchise is Williams Lumber, which has seven locations in upstate New York and a new one opening this year just for kitchen design. The Web site for its Hudson, N.Y., store urges customers to meet with Carol Pike, a “highly qualified and talented designer.”

“Tell me something about your kitchen,” Mrs. Pike asked when we called. We were taken aback, because none of the other designers thought to ask this question right off the bat. She told us to come by any time with our measurements. We found the showroom crowded with toilets, model kitchens and flooring samples, and it may not be the place for rushed remodelers: Mrs. Pike is the store’s only designer; she kept picking up the phone each time her name was called over the P.A. system.

Still, we found her knowledgeable, and she helped us pick out materials we never thought we’d like, including bamboo floors and off-white maple cabinets with a coffee-colored glaze. “Ooh!” she said, holding the samples against a reddish-brown granite sample. “This is going to look really elegant.”

A week later, we returned for our design. While we’d find others we would like more, this one had something no one else thought to include: a kitchen table.

BOTTOM LINE: Limited cabinet selection, but offered to incorporate outside products

Lowe’s, Glenmont, N.Y.

ESTIMATED JOB COST: $24,000 — about half for materials and half for labor

HOME-VISIT POLICY: Typically, designers don’t do house calls

Despite the noise from reversing forklifts, the design center at Lowe’s is a surprisingly tranquil spot. A couple of desks and computers are surrounded by handsome kitchen displays, with rows of stainless steel ovens and refrigerators beyond. We were pleased to find designer Art Himmelfarb waiting for us on a Friday afternoon; we’d only made the appointment that morning.

When he saw the photos and measurements of our 1880 Victorian home’s kitchen, Mr. Himmelfarb’s reaction was like that of our other designers: befuddlement. How to create a functional kitchen in a room with so many openings and so little wall space? For two hours, we watched him toy with different layouts, scrapping some and starting from scratch, or having “brainstorms” involving refrigerator placement. He listened to our concerns and had ideas of his own, including adding a couch in the corner and keeping both patio doors intact for good flow at parties. Then he packed up so he could make it to Schenectady for a George Carlin show. “I’m a Carlinist,” he said. “The man’s a comedic genius.”

After another computer-design session a few days later, Mr. Himmelfarb printed out the design, including one in a fancy three-dimensional rendering, and sent us to the cashier to pay a $70 “measurement fee.” A week later, an installer subcontracted by Lowe’s came by our house to double-check our measurements. When we showed Mr. Himmelfarb’s layout to Mr. Jayne, the designer said it had a “scientific practicality about it that looks as if an engineer designed it.” On the other hand, he said, it was claustrophobic, with way too many cabinets.

BOTTOM LINE: One of our more affordable estimates, with a quick design time

Expo Design

Center, Nanuet, N.Y.

ESTIMATED JOB COST: $31,700, materials only

HOME-VISIT POLICY: Typically, multiple visits

We didn’t think we’d get far here: Expo Design Center has 54 U.S. locations, but the closest to us was about 100 miles away. The company says it generally doesn’t work on houses more than 50 miles out, but a manager agreed to take our business on two conditions: We’d have to hire our own contractor for installation, and the designer would only come to the house once (they typically go out multiple times).

We visited the store once to sign up, then returned for a meeting with our assigned designer — Henry Font, a former runway model originally from the Dominican Republic. Clipboard in hand, he took us around the 100,000-square-foot store to pick out materials, gushing over pricey faucets and quoting industry stats that a new kitchen would boost our home’s value by 20%. Four hours later, we were exhausted, but we’d made some big choices: red oak floors, natural maple cabinets and a side-by-side sink.

A week later, Mr. Font came to the house, filled with ideas not just for the kitchen — “Oh my God, how wonderful,” he said, eyeing the place — but for the bathroom, bedrooms and patio. He even suggested tearing down three walls to expose the pantry and stairs, which our contractor said would cost $20,000 in labor alone. For the kitchen, he suggested a long peninsula in the middle of the room, plus a wine rack, backlit martini shelves and a racy stainless-steel stove hood. All of which added up to the most expensive proposal in our test.

Another catch: Though we paid a $750 retainer for Mr. Font’s consultation, we couldn’t get a hard copy of his layout because the company won’t release its designs until materials have been bought. “We have to protect the integrity of our design services,” said Tony Zarvou, Expo’s director of at-home services, adding that the company prefers to work on homes closer to its stores.

BOTTOM LINE: Too many rules and a lot of upselling — but a thoughtful design

Case Handyman & Remodeling, Amherst, N.Y.

ESTIMATED JOB COST: $48,890, materials and labor

HOME-VISIT POLICY: Our designer did his plan on-site

“I’m trying to absorb the character of the house,” said Jim Lyon, as he stood in the middle of our kitchen, arms akimbo, looking up at the pressed tin ceiling. Mr. Lyon was surprisingly jovial for a man who had just driven more than 300 miles to our house — our survey’s record — and received a speeding ticket along the way.

He had been similarly upbeat when we had met him in his office, a welcoming place just outside of Buffalo with a new one-cup coffeemaker and a banner that read “On Time + On Budget + Delighted Client = Success.” Mr. Lyon, who studied architecture at Dartmouth and has been in the handyman business for two decades, agreed to take on a job at our old Victorian in spite of the long drive. We showed him photos and measurements, picked out some Shaker-style hickory doors and agreed to meet at our house two weeks later.

He showed up — on time — with a digital camera, laptop with design software and a printer. “It’ll help me develop the ideas as I go,” he said. While initially perplexed at the space limitations, he was the only designer to come up with a key concept: Rather than open up the wall between our kitchen and pantry to create more space, he suggested closing it off completely. The resulting L-shaped design gave us extra counter space and a corner refrigerator. He also suggested adding a picture window on the south-facing wall, to take advantage of our river views. When we showed Mr. Jayne the plans, the designer said: “It’s a model of efficiency, without being claustrophobic.”

BOTTOM LINE: Retainer was a hefty $2,500, but design was our favorite.

Copyright 2005, Dow Jones & Company, Inc.. All Rights Reserved

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Speed Law

April 22nd, 2005 No comments

It is fair to say that attorney Rhea Law, the first female president and chief executive of the Tampa Bay, Fla.-based law firm Fowler White Boggs Banker, knows something about moving quickly–and decisively.

She has flown an F-16 fighter plane, gone skydiving from 13,500 feet and is a longtime car racing aficionado. Law, 55, also happens to be the only woman to head one of Florida’s 25 largest law practices.

Founded more than 60 years ago, Fowler White Boggs Banker is a full-service firm with more than 200 lawyers in nine offices throughout Florida. Law has been president and chief executive since May 2002. Her practice areas include acquisition, permitting, environmental representation, land use and zoning matters, with specific emphasis on commercial, industrial and residential matters.

Gov. Jeb Bush appointed Law to the Florida Council of 100 and to the University of South Florida’s Board of Trustees. Last year, Law was selected by Florida Trend Magazine as one of Florida’s “Legal Elite,” representing the top 1.6% of practicing Florida Bar members. She was also selected as one of the most influential people in Florida.

“I’ve really been blessed to do a lot of exciting things,” she says.

Forbes.com recently spoke with Law about her passion for exhilarating sports.

Forbes: What kind of auto racing do you do now?

Law: We have a little car that we bought a year ago, a HYPERLINK “http://www.forbes.com/lifestyle/vehicles/2004/08/16/cx_mf_0816test.html” Mini Cooper. My husband has completely revamped everything, including the supercharger and suspension. He’s just about doubled the horsepower in it–it’s just a little pocket rocket. So we took it out to Autocross [Autocross/Solo II events are Sports Car Club of America-sanctioned low- to medium-speed auto racing events that often run on parking lots and airport runways], and we ended up winning our class. My husband came in first, and I came in second. That’s pretty neat.

The Mini Cooper will actually give my Corvette a run for its money, as long as it’s going around corners. If you get it straightened out, the horsepower of the Corvette will take it every time. If you’re running a tight road course, that little Mini Cooper is pretty deadly.

How did you first become interested in racing cars, and how did you learn to do it?

I learned by doing. The first thing my husband and I did together, before we became husband and wife, was build a car from the ground up. I did all the body work, and he did all the engine work. Much to my incredible surprise, after having it sprinkled out across the garage floor for a year, when we got it all assembled, he said, “OK, let’s crank it up.” I never thought it would start, and he said, “Oh sure it will.” We got in it, and it cranked right up. It was wonderful.

I’ve just always liked things that were fast, and I’ve always liked big machinery. Anything you can get into and go fast, I like. At one point, I had an 88-mph boat–and that’s a big thrill. I used to race SCCA and also Motocross motorcycles.

How many races do you think you’ve been to in your life?

Oh my, I wouldn’t know how to even count that. A lot!

What are SCCA races like?

I’ve heard people describe a golf game they played five years ago, and they can tell you everything–from what it felt like approaching the ball to what kind of swing they used. Race car driving is like that, too. You remember the course, you remember the corners and how you felt. Racing takes total concentration. You can’t think about a client problem or a leaky faucet at home. None of those things come into play, because you have to have total concentration on what you’re doing, or else you’ll end up off the track someplace. When I think about racing, I think of the speed and the exhilaration. And hopefully, I win.

What is it that you enjoy most about racing?

The speed. The exhilaration of that kind of excitement.

What’s the fastest speed you’ve ever gone to?

One hundred eighty miles per hour. Pretty fast. But then again, I’ve had an opportunity to fly an F-16, and we broke the sound barrier. It was unbelievable.

How did you get to do that?

By begging. We have McDill Air Force Base here. As I was coming up to be chair of the Chamber [of Commerce], I was interested in doing things in concert with the base. In years past, the base used to be an F-16 base, and the new chair of the chamber would always get an opportunity to fly in an F-16. But the F-16s went away years ago. I had told them that it would be very cool to be able to do that. I was most surprised one day when I got a call from the Pentagon, and they said, “You’ve been cleared for a ride in an F-16, and we’re sending one down next Wednesday.” I quickly pulled up my calendar and thought, “Oh, what a terrible day for me.” And then I thought, “What am I saying?” So then I called everyone in the department and said, “We have a problem, you guys are going to fix it, because I’m not going to be here next Wednesday.”

I had training in the morning, and then I got to fly. He let me fly the majority of the mission, which was unbelievable. We went out and we broke the sound barrier. We did a lot of aerobatics, which he actually let me execute. Flying back to McDill, he said, “I’ll take over now to land,” and I said, “I can land this.” And he said, “Yes ma’am, but you’re not going to.”

Had you ever done any flying before that?

You know, I’ve had a lot of experience in flight, but without benefit of a license. I used to have a client and we used to go up to Tallahassee three times a week, and he used to let me fly and would explain it to me and all that. Someday, I’ll get a license–I just don’t have the time at the moment. I’ve really been blessed to do a lot of exciting things, and I really like that.

You seem to like speed. Have you ever done any other “extreme” activities?

Just recently, I got to jump out of a perfectly good airplane with the U.S. Army [Parachute Team] “Golden Knights.” It was incredible. The jump was 13,500 feet, and we did a free fall to 8,000 feet, and then we popped the shoot and came on down. Boy, what an excitement that is. It was a real thrill. It was my first time skydiving. It was with the same jump team that jumped with George Bush the senior. I figured if there’s anybody that’s going to take good care of me, it would be them.

How do the lessons you’ve learned from sports apply to your business career?

I think you have to have a certain amount of aggressiveness and competitiveness. I think sports are really important to being good in any kind of career, but certainly in the legal career. It goes back to that concentration I was talking about before–you have to be disciplined, and you have to concentrate totally on what you’re doing if you’re going to be good at racing. You have to concentrate totally on what you’re doing as you’re prosecuting a legal case, or whatever it may be. That preparation, and then that execution are important.

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Bankruptcy Reform Law Limits Pay For Execs Of Ailing Cos

April 20th, 2005 No comments

DOW JONES NEWSWIRES
Kaja Whitehouse

NEW YORK (Dow Jones)–The bankruptcy-reform law signed by President Bush today will reign in compensation given to executives who work for bankrupt companies. The bulk of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 targets consumers, making it tougher for individuals to wipe away their debts by filing for bankruptcy. Section 331 of the law, however, also seeks to get tough on excessive compensation packages paid to executives of ailing companies, which are often paid at the opposition of shareholders and rank-and-file workers.

Under the new law, corporate executives are forbidden from receiving so-called retention bonuses unless it could be proven that the money was essential to the retention of the employee. That means demonstrating, for example, that an executive who expects to receive a retention bonus has a “bona fide job offer from another business,” according to the law.

The amount of the bonus will also be limited by the bill to either no more than 10-times the amount of the mean of severance pay given to non-management employees, or to an amount not exceeding 25% of similar compensation made to the executive the previous year.

The law limits severance payments, or compensation generally paid to those who are forced out. Severance packages for executives can only be approved when they’re part of a program made available to all full-time employees. The law also seeks to limit the amount of payment offered in executive severance packages to no more than 10-times the amount of the mean severance pay given to non-management employees.

Section 331 also adds language that seems aimed at a broad-brush prevention of abnormal compensation paid to officers, managers and consultants hired after the date a corporate bankruptcy petition is filed. It disallows any payments made “outside the course of business and not justified by the facts and circumstances of the case” to these groups.

Retention bonuses and other financial perks provided to executives of bankrupt companies in an attempt to keep them from jumping ship are part of what’s known as key-employee retention programs, or KERPs. KERPs have come under fire in a number of high-profile corporate bankruptcies in recent years, including that of Enron Corp., which paid millions in bonuses to select employees, officers and executives in the days prior to its bankruptcy filing, yet only required the recipients to remain with the ailing company for 90 days.

The law provides “a level of predictability for all sides involved,” said Donald Kirk, an attorney with Fowler White Boggs Banker in Tampa. Executives know what they will be getting, as do the creditors, shareholder and rank-and-file employees, he said.

The law could also stem litigation over KERPs, which has been widespread in recent years, said Kirk. “In almost every big case the retention bonus has been litigated,” he said.

Opponents of the law have argued that the measure will hinder companies from rising out of bankruptcy by limiting what they can offer to retain the best people for the job.

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