Rush on to replace Quaker
Manufacturers hunt for alternate covers
By Gary Evans -- Furniture Today, July 16, 2007
High Point — Upholstered furniture manufacturers scrambled last week to find alternate sources for fabric as they awaited word on the fate of one of the industry's major suppliers, Quaker Fabric.
Fall River, Mass.-based Quaker said on July 2 it may close and liquidate, leaving some 900 employees jobless.
The supplier has lost millions of dollars in the past few years, largely because of fierce competition from Chinese imports.
While hoping that rumors of a bailout for the 62-year-old company come true, manufacturers were out in force last week asking other mills for substitute looks. They also were wondering what to pull from their product lines, and were seeing the fabric choices they could offer consumers dwindle.
Several executives said that if Quaker liquidates, the industry will be left without scores of patterns and styles, and available fabric options will be decidedly slimmer.
Susan Sheil, a designer and merchandiser at Marshfield Furniture, which counted on Quaker for exclusive fabrics in small volumes, said the company had product using Quaker fabrics on a truck bound for the Las Vegas Market when news came that Quaker might be going under.
"It's bad, really bad," Sheil said.
Marshfield uses multiple vendors — including Quaker, Culp and Hafner — in combination to distinguish its line from big-box products, and looked to Quaker "for a lot of specialty things and exclusives," she said. "They could do unique things in small quantities that we didn't have to worry about (inventorying). You can't get that now."
Penny Eudy, La-Z-Boy product manager for major upholstery, said the La-Z-Boy line "took a nice hit with the Quaker closing. They were an important vendor to us."
She said the company is reviewing its SKUs for potential replacement "and we'll see how they have been selling and then, if we feel they need to be replaced, we'll contact vendors with those types of looks to see what they have that is similar."
Rob Pitt, director of upholstery for Crate & Barrel, and Regenia Payne, creative director for Vanguard Furniture, also are looking at options.
"We are taking the analysis of our current SKUs and sourcing with other key domestic partners to replace the better-selling SKUs with similar qualities," Payne said. "We will work painstakingly to minimize any hardships to our customers."
Ken Church, president of Southern Furniture, said Quaker's demise would be "another major disruption in an already volatile industry. With all of the other things we've gone through, the one thing we've had to hang onto recently is our constant domestic sources. We've had a continuity and consistency with those folks, and that's been disrupted."
Church has told his management staff that it's "critical to develop relationships with new domestic fabric companies that have the wherewithal and the desire to be really good business partners for the future."
Ben Nielsen, president of Cambridge of California, said Quaker was selling fabric in its warehouse last week to customers with up-to-date accounts on a cashier's check, certified check or credit card basis — a benefit to his company.
"It allows me to bridge this problem we're facing," he said, giving Cambridge time to find new covers. But he said he had concern for retailers who have taken orders on production that will never begin.
"They're going to have to give the money back (to customers) and resell them," he said. "I think its going to have an earthquake effect throughout the industry."
Quaker posted a profit of nearly $8 million in 2003, but after barriers to textile imports fell the company skidded to losses of $25 million in 2005 and nearly $38 million in 2006. When the company laid off 200 people last summer, President and CEO Larry Liebenow cited competition from imports as a key reason for the company's struggles.
The company secured a five-year, $70 million financial agreement in 2005 but has been unable to meet its loan requirements, leading to the current crisis.
Lee Fautsch, vice president, sales, home furnishings for Flexsteel, said the company had been following the situation at Quaker for several months and has been watching its own fabric inventories closely.
"Although we are saddened by this, we were certainly not surprised by it," he said. "What is critical here is that any manufacturer like Quaker that was slow to develop a global strategy has, or will, have to pay a heavy price."
He said Flexsteel is trying to fill the void left by Quaker. "It will take a while to work through this problem but we will work through it," he said.
Fabric suppliers said that all last week they fielded questions from desperate manufacturers trying to duplicate Quaker fabrics. But Quaker not only holds intellectual property rights to its designs, it also used a number of proprietary yarns that will have to be sourced from other suppliers — a challenging task.
"(Upholstery manufacturers) fail to grasp the severity of their plight regarding the intellectual property rights tied up in Fall River," said Roger Berkley, president of fabric supplier Weave Corp. "We keep saying that we can't touch patterned goods until we or they have the intellectual property rights, and I'll bet they are getting the same news from my competitors, too."
Jack Cobb, president of fabric supplier Westgate by ADF, said a number of upholstery manufacturers have been careful over the past year not to "put too many eggs in the Quaker basket."
But he added that with Quaker potentially gone and bankrupt Joan Fabrics having liquidated its Mastercraft division and other assets, the void in some upholstery producers' lines "is huge. Some of the North Carolina manufacturers may have as many as 750 SKUs or more between these two companies. Their special order racks will be significantly depleted."
| Acknowledgements | ||
| Fabric Editor Susan Andrews contributed to this story. | ||
