Single-source relationships provide stability
By Thomas Russell -- Furniture Today, March 19, 2006
High Point — High Point— U.S. furniture importers not owned by Chinese manufacturers typically have several source factories in China and Southeast Asia, but some independent importers have chosen to work with a single manufacturer.
What they like most about such a relationship is the stability and quality they can get from a reputable factory, particularly one that does OEM business with other furniture importers. The importers also use the factory's warehouse space, which helps provide speedy delivery of full and mixed containers.
A.R.T. Furniture
A prime example of this sourcing model is case goods importer A.R.T. Furniture, which linked up about three years ago exclusively with Markor International Furniture, with plants mainly in northern China. A.R.T. CEO and founding partner Ed Grund said it was important for the fledgling company to deal with a reputable manufacturer.
"It was important to us to have the quality and to have the consistency in the product that Markor develops for us," he said, adding he is particularly impressed with Markor's finishing capabilities and consistency of delivery. "We wanted people who knew how to build quality furniture, and Markor fit the bill."
Huntington Furniture
Huntington Furniture sources case goods and occasional exclusively from Omexey Enterprise, which has a plant in Dong Guan, China, and is adding another in Vietnam, each totaling over 1 million square feet.
"Everything is being done out of one source," said Huntington CEO Mike Brundage, noting that Huntington has invested in the manufacturing operations. "I think it's very consistent in terms of quality as well as reliability and delivery."
U.S. antidumping duties are still a concern for Chinese bedroom producers and customers such as Huntington, which uses the bulk of Omexey's China capacity. Brundage believes Huntington could move production to Omexey's Vietnam factory should the Chinese plant get hit with higher duties after administrative reviews.
JT Michael Designs
Case goods importer JT Michael Designs deals with a single wood furniture manufacturer in China, Alexandre International, which has a 2 million-square-foot plant in Shenzhen.
JT Michael President Michael Foster said he chose Alexandre based on its work with other upper-end customers. He also has known the company's principals for about 10 years and felt comfortable with the relationship.
In addition to three, 18-step finishing lines that are about a mile long each, he said the plant has a veneer department that is skilled with inlays and marquetry.
"I could go to 10 other factories and get some better prices on certain things," he said. "But I put a high price tag on quality and service."
Kinwai U.S.A.
Union City, Calif.-based case goods and leather upholstery importer Kinwai U.S.A. has a sole-source relationship with a company-owned factory in Jiangmen, China.
Jiangmen Kinwai Furniture and Decoration Co. has a 1 million-square-foot plant built in 2003 and produces contemporary style bedroom, dining room, occasional and home office furniture and leather upholstery largely for the U.S. and European markets. The plant also does some OEM business, but it mostly does production for Kinwai USA.
The plant, with high-tech manufacturing equipment from Italy and Germany, was a huge investment for Kinwai, but officials believe the investment is paying off.
"A lot of people who come to China can now source their own products," said Kinwai Operations Manager Kelvin Yip about the OEM opportunities the factory affords. "They can buy containers directly from the factory, and we also have an office to take care of customer service and support in the U.S."
The California office also handles product design, Yip added.
New Classic Home
Case goods importer New Classic Home Furnishings deals exclusively with Chinese manufacturer Yihua Timber. Yihua Timber has a vertically integrated logging, milling and furniture manufacturing operation in the Guangdong province of southern China that is expanding to 3.6 million square feet of manufacturing, warehousing and administrative space. The operation exclusively will produce New Classic's bedroom, dining room and youth furniture line, and also handle New Classic's own OEM business.
Sales Manager Robert Jarrard said the sole-source arrangement between New Classic and Yihua provides stability that goes beyond a typical arms-length relationship with a manufacturer, and enhances the ability to develop new products.
"Because we are the sole-source partner, there is less inclination (for the factory) to look for other customers and, in our case, to look for other factories," he said. "Any new relationship is replete with unknowns."
The long-term commitment, Jarrard said, allows New Classic to move into new categories to sustain growth. "The relationship we enjoy with Yihua has never been better," he said. "We can go from concept to container in a matter of weeks."
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