La-Z-Boy braces for duties
By Jeff Linville -- Furniture Today, April 5, 2004
HIGH POINT — La-Z-Boy Case Goods Group is preparing for possible antidumping duties with increased warehousing and a temporary price freeze.
Case Goods Group companies, including Kincaid/Alexvale, American Drew, American of Martinsville, Hammary, Lea Inds. and Pennsylvania House, have strategies in place in case duties are imposed on bedroom furniture imported from China.
Preliminary duties could be added to the cost of imports as soon as late April. The U.S. Department of Commerce and International Trade Commission are weighing the issue.
Jack Richardson, president of Lea Inds. and American Drew, said his companies have been increasing their U.S. inventory of Chinese goods in advance of any federal actions.
"For the imported products, we intend to hold the price until the Monday after the Labor Day weekend," said Michael Foster, president of Pennsylvania House.
"Our main business is still occasional, and that's not affected," said John Labarowski, president of Hammary Furniture. The company imports only a couple of bedroom groups and will maintain prices on those goods through Labor Day as well, he said.
Richardson said La-Z-Boy privately has established a dividing line regarding duties. If the duties are less than this benchmark, then Lea and American Drew will continue to operate as usual but with a slight increase in price. If the duties are higher than this figure, more dramatic actions will be taken.
Goods made in China could be moved to another nation or even brought back to U.S. factories. Labor-intensive carving and hand-painted designs wouldn't be feasible domestically, but many of the items could be built here, although at a higher cost, Richardson said.
Foster said Pennsylvania House has about 400 bedroom pieces in its line, but only about 70 have been made in China. Since the antidumping issue arose, some of those 70 pieces already have been moved stateside.
Another strategy has been to seek sources outside China. American Drew's new East Haven collection comes from Honduras. Choosing that source country, however, had more to do with using the clean, knot-free Caribbean pine indigenous to the region than avoiding possible duties.
Pennsylvania House also is importing Caribbean pine from Honduras for its Summer Retreat collection. Some pieces are being built domestically, so the company brought in the pine to maintain consistency, said Ron Fuhrman, vice president of marketing.
Kincaid is introducing three collections made primarily in its Hudson, N.C., facility. The company is sourcing the bed, but making the dresser and chest, said Todd Hady, vice president of retail operations.
Much of the company's Laura Ashley line is imported, but overall Kincaid is still about 70% U.S.-made, Hady said.
