Glut takes shine off Chinese imports
Carole Sloan, Senior contributing editor -- Furniture Today, March 16, 2009
Well, it looks like the vaunted Chinese manufacturing bubble is about to burst — or perhaps it already has.
Because of a number of factors, the market is becoming glutted with furniture that no one wants.
It's not just the retailers that have gone out of business, leaving behind warehouses full of furniture, but retailers still in business who got caught up in the mystique of offshore direct importing and are sharing the current pain.
And then of course, there is the economy — both macro and micro — that has pushed down demand globally.
The overall result is that there is more furniture hanging around, unloved and unwanted, than the domestic or global market can absorb — much less at any price point that will create a profit.
Retailers across the country are finding that the lure of direct imports is not so glittering when warehouses get backed up to the hilt with now-unwanted goods.
And of course, this is bound to have a huge impact on the upcoming High Point Market. Open to buy will clearly be curtailed because of the economy, but even more so to compensate for all the unsold imports sitting in warehouses.
And in many cases, manufacturers are in a similar boat with a season-plus of retailers going out of business, miscalculated demand and wrong guesses on style.
The situation has had an obvious impact on the Chinese supply chain, in particular, with the epidemic closing of factories.
But beyond that, there is a positive note: The minimums in product quantities already have dropped, and more should follow.
But still with all the overages, the question once again is — who eats it?
