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.
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It was a pity to see this happen. If they have risk management in control, I think they can avoid the impact of the turmoil. More important they should put more effort to understand the trend of the uprising spending power of the Chinese market for offsetting the loss of N American and European market. But I support the idea of Italian craftmanship but with the labour cost of China.
Benny - 2009-15-6 11:08:33 EDT -
Why Luca and the managment not stand up and solve the problem. The company is not broke but death.
Hopeless - 2009-6-2 06:42:36 EST -
good riddance what a scammer he was slob and stupid letting this happen company was always under staffed and run by an idiot who knew nada of the mkt place ...designs were stolen and never paid for, reps were used like kleenex and showed the door often w out care ....they were a disaster to work with and left a hole only in the toilet they came from.......good bye
chong feng - 2009-2-2 11:34:45 EST -
If the assets are much bigger than the liability why still do not pay the salary.
Employee - 2009-28-1 21:16:30 EST
DeCoro obtains new financing
11/25/2008DeCoro obtains new financing
12/07/2008DeCoro closing down leather production
01/15/2009DeCoro USA winds down operations
03/04/2009
