Go south, growth-hungry high-end furniture sources
Powell Slaughter, Case Goods Editor -- Furniture Today, December 18, 2005
U.S. furniture companies, especially those at the high end, might want to think long and hard about our neighbor to the South as a place to grow their business.
I just returned from a tour of retail operations in Mexico City, home to a sophisticated, brand-aware consumer segment that expects the best in dining and entertainment, not to mention furniture. The wealthy there might comprise "only" 5% to 10% of the population, but considering the city has around 30 million people ... You do the math.
First, a tip of the hat to David Stamey, foreign trade representative and director of the North Carolina Department of Commerce's office in Mexico City. In addition to the Mexico debut of Henredon's Barbara Barry licensed collection, he arranged an itinerary that showcased retail success stories in Mexico's capital for U.S. furniture brands with North Carolina operations.
David speaks Spanish as easily as people born to the language, and lived in Spain after college while playing European league basketball. He's run the N.C. Mexico office for eight years.
Recent trends toward more contemporary case goods lines bode well in Mexico. Stamey compiled a style survey for the Mexican market, which he presented at the October market to members of the North Carolina Furniture Export Council. In a nutshell, the survey concluded that consumer tastes in Mexico are decidedly in favor of cleaner, simpler lines.
We visited Mexico City stores dedicated to, or carrying strong representations of, U.S. brands like Bernhardt, Century, Lexington, Thomasville and others. A walk through the Santa Fe Mall, Latin America's largest, indicated the taste for contemporary permeates all price points, with mid-range retailers once strongly traditional revamping their floors to offer sleek, modern looks.
More important, from what retailers I visited told me, U.S. brands have a strong reputation in Mexico for consistent quality that is of particular appeal to the relatively small number of middle-class and high-end consumers here who can afford our goods. Better comfort, much more sophisticated finishes and better style are seen as major differentiators for U.S. brands.
Back in the salad days of the 1990s, the U.S. market was low-hanging fruit for domestic furniture resources, whether manufacturers/distributors or U.S.-based importers. With U.S. market growth in the low single digits in recent years, and an export-to-import ratio that's woefully out of balance, let's consider broader market horizons, no matter where the product comes from.
By the way, I did the math. Mexico City alone offers a well-off consumer base of at least 1.5 million people. Monterrey has a similarly proportional base of potential buyers for U.S. furniture brands, and the growing number of U.S. citizens retiring to Mexico or establishing vacation homes there offers another potential source of business.
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