U.S. furniture sources see opportunity in Mexico City
By Powell Slaughter -- Furniture Today, January 23, 2006
Mexico City — Consumers here know and like U.S. furniture brands and their tastes are not too much different from their northern neighbors, creating a real opportunity here for U.S. furniture sources at medium to high price points.
Dedicated stores for Bernhardt, Broyhill, Century, Drexel Heritage and Thomasville, and retailers highlighting suppliers such as Baker, Maitland-Smith, Henredon, Hickory Chair and Theodore Alexander, are tapping a ready consumer base in Mexico's capital. While that base is limited to a small percentage of the population, it's large enough to be a lucrative market.
It's all a matter of scale in this city of contrasts, where Park Avenue opulence stands across town from poverty that would make many poor U.S. citizens count their blessings. Maybe 5% of the city's 30 million people fall in the affluent category, but that's still a high-end consumer base of 1.5 million.
Well-heeled consumers tend to frequent ritzy shopping districts like Polanco — Mexico City's version of Rodeo Drive, whose storefronts offer a roll call of consumer brands like Louis Vuitton, Banana Republic and Rolex — as well as Reforma, San Jeronimo and the burgeoning residential developments on Mexico City's rim, such as those around the Bosque Real Country Club to the west.
"In Mexico, you have a Rolex, a Casio, or you don't have a watch," said David Stamey, director of the North Carolina Department of Commerce's Mexico trade office here, describing the highly segmented market for consumer goods.
When it comes to furniture, U.S. brands carry value, said retailers who've been serving the market for a while.
"The market in Mexico for U.S. furniture is growing so much," said Regina Hammeken Talavera, a designer at Century Furniture & Design, the exclusive Mexico City distributor for Century. The store also carries other lines, including Vanguard, added in December. "The consumers here have confidence that it's well made. We have some good manufacturers in Mexico, but higher-end consumers prefer the overall better U.S. quality."
Brothers Guillermo and Eduardo Isunza represent Bernhardt throughout Mexico. Their 8,200-square-foot store in the Del Valle area is the company's exclusive Mexico City dealer.
Guillermo Isunza said U.S. furniture brands, particularly those associated with North Carolina like Bernhardt, generate positive word-of-mouth.
"Consistent quality of the furniture is the key thing, where the quality of our domestic furniture can depend on the mood of the varnisher on a particular day," said Isunza. "Our customers know they'll get the quality they see in the store, and the American furniture has a good reputation for ergonomic comfort here."
He added that beyond Mexico City, U.S. citizens with second homes or retirement homes in places like the resort city of Cabo San Lucas represent another source of demand for U.S. brands.
The Isunzas opened their store in 1981, concentrating at first on domestic and Italian contemporary goods.
"When NAFTA (the North American Free Trade Agreement) came into effect, we turned our eyes to the U.S. and Canada," Guillermo Isunza said. "We went to our first High Point market in 1991 and we've attended every one since 1993. We needed more quality and more contemporary styles.
"We were one of the first to promote a U.S. brand in Mexico."
Thomasville is another well-known U.S. brand, and also benefited from its licensed line associated with Ernest Hemingway, who is as famous here as in the United States.
"In general, people have a very good impression of the brand quality, and it's been very well accepted in Mexico," said Ulises Ramírez Almeida, manager of Thomasville's dedicated store in the Polanco district. "We have customers who've decorated their entire home with Thomasville products."
Preference for U.S. brands extends into more moderate price points, said Eric Domenge, who represents Broyhill and Thomasville in Mexico. Broyhill just opened its second dedicated Mexico City store in December, a 5,000-square-foot, two-story location in the Insurgentes Sur neighborhood, which joins an 11-year-old, 9,000-square-foot Broyhill gallery in Mexico City.
Domenge said sales for the Mexico City stores of Thomasville and Broyhill have grown 25% in the past five years.
"American furniture is built better than domestic furniture at similar price points — it's technically superior," he said. "Most Mexican manufacturers don't have that level of manufacturing technology or sophistication of finish. Better, more comfortable upholstery cushioning is another point in favor of American furniture."
That reputation gives Mexican consumers the confidence to buy out of a catalog, a benefit for retailers in an urban market where floor space is at a premium.
"Seventy percent of our clients purchase through catalog sales, 30% through what's floored in the store," Domenge said.
Keys to success in Mexico include training and promotion — even the high-end stores often run "no-no-no" financing offers.
"We have to be in constant promotion — we offer no interest for 12 months in the Broyhill stores, six months at Thomasville," said Domenge. "Second, since we're offering special services to customers like custom orders ... we have a very long training program for our salespeople, and we get a lot of support for that from Broyhill and Thomasville."
