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Leather holds its own

Steady stream of buyers a welcome sight

By Joan Gunin -- Furniture Today, January 26, 2003

San Francisco — Leather upholstery manufacturers, well attuned to current events ranging from the economy to the possibility of war, welcomed a steady stream of Western buyers to their showrooms here last week.

Exhibitors including Asian importers Homelegance, Emerald Home Furnishings and Diamond Sofa had more introductions on hand than usual. Their lines were bolstered by the spillover of samples originally intended for the High Point market last October but held back by the West Coast dockworkers' job slowdown in September.

The labor strife forced Homelegance to delay the full rollout of its new presentation, The Art of Living Leather, until this market. The collection included seven sofa frames, three club chairs, three recliners and one motion piece.

"We never slow down," Joe Elmore, director of sales and marketing for Homelegance, said of his showroom traffic. "It just gets busier."

Emerald also had some holdovers originally set for High Point, in addition to products that were in the works for San Francisco.

"This really is a 'double market' for us," said President David Beckmann. As for business, he said it's "good, not great."

"We always look for things to be better," he said. "While our strongest suit is casual dining and occasional, our leather (introduced here six months ago) is going out real fast."

Diamond Sofa displayed 40% more product than usual stemming from its October shortfall, said President Kevin Yip.

Palliser, which opened a new 16,000-square-foot showroom at the San Francisco Mart, is looking to its cut-and-sew capability to help it achieve its planned business expansion.

"Our combination of cut-and-sew in Mexico, Brazil and China, along with our assembly capabilities in Canada, allow us to compete with Asian imports," said Roger Friesen, Palliser's senior vice president of sales, merchandising and customer relations.

In addition, Dan Toews, merchandising manager for stationary leather, said Palliser's custom-order program is thriving. "As a full leather resource, we are continuing to expand in those area as well as with more entrepreneurial frames — with delivery in four weeks or less," he said.

Flexsteel's special order business in leather also is healthy, said Keith Feuerhaken, vice president of sales. He added that the company's total sales also have been up in double digits over the past quarter, on average.

To help with special orders, Flexsteel unveiled a new selling tool here, a series of point-of-purchase flip boards for use on retail floors to illustrate the variety of leathers available on each of four best-selling sofa frames.

Leather sales also have been healthy for Lane, said David Wormald, merchandise manager.

"Business company-wide continues to be good and leather continues to be exceptional," he said. "They have upped my weekly (sales) quota and we are hitting it. We are fortunate."

Broyhill, meanwhile, lowered its usual entry price point from $1,199 to $999 with a contemporary sofa made offshore.

"We are responding to the continuing deflationary trend," said Mike Delgatti, senior vice president of upholstery. "Volume price points are a moving target and we are responding accordingly."

At Omnia, Peter Zolferino, chief operating officer, said, "The economy is obviously shaken. There is more concern about holding onto jobs, but last year was worse with the uncertainty about Enron and WorldCom. It's cyclical: business can't be good forever."

"January has started out stronger," Zolferino added. "Dealers are optimistic but money is still an issue."

Kerry Lebensburger, president of Ashley's upholstery division, said the retail business lately has been driven by stores offering consumer financing deals. "Those are the people who are kicking it," he said.

Ashley introduced one contemporary upholstery frame here, dressed in either leather or microfiber. In microfiber, the four-piece group (sofa, loveseat, chair, ottoman) has a target retail price of $999.

In the temporary booths, newcomers included Anna's Leather Upholstery, an Argentine manufacturer representing a partnership between Gustavo Regueira, its executive director, and Alfredo Diana, president of tannery Oclas Leather.

Also new in leather is Oregon Rustics. The company's owners, the Granger family, had a timber business for 30 years before venturing into furniture in 1998 with case goods and log styles. Their upholstery is Mission style with exposed wood frames of distressed pine, alder or oak, with leather-covered frames retailing at $2,400.

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