Canadian factories: How they can survive
Michael J. Knell, Canadian Correspondent -- Furniture Today, June 10, 2007
Will Canada still have a furniture-making industry a decade from now? I'm having a lot of conversations on that question these days, with manufacturers, retailers, sales reps, anyone interested in the future of our industry.
The numbers aren't encouraging. With the exception of mattresses, Canadian furniture factory shipments have shrunk for the past five years, with no sign of change yet.
But that doesn't change my answer: Yes, there will be a thriving Canadian furniture-making industry a decade from now. But it will be very different from today's, which came into its own in the years following free trade.
In those heady days of the '90s, when our relatively weak dollar gave us a competitive edge in the U.S. market, most industry leaders believed the goal was to become a North American producer, ready and able to supply retailers anywhere on the continent.
It was a sensible strategy. The U.S. economy was the world's most important, enjoying a prosperity unparalleled since the 1950s.
Then things changed, with the Canadian dollar becoming much stronger vis-à-vis the U.S. greenback, and Asian imports pouring into our neighbor to the south.
In this new era, Canadian furniture manufacturers must change to survive. In general, that means they need to get smaller, not bigger. Without forsaking those qualities they're known for, they will have to narrow their focus, whether that involves style, price or category. The days of the general full-line furniture producer are over.
The factory of the future will be highly selective in everything it does. It even will get picky about who it does business with. It also is going to have to expand its horizons. It's not enough to cater just to U.S. retailers. New markets have to be found. Some of this is already happening.
I also believe that, a decade from now, almost every North American-made case piece sold anywhere will be made in Canada. While our industry has its problems, it hasn't shut down almost completely and moved capacity and know-how to China. This will stand us in good stead as the years unfold.
It's the Canadian industry's ability to make quality, customizable furniture in the upper-middle to lower-high-end price points that will be its saving grace.
The recent period of change and pain is likely to continue, at least for a couple of years.
But, like the industry that survived free trade, the one that emerges from the current crisis will be strong, prosperous and more forward-thinking.
And somewhat smaller.
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