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Next wave of imports may be fabric upholstery

By Jerry Epperson -- Furniture Today, April 14, 2002

George Carlin used to talk about the seven dirty words you couldn't say on network television. For many in our industry today, you can add another — imports.

By our estimates, 42% of the wood furniture sold at retail in the United States last year was imported. In 2001, domestic wood shipments were down, imports from all nations were flat, and imported wood furniture from China was up 10%. No surprises there.

We tend to ignore the fact that 12.7% of the upholstered furniture sold at retail in the United States last year was imported. Again, domestic upholstery shipments were down, all imports were flat but imported upholstery from China was up 30%. Yes, 30%.

But that number is misleading. By our estimates, 82% of imported, fully-assembled upholstery was leather, leaving about $260 million of fabric upholstery, with most of that coming from Canada and, to a lesser degree, Mexico. Even there, you could argue the strong U.S. dollar is part of the reason. Just to be clear, we are talking only about fully assembled upholstery, excluding all cut-and-sew or pre-sewn covers.

That means that only 2.8% of the $9.45 billion in fabric upholstery sold in 2001 was imported. So, one segment of our industry is safe and largely will be sourced only from North America. Agree?

Sorry, but that's not going to be true for long. Chinese upholstery fabric mills have been gearing up for the last three years and already are having some impact in the United States. They are rapidly learning our styles and quality requirements.

Just as we have been seeing U.S. manufacturers, retailers and agents sourcing leather upholstery aggressively in China, Thailand and other Pacific Rim nations over the past two years, you will begin to see fabric upholstery coming in soon. Samples are already here.

Should you be concerned? Yes, if you make fabric upholstery. But maybe not if you have styling leadership, state-of-the-art operations and great distribution. Look at your operations today and honestly list your competitive advantages.

In our opinion, there are some inherent advantages domestic manufacturers enjoy, including not having our product riding in the innards of some ship for six weeks. Our seating products reflect the fashion aspect of our industry more than some other furniture categories, and consumers tend to be more fickle in their fabric tastes than with other categories like bedroom or dining room, where a popular style and finish can last for decades.

Perhaps the point of all this is that our upholstery makers and retailers can learn some valuable lessons from other furniture and textile categories before the importing of fabric upholstery becomes commonplace. Do it now.

Author Information
W.W. "Jerry" Epperson is a managing director of Mann, Armistead & Epperson, 119 Shockoe Slip, Richmond, Va., an investment banking and research company that specializes in the furnishings sector.
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