Leather players watching merger closely
Joan Gunin -- Furniture Today, March 6, 2005
High Point — Leather upholstery resources are watching closely the proposed Federated-May department store merger.
LeatherTrend, Natuzzi and Chateau d'Ax are among leather makers selling to both retailers.
Executives fear the merger could lead to stores closings, reducing the floor space devoted to product. Budgets for advertising, circulars and catalogs also might wilt.
"The pressure we feel is that the bar is going to be raised again on expectations and product development," said Fred Starr, president and CEO of Natuzzi Americas. "Then the core (product) groups become essential. Each one must be very well thought out."
He said the stores may want to carry smaller inventories, putting more pressure on suppliers to ship quickly.
"They want to spend more on their needs at the front end of the business, not the back end," Starr said.
Neither Federated nor May has Natuzzi galleries.
At Chateau d'Ax, Harry Cierler, director of North American operations, said, "We hope this merger will bring stronger furniture business to the forefront and make the consumer more furniture savvy."
At American Leather, which sells both stores, President Cary Benson said, "I don't know if anything will change. My assumption is that (Federated) will initially focus on stores that could be changed from May's to Macy's."
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Leather players watching merger closely
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