TEMO aims to be Ikea of sunrooms | Crain's Detroit Business

2022-09-09 23:43:04 By : Ms. feng xin

All Nino Vitale knows is waking up and going to work.

The 77-year-old founder, owner and CEO of Clinton Township-based TEMO Sunrooms doesn't understand the concept of working from home, but he doesn't have to. All he needs to figure out is how it impacts his business, which after 50 years, needs some reinventing.

While material prices for TEMO's outdoor structures have tripled in the past three years and cut margins in half, the labor shortage has left the company and its dealer network struggling to meet demand.

So, TEMO is standing up a new direct-to-consumer vertical inspired by the do-it-yourself trend of the COVID-19 pandemic and work-from-home era. The idea is to cut costs and complexity, appeal to more consumers and reduce reliance on contractors.

The vision is to be the Ikea of sunrooms, or the new "TEMO Depot," as Vitale explains it.

"The consumers got the answers," he said with a cheerful Italian accent during a tour this week of his 120,000-square-foot plant on Hall Road. "I learn from the consumer."

Home improvement is a $250.6 billion industry in the U.S., according to data firm IBISWorld. It's a stat that Vitale has in his back pocket when questioned about growth potential for the company.

But Vitale has more on his mind than just business trajectory. He's also thinking about legacy and what will become of the business if no one in his family wants to carry the torch.

Despite being in the business of luxury and leisure, Vitale isn't one to relax. Since immigrating to metro Detroit from Italy in 1968 and launching his business two years later, his primary focus has been keeping the company stable.

Vitale grew TEMO (Trust, Enthusiasm, Motivation, Opportunity) to $50 million in annual revenue before sales took a $40 million nosedive during the Great Recession of 2007-09. Sales have since increased steadily to a projected $25 million this year, but Vitale is hungry for more.

He laughs off the notion of retirement, but reluctantly relinquished some day-to-day control of the company earlier this year with the hiring of a new president, Bradley Walker.

"Change, in my years of business, had to be done a few times," he said. "Because, basically, if you don't change you go out of business."

Walker, a native of Texas and service industry veteran with 20 years of leadership experience, is tasked with bringing Vitale's vision to life.

To start, Walker said, that will require launching the new business this fall, Luxury Backyard Living LLC, along with a revamped website and shopping catalog and a new enterprise resource planning system to integrate the new flow of operations. The company also hired Mount Clemens-based Hunch Free Inc. to redevelop its marketing strategy.

On top of that, the company plans to invest $1.4 million to automate a lamination line and materials handling in its plant and is considering installing a conveyor to load trucks. It would ease the burden of its 60 manufacturing employees and lessen the urgency to find more labor.

As part of the restructuring, Walker said the company aims to hire an additional 5-10 employees, adding to its staff of 25 on the administrative and showroom side.

"There's a lot of work going into re-laying the foundation to make this scalable," Walker said.

Steeped in sunroom manufacturing, TEMO makes a variety of other standalone structures and add-ons, including patio covers, windbreakers, screen enclosures and pergolas — one of the hottest trends for homeowners.

TEMO's business now is almost solely through a dealer network that consists of home improvement stores across the country, including Taylor-based Wallside Windows. Its largest customer is New Jersey-based SRA Home Products.

Typically, customers buy TEMO products through the dealers, which charge substantial markups after contracting out the installation work. The DIY model seeks to eliminate that.

The envisioned self-assembly kits will be similar to the ones prepared for dealers, but much simpler, Vitale said. They will be shipped to homes in pre-assembled panels with user-friendly instructions written with the weekend warrior in mind, he said.

The plus side is better margins for the business, Vitale said, while customers willing to put forth some sweat equity pay half the typical price for a unit. A typical sunroom installed by contractors costs about $35,000, whereas a DIY screen room or windbreaker kit with similar materials costs $8,000-$12,000.

TEMO will continue doing business through dealers, the executives said, especially for more complex jobs and home additions, which require more permitting than standalone structures.

"We want (DIY) to be just as big as the regular business, maybe bigger," Vitale said.

Stores such as Lowe's, Home Depot and Menards have had self-assembly sheds for years, Walker said, but they differ from the quality living spaces being developed by TEMO. A handful of companies in China and Turkey are trying a similar model, but Walker hopes to beat them in the race.

"We have to get more efficient," Walker said, adding that he is exploring the integration of EPS foam manufacturing at its plant to protect against supply disruptions of a key material. "All of the business paradigms and ways of doing business kind of got thrown out during COVID."

Vitale keeps an eye on spreadsheets, but he's not much for being tied to a desk. Doing laps around the plant help him stay engaged with employees, he explained on one such walk, during which employees returned his cheery greetings.

"I love to come to work every single day," he said. "I always look at my employees as an extended family because you spend more time with your fellow employees than you do at home with your wife."

On the subject of family, Vitale said he's been unsuccessful thus far in passing along his passion for the business to his kids. They are pursuing their own interests, and he understands that, but now he's holding out hope for his two teenage grandchildren who he takes to work whenever he has the chance.

"Probably, hopefully, they're gonna take over," he said. "But either way there will be a future, and my people will be taken care of at TEMO."

Vitale leaves it there. He said he doesn't like to dwell too much on the future when there's much to be done in the short-term. So, he'll keep waking up and going to work as long as he can.

"I got to have a sense of achievement," he said. "I have a lot of things I still have to accomplish."

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