Price hike likely in motion
By Furniture Today Staff -- Furniture Today, April 19, 2004
High Point — If you see dealers and producers talking in hushed tones in motion upholstery showrooms this market, there's a good chance they're discussing the unmentionable — wholesale price increases.
No producer is willing to admit publicly that they have raised prices, but given the substantial hikes in raw materials prices in recent months, they may be left with few other options.
"We haven't had a price increase yet, but we may have to do it," said Chuck Tidwell, product manager at Franklin. "Of course, nobody wants a price increase."
Tidwell and other executives said steel mechanisms, the costliest item in a recliner, have incurred double-digit price increases as steel prices have surged in the United States. In addition, producers have seen significant hikes in foam cushioning and lumber.
"The price increases are real," said Don Hunter, vice president of merchandising at Catnapper. "Everybody has been asking about it."
Several executives said privately that the hikes could all but eliminate the $299 retail price point for recliners, and even affect goods that have been retailing for $399. At the very least, dealers wanting to hit those popular opening price points would have to work with shorter margins, producers said.
