Primex focuses energy on Latin American goods
By Powell Slaughter -- Furniture Today, March 6, 2005
New York — A host of furniture importers draw upon Latin American sourcing, but many count the region as just one arrow in a quiver full of options.
New York-based Primex, however, decided early on to be a go-to player in Latin America for retailers, distributors and catalog merchants. Incorporated in 1972, Primex sources furniture, home textiles, tabletop accessories and apparel in Argentina, Brazil, Chile, Colombia, Guatemala, Mexico and Peru.
"We liked the idea of our lines being a product of the Americas," said Stewart Paul, president. "When Asia came on line, we had to make a decision. Were we going to be one more company sourcing in Asia, or maintain our expertise in one part of the world? We made the decision to be experts in Latin America."
Wood furniture represents 60% of Primex's business, and is the company's fastest-growing segment. Primex sources around 55% of its goods in Brazil; 23% in Chile; and in descending order, Mexico, Columbia, Argentina and Peru.
Primex sources ready-to-assemble products for Home Decorators, and case products for Pier 1, Pier 1 Kids and Williams-Sonoma. Other customers include Ballard Design, Front Gate, Orvis, Land of Nod and JCPenney.
Primex also sources the P.J. Kids youth line, but brings in those products from Asia in order to avoid possible conflicts with other customers.
Sourcing savvy
Primex got its start as an importing and manufacturing consultant.
"We thought there was an opportunity to move from consulting into sourcing product," Paul said. "We took over the Brazil sourcing offices in São Paulo from one of our clients when they closed operations there."
With so much furniture business heading to Asia, why did Primex make a commitment to Latin American sourcing?
"First, there's an abundance of raw materials," Paul said, referring to the many Latin American plants, particularly in Brazil and Chile, that manage their own timber supply.
"Second, there was a European-leaning view of styling and doing business, and it's more or less the same time zone, so there are fewer communication issues. Labor costs are high relative to Asia, so their competitiveness is based on readily available raw materials, the skill level of their workers, and the productivity of their plants."
He said private-label work is of particular import for Latin America's future in furniture.
"They offer very unique looks and different manufacturing capabilities. While the product often is mass-produced, it doesn't look that way," Paul said, noting that Latin factories, where minimum-orders are typically lower than many Asian plants, offer particular opportunities for manufacturers and retailers seeking distinctive product. "If you want to do private-label programs, you have a degree of confidence that you really do have an exclusive."
Primex doesn't put all its eggs in one sourcing basket — witness Brazil, where the company deals with 50-plus plants.
Variety of options
"We try not to sell the capacity of any one factory," Paul said. "Our relationship is really with the client, trying to place the product with a suitable manufacturer to meet their specifications for quality, price point and quantity."
Primex's longstanding presence in Brazil helped it weather logistical problems last year related to that country's burgeoning export economy.
"With double-digit growth in exports not only of furniture, but also commodity products, that's put enormous strain on the infrastructure in Brazil, and both private and government investment lagged, because they didn't know if this growth was long- or short-term," Paul said, adding that those investments are being made. "They're upgrading facilities at all ports. Shipping lines from Asia have actually shifted resources into the market."
Primex's established presence in Brazil helps assuage such problems when they arise, he said.
"We were fortunate last year in getting most of the containers when we needed them, but we're on the ground there, having lunch with the people running the shipping companies," Paul said. "We had some delays, but we actually picked up a couple of customers last year who were having problems getting containers. When there's a container shortage, it's a question of who gets them."
The recent revaluation of the Brazilian real has impacted business, but Paul still anticipates double-digit increases in Primex's Brazilian exports to the U.S. market this year, since his manufacturers are holding prices on existing projects.
"We insist manufacturers hold the price for a full year," he said. "They've made big investments in their plants, and they don't want to lose business."
-
Primex focuses energy on Latin American goods
Mar 11, 2005
VIEW ALL GALLERIES
