Some importers make contingency plans
By Thomas Russell -- Furniture Today, November 10, 2003
High Point — With the antidumping petition filed, some importers with ties to China are preparing alternate strategies while others simply are taking a wait and see approach.
Either way, many believe the petition will fail in its goal of limiting imports, given the U.S. furniture industry's increasing reliance on global sourcing partners.
"Basically, we don't feel it's going to be successful," said Harvey Dondero, president and chief executive officer of Universal Furniture International, which imports all its product from China. "There is no need to pursue any strategy in our minds. We just will continue doing what we are doing, which is not dumping."
Chinese manufacturers and importers also are pursuing legal means to contest the petition that a group of U.S. manufacturers, the Committee for Legal Trade, filed with the International Trade Commission on Oct. 31.
Michael Amini, chairman and CEO of AICO, said such measures will help tell the importers' side of the story.
That said, he also believes China is only the tip of the iceberg for imported bedroom furniture.
"There are a lot of bedrooms coming out of other countries as well, which is not going to stop," he said. "What are they going to do about those other countries?
"My personal opinion is that nothing is going to be accomplished even if this case succeeds," he added. "For the first five or six months, things will change a little bit, but every particular importer in this situation has a plan B."
He said AICO has an alternate plan, but declined to reveal specifics.
If anything, importers have some time on their side. The earliest that preliminary duties on Chinese bedroom furniture would be imposed is in the spring, about five months from now.
One possible strategy would be to build up inventory in U.S. warehouses between now and then — but that isn't something many importers may be willing to pursue.
"Inventory is a serious thing to invest in," said Mirador Group International Vice President Dan Wistehuff III. "You would have to get many more times what you are already buying and filling up warehouses all over the place. Until I see more about how this is going, I don't see us building up inventory."
For now, Mirador will continue sourcing from China and the Philippines, which according to Wistehuff can provide goods that just aren't available from U.S. plants.
"You can shut the door on all of Asia and you will raise prices for the consumer, but you will also limit their choices to some degree," he said. "The factories here (in the United States) do not have the same capabilities the factories there do. From our perspective, it's a little more complicated than price."
Joe Elmore, marketing and sales director at HomElegance, agreed that the situation is about more than price.
"It's still a demand business that is driven by the customer," he said. "And we respond to customer needs whether it be about style, fashion or programs to support the flow of goods. It's not just price. We haven't shopped price in a long time."
In addition to China, the company sources from Malaysia, the Philippines, Brazil and Taiwan. But even though it has those alternatives, he said the company is "firmly intent" on staying in China.
"We are in China because we are getting consistent quality and value-laden product with features and styling you can't get anywhere else," said Elmore. "It's fashion, and quality and consistency driven."
