Leather fights off weak dollar
By Joan Gunin -- Furniture Today, April 4, 2004
HIGH POINT — Leather upholstery manufacturers are gearing up for market with international sourcing programs, new cover choices and other innovations.
In part, they are trying to overcome the distraction of the weaker dollar, which is making some imported upholstery more expensive to U.S. buyers. Manufacturers showed previews of their April lines to retailers at premarket here last month.
U.S. sales of Italian producers in particular are taking a beating from the stronger euro. But others, like Jaymar in Canada and LeatherTrend, with production in Mexico, buy hides from Italy and also are affected.
Natuzzi's recent announcement of a 5% price increase has led others to consider following suit.
After making some adjustments last market because of the dollar, Italian Leather Seating plans to hold the line on prices this market, tweaking item-by-item as necessary. "Our business is maintaining very well," said President Dean Wilkerson.
ILS will usher in 18 groups from Caliaitalia and 12 promotional groups from DeLuca.
At Jaymar, Gary Zuckerman, vice president of sales and marketing for the U.S., said, "We have encountered a double whammy with the purchase of leathers from Italy, and the second effect on the weakening U.S. dollar vs. the Canadian dollar. Leathers are costing more to acquire and we lose (money) again when we sell the finished product."
He said the company will "address pricing issues between now and market with a realistic decision."
Jaymar is extending its point-of-purchase program for stationary and motion with a medley of styles, configurations, leathers and wood finishes, all under a uniform pricing strategy.
Fellow Canadian producer Palliser has resisted raising prices on existing merchandise. "We've managed to hold pricing in a difficult time," said President Art DeFehr.
"Business has been OK," said Jim Scully, merchandising manager, leather. "We've been sharp on our prices."
Palliser is adding five better leathers, while reinforcing its microfiber covers.
Chateau d'Ax will unveil 30 frames and two new leathers offering "extreme value," said Harry Cierler, director of North American operations. "We will always remain competitive and do what we need to do," he said.
In addition to focusing on its high-end Pasquale Natuzzi Collection, Italian manufacturer Natuzzi has several additions. They include goufragge, a heavy-backed midpriced microfiber cover with a nubuck feel and a rumpled texture; microfiber slipcovers, specific to chosen frames; and seven leather articles, including buffalo, a mottled look, said Joe Mussallem, strategic product manager for Natuzzi Americas.
Nicoletti's focus will be on stationary leather this market with an offering of 40 frames, featuring three-piece promotional sets starting at $1,599, said Tiziana Catalano, U.S. sales manager.
Divania is bringing out new leathers on existing sofa frames. "This is part of our ongoing conversion to all top-grain leathers, which has been favorably accepted by our customer base," said John Sellers, president of the U.S. arm.
Flexsteel is offering Latitudes, its first offshore program from China, consisting of a sofa, sectional and club chair/ottoman groups. The seating, offered in two colors in covers from Leather Miracles, ranges from $1,299 to $1,499. "We are not trying to run after the bottom line," said Lee Fautsch, national sales manager.
American Leather has picked up the Stetson license formerly held by Vanguard, while HTL International, Incanto Divani, Interline Italia, Natale and Niroflex are among those also bolstering their lines.
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