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Focus on Made in USA at High Point Market

Movement based on job concerns, economics

Clint Engel, Gary Evans -- Furniture Today, October 21, 2011

HIGH POINT — A growing Made in America movement in the furniture industry is influencing everything from the location of new plants to how products are sold at retail.

Both vendors and retailers say they are paying more attention to where a product is built, bearing in mind that as unemployment remains stubbornly high, U.S.-made goods means more jobs in the national and local economies.
"There is a growing interest in the Made in America story," said Roy Calcagne, president and CEO of North Carolina-based upholstery producer Craftmaster.

"Consumers will spend 5% more, or maybe 10%, depending on the product, if it's made in America," he said. "But the bottom line is that the product has to be good and made right. ‘Made in America' certainly will help push the consumer over the edge to buy that product. People can relate to it."

Craftmaster, which was acquired by China-based Lacquer Craft five years ago, is a forerunner of a number of offshore-owned companies that have established manufacturing operations in the U.S., mostly within the last year or two.

At this week's High Point Market, the domestic production theme will be on display in a 16,000-square-foot Made in America Pavilion in Market Square & Suites. Exhibitors in the space will offer products across all categories, officials said.

"I have to say this initiative has absolutely taken off from inception," said Brian Bunch, vice president of leasing for Market Square AC Management. "There is more interest than we ever imagined."
Several retailers Furniture/Today spoke with, however, have mixed feelings about Made in America. They support a healthy U.S. furniture industry, but some are hesitant to heavily promote U.S.-made products when they still sell so many imported goods (see related story).

And imported furniture is everywhere. According to an analysis of government statistics by Jerry Epperson of Mann, Armistead & Epperson, imports accounted for 71.3% of U.S. wood furniture shipments last year and 36.6% of upholstery shipments. In an economic forecast this summer, he said he expects both percentages to keep climbing slowly in the next few years.

In the manufacturing arena, there has been some recent blowback against the rising tide of imports.
Several companies have opened U.S. upholstery plants in the past two years, partly to provide shorter lead times and wider fabric choices than are possible with Asian sourcing. Companies also say the U.S. plants can be a backstop in case production in China becomes less attractive as costs of materials and labor rise and the currency appreciates further.

Craftmaster's Calcagne doesn't expect a big rush of more offshore manufacturers to set up U.S. production, although several already have - including Ekornes, Fairmont Designs, Four Hands, Schnadig International and Swedwood, which produces furniture for Ikea.

Schnadig, owned by China-based Markor, searched a year for a U.S. factory and settled on a partnership with North Carolina-based Key City to make upholstery for Schnadig's upper-end Caracole brand and Lauren/Ralph Lauren. The domestic connection will be a bonus to the two Schnadig portfolios, but other considerations were the main reason for the partnership, said CEO Jeff Young.

"Our dealers love our upholstery frames but have demanded additional fabric choices. We obviously cannot provide four-to-five-week delivery on custom fabric from our facility in Tianjin, China," he said, adding that the company can meet that lead time from Key City's plant in Wilkesboro, N.C.
"Custom choice of fabric will open up new accounts for us that we were unable to penetrate with just one or two fabric choices. Additionally, our N.C. operation allows us to more fully utilize the domestic market for better fabrics that are in keeping with the upscale look and style of our Lauren/Ralph Lauren, Caracole and Caracole Light brands," said Young.

North Carolina Gov. Bev Perdue will visit the Four Hands showroom this market to help the company introduce Republic, a North Carolina-sourced upholstery line that the company describes as its "first ever made in USA collection."

"We are extremely pleased to find ourselves sourcing in the USA with this introduction," said Wade Oppliger, Four Hands vice president of upholstery and seating. "This factory has modeled their business to take advantage of opportunities that the market provided. They deliver exceptional quality and comfort with full custom capabilities - especially fast and at a great value. We believe our customers will find this an unbeatable combination."
The desire for Made in America products was "one of the reasons" that for the opening in August of a 120,000-square-foot warehouse and factory in Asheboro, N.C. by container specialist Flair Enterprises, a promotional to mid-priced upholstery company.

Said Kurt Kelly, Flair's U.S. sales manager, "With the uncertainty in China with the exchange rate and other things that could affect pricing, we're keeping our options open and preparing for anything."

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