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Chinese mattress imports fall to share of less than 1% in September

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ST. PETERSBURG, Fla. — Chinese mattress imports were down again in September, falling to a market share of less than 1%, industry reports say.

Raymond James, which follows the import figures closely, said Chinese mattress units fell from 7,068 in August to just 3,355 in September.

In September 2018, Chinese mattress units were 558,876, giving China an 87% market share that month.

“On a sequential basis, China mattress imports were down 53% in September 2019 vs. August 2019,” Raymond James wrote in a report on the September import figures.

Tariffs and stiff antidumping duties on Chinese mattresses have combined to slow Chinese imports to a trickle, bedding observers say.

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Indonesia mattress imports grab 25% share in September

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ATLANTA — Mattress imports from Indonesia have grown rapidly in recent months and commanded about a 25% share of the mattress import market in September, an industry report says.

Vietnam was the No. 1 mattress source country in September, with a 28% share, said SunTrust Robinson Humphrey. The firm said Vietnam mattress imports “were very limited in 2018 but have surged over the past three months.”

Mexico has held steady in the mattress import arena with a share of approximately 10% to 15%, SunTrust Robinson Humphrey said. Cambodia “has ramped up from a modest level to nearly 13% of all imports in September.”

It said that Chinese mattress imports suffered “a total collapse” following the recent anti-dumping duties and added that “all of China’s fall-off” has been offset by Vietnam and other countries.

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AkzoNobel breaks ground on $55M expansion of High Point wood coatings facilities

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HIGH POINT – In a project that economic development officials say will be among the largest one-time capital investments here in the past five years, wood coatings specialist AkzoNobel broke ground Friday on a $55 million investment in its industrial coatings manufacturing site.

Expected to be completed in 2021, the project is expected to strengthen the company’s position in wood coatings, which serves the furniture, building products and flooring market segment in addition to the company’s Chemcraft distributors. Chemcraft is the company’s specialist wood coatings brand that allows distributors and OEM customers the ability to match any color.

The company said that three core improvements include additional automatic dosing technology to product coatings more efficiently and flexibly with higher color accuracy, improved filling lines to better serve its Chemcraft distributors, and a new R&D laboratory and Technical Application Center that will allow faster and more effective product development for OEM customers.

Attending the event were Thierry Vanlancker, CEO of AkzoNobel; Ard van der Vorst, consul general, consulate general of the Kingdom of the Netherlands; Doug Barbe, AkzoNobel integrated supply chain director for the Americas; Simon Parker, AkzoNobel, global business director, Industrial Coatings; Anthony Copeland, N.C. Secretary of Commerce; and Jay Wagner, mayor of High Point.

This year marks the 100th anniversary of the company’s North American wood coatings business, which dates back to the incorporation of Louisville, Ky.-based Reliance Varnish Co. AkzoNobel has had a presence in High Point for 64 years.

CEO Thierry Vanlancker said the project was the result of four years of budget planning and noted that the investment represents the equivalent of two world class plants in China and a similar facility in North America. “The fact we chose to do this in High Point is a great sign in the trust we have in the High Point site, in the High Point community and in North Carolina,” he said.

“This $55 million project ensures our market leadership for the next 100 years and beyond,” he added. “The U.S. is a strategically important market for AkzoNobel, and we are committed to maintaining, building and expanding our market positions across our portfolio of coatings segments.”

“This is an exciting day,” Parker added, noting that customers have come to expect the company to raise the bar on the level of products and services it offers. “This investment is a significant part of our response to that,” he said, adding that innovation remains at the heart of its mission at AkzoNobel.

He added that the project will make it possible for the company to act more quickly on trends in the wood coatings market and “enable us to better serve our customers in the furniture segment, our Chemcraft distribution partners and other customers currently served from High Point.

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Blog: Telling consumers about domestic advantages is a selling point worth sharing

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As the furniture industry continues to navigate the realm of global sourcing, many of the most obvious source countries are in the Eastern hemisphere, where a worker’s monthly wages might equal what a U.S. factory worker makes in a week.

Yet, the United States remains a key part of this sourcing equation. And that’s not just in upholstery — most of which is still made in the U.S. — but also in case goods, a category beleaguered by imports for nearly 20 years.

At the recent High Point Market, it was obvious that wood product still made in America covers a wide mix of price points. This ranges from RTA from resources such as Sauder and Ashley to mid/upper-middle-priced wood bedrooms seen at resources such as Vaughan-Bassett and some of its Amish competitors.

Of course, the high end, too, remains a viable realm with wood product using a mix of materials from both domestic and overseas resources.

Across these price points, however, imports remain a noteworthy competitor. This is particularly due not only to low prices gained from inexpensive labor, but also to investments in new equipment and facilities. Indeed, based on observations from my recent trip to Vietnam, the size and capacity of many Asian factories alone dwarfs U.S. plants, making economies of scale part of the DNA of those facilities.

At a glance, such huge capacity — along with built-in price advantages — might cause many domestic producers to shudder.

But realize that price, while important, may not be the most important thing, particularly for a new breed of educated, socially and environmentally conscious consumers. And we’re not just talking about Millennials. These consumers span all age groups, particularly those who are raising children and grandchildren in today’s complex and, some might add, challenged world.

Domestic producers, while smaller than many Asian counterparts, have a story to tell that includes several key advantages.

+ Ability to customize product not only in terms of finish, but also size and scale of product. This may result in smaller lot sizes. But it also will allow them to produce exactly what the customer wants when they want it.

+ Speed to market. This results from U.S. producers’ proximity to U.S. consumers. Manufacturers’ ability to inventory stateside can also help get the product to the customer even quicker.

+ A green story thanks to their proximity to regional wood resources, such as Appalachian hardwood chain. Many domestic resources, Amish included, are lowering their carbon footprint by making the goods stateside vs. having the materials shipped overseas and then having them shipped back as finished product.

+ Employing U.S. workers to build the product. If U.S.-made still means something in overseas markets such as China, Japan and even Russia, then shouldn’t it mean something here, too?

+ The ability to innovate within a specific category. A good example of this was Vaughan-Bassett’s Push to Open technology seen on drawers of case pieces in its new Touché collection. Borrowing a page from the playbook of premium kitchen cabinets, a slight touch of the mechanism effortlessly opens each drawer on chests, dressers and nightstands.

These are just several domestic advantages that might resonate with many of today’s consumers. But is the story being told at retail? It seems that the ability to communicate the story to consumers is just as important as the selling points themselves. Therein may lie the success of U.S. furniture producers over the long term.

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USTR office rolling out decisions on tariff exclusions

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WASHINGTON — Several furniture companies have been denied exclusions for products covered under the $200 billion on Chinese products affected by 25% tariffs.

In the denials, the U.S. Trade Representative’s office said, they had failed to show how the tariffs would cause economic harm to the company or its customers. Or they failed to show that the product in question is not available outside China.

However, the USTR made it clear that those same companies could receive an exclusion if another company receives an exclusion for the same product.

Those decisions are expected in the coming weeks. While a firm deadline was not immediately clear, the U.S. government is still reviewing exclusion requests for companies such as Ashley Furniture, Bernhardt, Cheyanne Products, Currey & Company, JLA Home, Jamie Young Company, Janus et Cie, Rooms To Go and Stork Craft, to name several.

The exclusion requests named various products ranging from cut-and-sew kits to office and motion furniture. The requests also detailed on why each resource was seeking an exclusion.

Among the issues presented:

  • Difficulty in sourcing such products in the U.S. and that other countries outside China either did not have an experienced labor force necessary to produce such products.
  • Moving the products would prove extremely difficult, as materials used to build them — such as a specific species of rattan — are not available outside China.
  • Building nursery rockers outside China would be very difficult as it would take a long time to get other source countries up to speed on building them up to U.S. standards. The company said in its request that it also was unable to secure wood necessary to make sure that product was safe for children and nursing mothers.
  • One company said it had traveled to India and Vietnam and had contacted multiple sources in Mexico to build wooden household furniture. It said it was unable to move the production of this product due to lack of capability. It also cited material compliance issues.

The company added that sourcing in the U.S. is far too expensive and would require longer manufacturing times and that the few resources in the U.S.  do not have “adequate capabilities for design, quantity and price to sustain an industry servicing home décor retailers across the country and in all price sectors.”

It went on to say, “We hope it will be recognized that the sudden tariff and duty on furniture products is a large burden to the U.S. consumer. Although there are furniture manufacturers in the U.S., they do not make the same types of pieces, at the same lead-time, nor at the same price point. The U.S. manufacturers make beautiful, well-made furniture, but there is also a need for less expensive alternatives for U.S. families.”

One major retailer seeking an exclusion for modular sectionals and motion furniture said that high-quality upholstered motion furniture is not widely produced in the United States and falls far short of the quantity it needs.

“In addition, nearly all the components needed to produce upholstered motion furniture — including mechanisms, fabrics and leathers — are imported to domestic production facilities from Asian countries,” the retailer said. “Because of this longstanding reliance on third country component production, domestically produced components are virtually unavailable, meaning that U.S. production of the upholstered motion furniture cannot be rapidly expanded, if at all. Moreover, production of upholstered motion furniture is labor intensive, leading to quickly escalating production costs in the United States.”

For more detailed information on the exclusion requests, visit the following links:

For tariffs on $200 billion in China-made product, https://exclusions.ustr.gov/s/docket?docketNumber=USTR-2019-0005

For tariffs on the remaining $300 billion in China made product, https://exclusions.ustr.gov/s/docket?docketNumber=USTR-2019-0017

The deadline for submitting an exclusion request for this group of products is Jan. 31, 2020. To submit an exclusion request, go to https://exclusions.ustr.gov/portal/s/login/?startURL=%2Fportal%2Fs%2Fsubmit-new-exclusion-request%3FdocketNumber%3DUSTR-2019-0017&ec=302

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ITC finds U.S. mattress industry injured by Chinese imports

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WASHINGTON — The U.S. International Trade Commission today unanimously found that the U.S. mattress industry has been materially injured by imports of mattresses from China.

The vote was 4-0, the International Sleep Products Assn. said in a member alert.

“The significance of the ITC’s vote today is that soon after its decision is published in the Federal Register (which will occur in several weeks), the U.S. Department of Commerce will issue an antidumping duty order on mattresses imported from China, and cash deposits of antidumping duties will continue to be collected on such imports at the rates set in Commerce’s final determination,” ISPA told its members.

“That order will likely remain in place for at least five years, at which time parties may request a so-called ‘sunset review’ to determine whether the antidumping duty order remains necessary to protect the U.S. industry from injury,” the ISPA alert continued.

“If the ITC finds that the order is still necessary, it will continue in effect for another five years, at which time another sunset review may be requested. While the order is in place, Commerce may periodically adjust the amount of the antidumping duties to be collected, and those adjustments can be up or down.”

In October, the U.S. Department of Commerce issued its final determination that imported mattresses from China were being sold in the United States at less than fair value. In its final determination, Commerce revised the antidumping duty rates applied to these imports. The revised rates range from 57% to 1,732%, depending on which companies produced and exported the mattresses from China, ISPA said.

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Inaugural Malaysian Wood Expo exceeds expectations

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KUALA LUMPUR, Malaysia – The inaugural Malaysian Wood Exhibition held here earlier this month drew 3,000 visitors who came to see a variety of woods used in furniture, flooring and other household products.

The Nov. 19-21 event was held in about 80,000 square feet of space at the Putra World Trade Center in Kuala Lumpur. It was the first international wood and wood working machinery event organized by the Malaysian Timber Council in partnership with the Panels & Furniture Group.

There were 135 exhibitors from 22 countries that showed a mix of tropical hardwoods and temperate softwood species as well as sawn timber, wood flooring, doors and door frames as well as machinery such as dust collection equipment, edge banding equipment, cutting tools, abrasives and adhesives and coatings equipment.

Exhibitors were from Germany, Italy, France, Belgium, Gabon, China, Chile, New Zealand, Taiwan and Singapore while visitors were from France, New Zealand, South Africa, India, Singapore and Maldives.

“We are extremely happy with the outcome of the Malaysian Wood Expo,” said MTC Chairman Dato’ Low Kian Chuan. “It was a commercial success with brisk sales, literally. The expo was well-attended by a broad spectrum of visitors and buyers from day one. And to our great surprise, our sales far exceeded the initial target of RM25 million.”

Officials initially projected sales of RM25 million, but visitors responded beyond expectations to the mix of Malaysian-made products. Estimated sales during the three-day event totaled RM140 million.

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Brazilian manufacturer Herval opens 1st U.S. warehouse

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MIAMI, Fla. – Grupo Herval, one of Brazil’s largest furniture makers, has opened its first U.S. warehouse here to handle U.S. distribution of its premium Uultis Design brand of dining and occasional furniture. Uultis will target both the retail and design channels.

“We are opening the new warehouse in Miami to offer fast delivery service and support to premium retailers and designers in the U.S. and Canadian markets,” said Grupo Herval President Agnelo Seger in a release. The company also exhibited at October Market.

Uultis Design's Pin dining table is designed by Sergio Batista.

Uultis Design’s Pin dining table is designed by Sergio Batista.

“We were very pleased with the positive reaction to Uultis Designs at the High Point Market,” Seger said. “It provided us with an important opportunity to showcase our furniture which is designed by the best Brazilian designers and combines the latest in technology, design and our commitment to sustainability featuring natural raw materials, especially wood.”

Grupo Herval, celebrating its 60th anniversary, is one of the largest conglomerates in Brazil. In addition to its furniture manufacturing businesses, Grupo Herval is the largest Apple distributor in Latin America and also has significant holdings in retail, real estate and financing with annual revenues of more than $700 million.  Grupo Herval exports to 30 countries worldwide.

Herval’s manufacturing facility in the southern Brazil state of Rio Grande do Sul.

Herval’s manufacturing facility in the southern Brazil state of Rio Grande do Sul.

With the opening of its Miami distribution facility, Uultis Designs will be available for immediate or quick delivery in the United States and Canada.

Uultis Designs featured products included the Mince and Sole armchairs, designed by the Brazilian designer Larissa Batista, partner with Sergio Batista at the Know How Studio. The collection also includes full line of sofas, dining rooms and accessory pieces.

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Vanguard’s wood facilities fuels its domestic, import edge

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CONOVER, N.C. — Vanguard Furniture’s wood production facilities here are helping the company stay competitive as both a domestic producer and importer.

Through this blended strategy, the company imports wood products — ranging from parts to fully assembled product — for its bedroom, dining, occasional, office, vanity and entertainment lines from Vietnam and Indonesia. It then builds and customizes the finished product in Conover.

This custom process involves some 70 wood and painted finishes available in a variety of looks ranging from lower sheen applications to high gloss looks. But it also extends to the customization of components such as table legs, drawer fronts and bases of case pieces.

Vanguard also uses some 2,000 fabrics, which are applied to dining chairs and the headboards and bases of upholstered beds.

Some of this product is available through the company’s Make It Yours program that covers bedroom and other wood categories such as dining, occasional, home office and vanities. But the custom component also extends throughout the entire case goods line, including licensed designer collections by Thom Filicia and Michael Weiss.

“We have a hybrid approach to sourcing,” said Andy Bray, president. “We approach product from a capability and value story, backwards. We design product and say, ‘What if anything can we do at our own factory and what is the consumer willing to pay?’”

The blended strategy is one that helps make the company competitive as it benefits from the quality and craftsmanship of low-priced Asian labor that is later combined with the craftsmanship and capabilities of American workers.

Indeed the customization on the wood side has roots in the upholstery business, which dates back to the late 1960s. The company began offering case goods around 1990.

By Bray’s estimates, some 90% of its current case goods line has some U.S. value added component, including some assembly.

“We have really carved a niche,” Bray said, noting that over the years, its customers — notably designers — have come to value its custom capabilities on the wood side. “We apply that same (custom) mentality to case goods and we are always thinking of what can we do that make something individualized…something that a designer can get to solve a problem for their client.”

With its custom options, which also include hardware and premium drawer face options with materials ranging from ash burl and bird’s eye maple to bone and capiz shell, the company once again combines imported materials with American craftsmanship to build finished pieces.

“More than anything we are a domestic resource,” Bray noted of the wood facilities that currently employ about 75 of the company’s 600 workers. “We start off with the imported item and are putting on details that make it special. And we do it one-off. In most everything in case goods, we think of what we can do to add value.”

Today, he estimates case goods represents nearly 40% of overall sale volume, more than triple what it was 10 years ago. Bray attributes this success not only to the custom offerings, but also the style-driven nature of the line.

“It all starts with product,” he said, adding that order turnaround is relatively quick, with custom orders shipping in three to four weeks from the time of order. “We have been blessed with good designers and good designs, and we have been able to tell a value story.”

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Natuzzi revenue off 3.7% in Q3

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SANTERAMO IN COLLE, Italy – Tariffs on Chinese goods and an ongoing focus on directly operated stores that reduced wholesale revenue contributed to a 3.7% third-quarter revenue decline at Italian leather upholstery major Natuzzi.

The company reported consolidated net sales for the three months ended Sept. 30 of €88.1 million compared with €91.5 million for the same period in 2018.

Natuzzi lost €11.7 million in 2019’s third quarter, compared with a profit of €59.6 million in the prior-year period.

Third-quarter net sales for Natuzzi’s core upholstery, accessories and home furnishings business of €83.7 million were off 3% compared to third quarter 2018. The company attributed that to the deconsolidation of its Chinese commercial subsidiary following the agreement with Kuka Group finalized in July 2018.

Natuzzi division revenues increased 5% increase in the third quarter, driven by a 19.5% increase in the Americas. Asia-Pacific sales were off 4.1% despite a 15.4% increase in China.

Sales for directly operated stores were up 20.1% through 2019’s first nine months to €44.8 million. Natuzzi Group now directly operates 56 mono-brand DOS, of which 40 are Natuzzi Italia and 16 are Divani & Divani by Natuzzi stores. The group also directly operates 12 Natuzzi Italia concessions. By the end of the year, Natuzzi will open 2 additional new Natuzzi Editions directly operated stores in the United Kingdom.

DOS sales were, up 20.1% vs. the first nine months of 2018. In particular, DOS located in the USA have shown a 47.0% increase in sales, achieving a positive result.

On a like-for-like basis, revenues of the 45 DOS were up 6.3% for the nine months of 2019, while they decreased by 2.1% in the third quarter of 2019.

The Natuzzi division also includes sales generated by third-party operated mono-brand points of sales including franchised operated stores and galleries. Natuzzi sales generated by these third-party operated points of sale were €52.4 million, up 4.5%, net of the deconsolidation effects of the Chinese subsidiary as mentioned above.

So far in 2019, Natuzzi has closed 31 franchised operated stores, 250 galleries and smaller points of sales whose partners and locations were inconsistent with the company’s brand strategy. At the same time, Natuzzi has opened 63 franchise locations, of which 43 are in China. Another 26 FOS should open by year’s end, including of which 12 in China and three in the United Kingdom.

Third-quarter sales generated by the Unbranded wholesale division of €17.9 million were down 18.8% compared with the same period last year. Natuzzi attributed that to China tariffs in the U.S. market and rising price competition. As a result, the company is downsizing its manufacturing plant in China and exploring alternative outsourced solution in tariffs-free and low-cost countries.

Through 2019’s first nine months, net sales of €286.4 million are off 8.6% compared with the prior year. The company lost €26.8 million through the third quarter compared with income of €45.6 at the same point in 2018.

In reaction to China tariffs, “this year the group has been engaged in an extensive revision of the group’s industrial footprint with the aim to recover volumes and improve margins,” said Chairman and CEO Pasquale Natuzzi in an earnings release. “The first step of this process is the downsizing of our Chinese production plant in third quarter 2020 with the aim to serve only the local market and Rest-of-APAC region. At the same time, negotiations continue with third-party production players in tariffs-free and low-cost countries for outsourced production of unbranded products that will gradually start in Q1 next year.

“Furthermore, as for Natuzzi Editions, we have also decided to leverage within the first half of 2020 on our existing Brazilian operations to serve the East Coast of North America. In addition, negotiations with a third-party player in Mexico continue with the aim to find outsourced production and start serving the West Coast of North America from fourth quarter 2020.”

Click here for the complete Natuzzi third-quarter release.

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Hooker Furniture reports decline in Q3 sales, net income

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MARTINSVILLE, Va. – Hooker Furniture Corp. reported a 7.8% decrease in net sales and a 58% decline in net income for its fiscal third quarter, resulting largely from the loss of a single major customer in its Home Meridian segment.

The company reported net sales of $158.2 million and net income of $3.9 million, or 33 cents per diluted share for the quarter ended Nov. 3. This compares with net sales of $171.5 million and net income of $9.3 million in the third quarter of last year. Earnings per share were 79 cents in the third quarter of last year.

For the first nine months of the year, the company reported sales of $445.9 million, down 7.7%, or $37.1 million from $483 million in the first nine months of last year. Net income totaled $10.06 million, down from $25.2 million in the same period last year. Earnings per share in the first nine months of this year were 85 cents, compared to $2.14 in the same period last year.

“Our lower third quarter sales and earnings were impacted by significantly higher chargebacks and reduced volume from a single large retail customer at Home Meridian,” said Paul B Toms, chairman and CEO. “The lingering effects of 25% tariffs on finished goods and component parts imported from China, along with spotty retail demand that has continued through the first nine months of the year, also negatively affected our performance.”

The company said the sales decline with the same single major customer represented 70% or $6.4 million of a $9 million volume reduction at the Home Meridian segment. It also noted that about $3 million in excess chargebacks from the same retailer drove a $4 million operating loss for the quarter in the segment, which compares with operating income of about $5 million at Home Meridian in the same quarter last year.

The company noted that while sales in its Hooker branded and “All Other” divisions – which include domestically produced upholstery divisions Bradington-Young, Shenandoah and Sam Moore – were down 6% and 4.3% respectively, gross profits and operating income as a percentage of net sales improved compared with last year’s third quarter.

“In total, given the challenging retail environment and the continued impact of tariffs, we were gratified to improve profitability in the Hooker Branded segment and All Other,” Toms said, adding that the Hooker Branded segment achieved a 190-basis point improvement in operating income margin and the All Other achieved a 390-basis point improvement compared to last year’s third quarter.

Toms also noted that the company built its cash position by more than $13 million since the end of last fiscal year and also reduced inventories including discontinued and overstocked items “as we adjusted inventory levels to correspond with our lower incoming order and sales rates.”

Toms said the impact of 25% tariffs on imported furniture from China enacted this summer has generally resulted in a 10% price increase on the portion of the company’s product line imported from China in the Hooker Branded segment, which in turn suppressed retail demand. He added that Home Meridian has had a harder time raising prices in the short term but noted, “Our sourcing transitions to non-tariff countries are on schedule. Company-wide, we expect to reduce the portion of our overall product line imported from China from 40% at the end of our most recent fiscal year to approximately 22% by this fiscal year, with further progress expected in fiscal 2021.”

The earnings report also noted that net sales in the Hooker Branded segment fell $2.8 million, or 6%, in the fiscal third quarter compared with the prior-year third quarter. Hooker case goods in particular experienced lower incoming orders and reduced sales volume driven by lower consumer demand and soft home furnishings retail business conditions. The volume loss was mitigated by higher average selling prices as the division adjusted pricing to mitigate increased product costs and tariffs.

In the upholstery segment, incoming orders were up 10% year-over-year, due largely to a broader product offering including more sofas and sectionals, which the company said have higher average selling prices.

During the third quarter, Home Meridian’s sales fell $9.2 million to $85.8 million, a 9.7% drop compared to the same period last year.

“A $6.4 million sales decline with the single large retailer referenced earlier, along with about $3.3 million in excess chargebacks from the same large retailer this quarter and margin deterioration due to tariffs and increased freight costs, especially on existing programs with large retailers, are the primary reasons for the decrease,” said Doug Townsend, co-president of Home Meridian. “Continued softness at retail across most sales channels and business disruptions from tariffs also contributed to the sales decline.”

He added that year to date, sales are down 9.8%, the majority of which is due to the loss of the same large customer.

Orders in the quarter were down 9.2% compared to the prior year, and backlog was down 10.7% compared to last year.

“Looking forward to next quarter, we anticipate shipments to be down with the single large retailer by approximately $20 million compared to fiscal 2019 fourth quarter,” Townsend said. “However, on a positive note, we expect the balance of shipments to other customers to improve during the quarter and a significant improvement in overall segment profitability. Longer term, we believe the Home Meridian segment is poised to turn the corner towards far better performance beginning next year.

“Both Pulaski Furniture and Samuel Lawrence Furniture gained new product placements with multiple mega accounts at the recent International High Point Market, with the new SLF mixing warehouse instrumental in gaining new placements with smaller retailers that were previously unable to buy large mixed product assortments from HMI via direct container.”

The All Other divisions referenced earlier reported a net sales decrease of $1.3 million, down 4.3% from $30 million in last year’s third quarter to $28.7 million in the fiscal 2020 third quarter. Lower sales resulted from a sales decline in two out of three of the domestic upholstery manufacturing divisions due to soft retail conditions and partially offset by continued growth at H Contract, which specializes in furnishings for senior living and retirement facilities.

The company added that the All Other segment’s gross profit increased in absolute terms and as a percentage of net sales due to lower materials costs and better cost containment. The segment reported operating income margin of 9.6% and 8.7% for the fiscal third quarter and first nine months, respectively.

The company also ended the fiscal 2020 third quarter with $24.5 million in cash and cash equivalents and $31.1 million in acquisition-related debt. It also generated $26.6 million in cash from operating activities and $1.4 million from proceeds received on a note receivable from the sale of a former distribution facility. It also paid $5.3 million in cash dividends to its shareholders, $4.7 million for capital expenditures to expand manufacturing facilities and $4.4 million towards its long-term loans.

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Mattress imports edge up 1% in October, China maintains 1% share

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ST. PETERSBURG, Fla. – Mattress imports edged up 1% in October, an industry report said.

Growth in countries outside of China has been strong and has offset the steep declines seen in Chinese mattress imports in recent months, Raymond James said in its latest import report. It said the growth in shipments from those other countries is “concerning” and could bring headwinds to domestic bedding producers, which have been hoping that steep antidumping duties on Chinese mattress producers would give them a lift.

The U.S. International Trade Commission released the October mattress import statistics over the weekend. They showed that Indonesia, Cambodia and Malaysia recorded significant mattress imports that month. Overall, China remains far down the list of mattress importers, maintaining its 1% share, Raymond James said. Vietnam was the top mattress importer in October, with 266,765 units, good for a 35% share of the market, up seven percentage points from September.

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Meble Polska moves date up to February

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POZNAN, Poland – Meble Polska 2020, Eastern Europe’s largest home furnishings trade show, is set for Feb. 25-28 here. Traditionally held in March, Meble Polska switched to February dates in order to attract buyers who also attend the marathon of trade shows every March in the Far East.

Furniture buyers from almost 70 countries attend Meble Polska each year. In addition to Polish retailers, the show in Poznan draws representatives of most large European buying groups and furniture chain stores, as well as many furniture wholesale distributors and online traders from other continents. In total, around 500 companies and brands will present their offers in 11 pavilions comprising the trade show.

Action on the floors of Meble Polska 2019.

Action on the floors of Meble Polska 2019.

Organizers expect more than 20,000 buyers for this year’s edition.

“In February 2020, the number of visitors is expected to be exceptionally high,” said Meble Polska Director Józef Szyszka in a release. “We already have confirmation that, thanks to the change of date, the highest-ranking furniture buyers, who did not have the opportunity to participate in our fair, will come to Poznań for shopping.”

Concurrent with Meble Polska are the Home Décor Fair and Arena Design event. Arena Design will two new exhibitions presenting the best Polish projects: “Forms of the Future – the Zone of Polish Designers,” which features interesting Polish design projects; and “Polish Design Vision,” a presentation of the best Polish brands with a focus on visionary, bold and innovative design.

In addition to affordable furniture made of composite board, the Meble Polska also will feature products made of solid wood and other high-end furniture, as well as upholstered furniture and mattresses, categories where Poland is an export leader.

Foreign companies, mainly from Eastern Europe, also will exhibit to reach a broader global audience. Manufacturers from Ukraine, for example, will cluster in a space dedicated to that country’s furniture sector.

Online buyer registration for Meble Polska 2020 is available here. Major furniture buyers can use a special service, where, apart from free admission to the fair and catering, they will be provided with help in organizing their arrival, accommodation, an invitation to a trade evening and unlimited access to the Meeting Point area, which provides comfortable working conditions and private areas for business negotiations.

Click here for a video review of Meble Polska 2019.

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Imax Worldwide Home launches collection with Stacy Garcia

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TULSA, Okla. – Home accessory specialist Imax Worldwide Home is launching a partnership with designer and trend forecaster Stacy Garcia that will debut at the Jan. 8-14 Dallas Total Home and Gift Market.

Voluminous Nature will launch under the Stacy Garcia Home brand and will include decorative accessories, wall décor, lighting and accent furniture.

In addition to decorative objects such as boxes, trays and floor vases, it will feature accent furniture pieces including a live edge console table made with acacia and aluminum. Such mixed media themes play a large role in the collection through the use of woods and metals that are complemented with a color palette of “deep ocean, sky blues and neutrals.”

“We’re excited to partner with internationally renowned designer Stacy Garcia, who brings a wealth of experience from the textile and hospitality industries into the home accessory category,” says Arda Bulak, director of marketing at Imax Worldwide Home. “We’re confident that our sourcing and manufacturing capabilities combined with Stacy’s unique vision and design aesthetic will result in a product line that resonates with designers and consumers alike.”

“Imax Worldwide Home appealed to me as a partner given its 35-plus years as a family-owned business,” Garcia added. “They are best in class and work extensively to source and manufacture artisan products from around the globe. I have the utmost confidence in their capabilities to deliver my vision to the trade and consumer audience.”

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Vietnam boosts mattress import market share to 35% in October

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ST. PETERSBURG, Fla. – Vietnam was the top mattress importer in October, with 266,765 units, good for a 35% share of the market, up seven percentage points from September, an industry report says.

Indonesia was the No. 2 source country in October, with mattress imports of 156,147, Raymond James said. Mexico, with 94,822 mattress units shipped to the U.S., was in the No. 3 position, while Cambodia, with 75,932 mattress units shipped to the U.S., was No. 4, and Malaysia was No. 5, with 57,733 mattress units shipped to the U.S.

Raymond James said that in October of 2018, Vietnam, Indonesia, Cambodia and Malaysia had no mattress imports. In that month, China’s share of the mattress import market was 87%.

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Sullens named SVP merchandising at Legacy Classic, LC Kids

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Scott Sullens photo

Scott Sullens

HIGH POINT – Scott Sullens has been promoted to senior vice president, merchandising at Legacy Classic and Legacy Classic Kids. He has been with the company since 2015 as vice president, sales, and was promoted to vice president, sales and merchandising, for LC Kids in 2017.

Sullens began his furniture career selling on the retail floor of Jordan’s Furniture and was a sales representative for Broyhill in several territories from 1998 to 2002. Starting around late 2002, he has held senior sales and marketing positions with Broyhill and Lexington Home Brands and Bentbrook Furniture among others. He was director of the Natuzzi Design Studio in High Point before joining Legacy Classic.

In this newly created position, Sullens will focus on researching and merchandising, working closely with the product development team and source factories. He continues to report to Don Essenberg, president and CEO of Legacy Classic and LC Kids.

“We are very excited about Scott’s heightened involvement in merchandising across both Legacy Classic and LC Kids brands,” Essenberg said. “We feel confident Scott’s extensive knowledge of design, product and retail will strengthen our product offering and increase sales of Legacy Classic and LC Kids in multiple ways.”

The company said that Sullens’ sales responsibilities will move to a new future vice president of sales, a position the company is currently looking to fill.

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Reports: Trade deal could roll back some tariffs on $360 billion in Chinese-made products

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WASHINGTON D.C. – According to news reports, the Trump administration is agreeing to a limited trade deal with China that could roll back some tariffs and cancel nearly $160 billion in new tariffs.

The Wall Street Journal and New York Times reported late Thursday that President Trump met with economic and trade advisors earlier in the day to discuss the agreement, which would potentially reduce tariffs on some $360 billion in Chinese-made products.

The agreement also would cancel planned tariffs on $156 billion in goods including children’s products such as high chairs, booster seats and play yards. This was originally set to be imposed on Sunday.

The Wall Street Journal reported that the deal is contingent on China buying some $50 billion in agricultural products in addition to energy and other goods in 2020. If China reneges on the deal, the tariffs would be reinstated, according to the report.

Some tariff rate reductions are expected to be announced today.

The newspaper reported the deal also calls for intellectual property protection and the prevention of Chinese currency manipulation along with the opening of Chinese financial markets. It also is expected to lead to a second phase deal that would address forced technology transfer, subsidies and other activities of Chinese state-owned companies.

For more details, visit https://www.wsj.com/articles/trump-says-u-s-is-very-close-to-a-big-deal-with-china-on-trade-11576162614.

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Hall joins Sherrill as VP of merchandising, case goods

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Cindy Hall_Sherrill

Cindy Hall

HICKORY, N.C. – Industry veteran Cindy Hall has joined The Sherrill Furniture Companies as vice president of merchandising for case goods.

This role was previously held by Jeff Behmer, who left the company in September to pursue interests outside the industry.

Hall, who started with the company the week of Thanksgiving, was most recently a brand manager at Uttermost. Before that, she worked more than 27 years at Hooker Furniture, most recently as vice president of merchandising.

In her new role, she reports to Thad Monroe, president, and will be responsible for developing case goods for Hickory White as well as product for CTH Sherrill Occasional. Monroe said she also will help source occasional and case goods for the company’s licensee brands.

“We are excited to have her,” Monroe said. “Her background and abilities are perfect match for us.”

 

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S.C. Ports win JOC productivity award

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CHARLESTON, S.C. – The South Carolina Ports Authority has been honored for the Port of Charleston’s performance and overall productivity.

The Journal of Commerce ranked the Port of Charleston No. 1 for overall productivity in the midsize ports category for North American ports. Wando Welch Terminal was named No. 1 for overall productivity in the midsize terminals category.

The awards were presented this week during JOC Events’ annual Port Performance North America Conference in Newark, N.J.

The JOC uses its global database of berth productivity at port terminals to analyze and compare port operations; the publication defines productivity by the average number of container moves per crane per hour, while a ship is at berth.

The first place rankings highlight S.C. Ports’ ability to efficiently move cargo boxes between container ships and terminals.

“Our investments in buying taller cranes, implementing new terminal technologies and hiring highly skilled equipment operators all lend to incredibly well-run port terminals and high productivity for our customers,” S.C. Ports COO Barbara Melvin said.

S.C. Ports’ Wando Welch Terminal recently underwent a three-year refurbishment effort, enabling it to handle both mega container ships and growing cargo volumes. By the end of 2020, Wando Welch Terminal will have 15 ship-to-shore cranes with 155 feet of lift height and 65 rubber-tired gantry cranes.

The Port is on track to achieve a 52-foot depth in Charleston Harbor in 2021, ensuring container ships can access Wando Welch Terminal at any time without tidal restrictions. The Charleston Harbor Deepening Project will also greatly benefit S.C. Ports’ new container terminal, the Hugh K. Leatherman Sr. Terminal, which will open in 2021 and double port capacity at full build-out.

“These monumental infrastructure projects will continue to bring more cargo and business to the Southeast and the Port of Charleston,” SCPA President and CEO Jim Newsome said.

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Manufacturing, style capability have Skyline directing more of its sourcing to Poland

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CHICAGO — Skyline Furniture is looking to Poland as a mainstay of its international sourcing to support and complement its own domestic manufacturing operation.

In addition to manufacturing custom-order upholstery with a focus on e-commerce in Illinois, Skyline also sources finished upholstery and case goods, as well as components and raw materials to feed its own production.

For the past 10 years, the company has sourced upholstery and case pieces in China, and case goods from Mexico, but Poland will play a larger role for those categories as well as components as Skyline seeks more stable sourcing from manufacturers that are farther along the “learning curve” than those in some alternative source countries.

Skyline’s move to Poland, where three source factories are now shipping finished upholstery,  cases and  components to the U.S. market, began in support of major customers who looked to expand their business in Europe and looked production to offer quick service in those markets.

“A year ago, we started looking at Eastern Europe,” said President Meganne Wecker. “Our factory in Chicago focuses on e-commerce, and we were seeing a lot of our major e-commerce customers opening dot.com operations in Europe, where online sales of furniture are still in their infancy. We looked at Eastern European manufacturers to teach them what we’d been doing in Chicago so we could serve the European market.”

Tariffs on Chinese goods and resulting supply chain strains in alternative source countries in Asia ramped up Skyline’s interest in European production.

“We’re looking at transitioning our efforts in China and fast-tracking that to Poland,” Wecker said. “There’s still a piece that’s there for China in the near future, but we see the growth opportunity happening in Poland right now.”

Skyline CEO Ted Wecker, Meganne’s father, said the company explored other options in Europe.

“We looked at Spain, but it was a lot harder to find suppliers there that understand and want to do business in the U.S. market,” he said. “The political situation there is unstable as well, and unemployment is at 25%.”

Meganne Wecker followed up on that, saying Polish manufacturers are farther along the “learning curve” than many in other potential source countries when it comes to serving export markets. Right now, the focus is on adapting their capability to serving the pipeline to U.S. customers.

“Poland has been manufacturing furniture for many years, but they didn’t know the U.S. market,” she said. “A big focus right now for us is laying the foundation for their manufacturers to serve retailers here the way they need to. … It’s more about teaching them to make furniture for the U.S. market, not teaching them to make furniture.”

Ted Wecker noted in addition to their access to a solid transportation infrastructure in Europe, Polish manufacturers already are U.S.-market ready in many ways.

“They have to conform to Carb2 regulations,” he said by way of example. “Germany (where Poland does major business) just passed an even more stringent emissions law. If their product has to conform to Germany, it will conform to U.S. law.”

Meganne Wecker said other new sources had problems in that regard. “We went to Vietnam and felt it would be eight months before we could dream of shipping to retailers here with all the manufacturing and social audits we required.”

She added that Polish manufacturers are in better shape to address trending styles.

“In design, they’re way ahead of a lot of places we import from, because Europe is father ahead in fashion,” she said. Polish manufacturers are “far more advanced for what we’re looking for than any of the other countries we’ve dealt with.”

Beyond Skyline’s optimism about Polish manufacturers’ ability to play a major role in its international operations, the company has family ties to the country.

Meganne Wecker’s great-grandfather immigrated to the United States in 1898, where he founded a furniture business in Chicago. That business closed during the Great Depression, but her grandfather and Ted’s father, Norman Wecker, returned from World War II to found the company that became Skyline Furniture.

Skyline’s move to Poland “closes the circle” of the family’s presence in the furniture industry, according to Meganne Wecker.

“The irony of ironies is that one of the factories we’re dealing with is about five minutes from where my great-grandfather immigrated from,” she said.

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