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DeCoro to liquidate

Leather producer stops shipping

By Joan Gunin -- Furniture Today, January 26, 2009

HIGH POINT — China-based leather upholstery producer DeCoro has stopped shipping and has announced that it will pursue voluntary liquidation.

CEO Luca Ricci last week confirmed the shutdown of the company's two plants in Shenzhen, China, where DeCoro had produced Italian-style leather upholstery and motion seating.

When he launched DeCoro in 1997, Ricci was credited with revolutionizing the leather upholstery industry by basing his operations in China, resulting in huge savings on labor. A number of other manufacturers, including leather giant Natuzzi, also set up production offshore to cut costs.

“DeCoro is currently in consultation with our attorneys and accountants to determine a go-forward plan,” said Heath Corso, executive vice president of sales and marketing. “Our U.S. office (in High Point) is still in operation at the present time to support our dealers through this process. Arrangements will be announced once they have been completed.”

A few of the 13 High Point employees have already left the company, and others will be let go as the dissolution proceeds.

Ricci said that while it will liquidate, DeCoro is not broke.

“The assets are much bigger than the liability so we think we can make money and pay all our suppliers,” he said. “We want to be correct and pay everybody.”

And while he is down, Ricci may not be out of the industry — he reportedly is exploring the viability of operating an entity in the United States or possibly restarting the business elsewhere. He did not comment on this possibility.

At its peak in 2006, DeCoro had production facilities covering 2.9 million square feet and global sales of about $300 million.

In recent years, the company lost big retail accounts with the closing of Levitz, Wickes and others.

DeCoro continued to struggle in 2008 because of tough global business conditions and reduced access to capital — despite announcing in November that it had reached an agreement with China Construction Bank to provide capital for operations.

DeCoro's history at a glance

1997 — Luca Ricci launches DeCoro.
1998 — Opens U.S. offices in California. Moves offices to High Point in October 1999.
May 2000 — Jeff Baron leaves Natuzzi to become DeCoro president. He leaves in May 2002.
November 2002 — Dino Di Luca, director of North American operations, leaves DeCoro.
April 2003 — Laurence Crink named executive vice president of sales.
October 2004 — Announces plans to file in Hong Kong to make a public stock offering in 2005, but offering is never launched.
October 2005 — Crink leaves company.
January 2006 — Plant in China is expanded.
February 2006 — Heath Corso named executive vice president of sales and marketing.
2006 — Annual sales peak at about $300 million.
April 2008 — Second China plant opens.
April 2008 — Buys freestanding showroom on Main Street in High Point, but never moves in.
January 2009 — Ceases operations and announces voluntary liquidation.

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DeCoro closing down leather production

Jan 16, 2009

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