Brazil hopes styles, prices boost exports

Tom Edmonds, March 10, 2003

Only a handful of U.S. buyers were at the fourth annual Salao do Movel, Brazil's high-end furniture show here.

But the prospects for U.S.-Brazil furniture trade were a topic of constant discussion for exhibitors, especially among the larger companies who feel they have the wherewithal to do it.

With local exporters such as Sierra Furniture in case goods and Niroflex in leather have already blazed a trail, other companies are eager to explore whether their products might translate into U.S. success.

Having recently hired export managers and taken on agents to help establish relationships with North American retailers and distributors, several Brazilian companies have started tinkering with their product styling in order to develop designs that are commercially viable up north. Leather manufacturers targeting the American market, for example, say they are coming out with upholstery that is "bigger and softer" than what they usually sell in Brazil.

"I really don't think we have to change too much for America, but we will adapt as we need to," said Jose Agnelo Seger, president of Herval, a fabric and leather upholstery resource. Other Brazilian leather resources with their eyes on exporting include Mannes and Modulaque. While Niroflex, which already has a High Point showroom, works in the $599 to $999 retail price range, the other two companies are a bit higher, up to $1,999.

Labor costs in Brazil, while lower than in the United States, certainly are not as low as in China. But with the 50% devaluation in the past year of the Brazilian currency, the real, Brazil has become a greater bargain for the U.S. buyers.

"Now, it looks like Brazil and China are going to be the two major furniture countries," said Agustin Caceres, export manager for Doimo Brazil, a subsidiary of Doimo Italy, which is about to set up a warehouse and a showroom in High Point.

"The U.S. and Canada are the two major markets in the world, and everybody wants to export there," he said. "For us, the timing is right because we have the financing we need to get started, and the exchange rate is very favorable."

From a style perspective as well as from their trading orientation, Brazilian furniture producers are more accustomed to dealing with Europe rather than North America. However, they sense that the opportunity to the north is too big to ignore.

"The United States is 40% of the world economy, and we need to make it a larger portion of our sales," said Frank Zietolie, president of Telasul, which makes contemporary casual dining and occasional furniture and has a sister company, DellAnno, which makes kitchen cabinets. As a first step, Zietolie has set up a Miami warehouse for the two companies. South Florida is a comfortable initial step for many of Brazilian companies for logistical as well as cultural reasons.

"It's got to be a gradual process if we are going to do this right," Zietolie said. "We have to do it step by step."

Looking to do more than just sell furniture to Americans, Sierra Furniture — the Ethan Allen of Brazil — has a network of North American sales representatives as well as a showroom in High Point's Market on Green.

"We know we are going about this the hardest way, building a brand, but we are attempting to assure our future by developing relationships that will last," said Andre Tissot, president.

Sierra has vertically integrated distribution in Brazil, with licensed stores. Tissot said the company, which has been pursuing U.S. sales for three years, may not be able to duplicate that model in the States, but it does hope to build similarly strong partnerships: "Once we find the right partner in the United States, all our efforts will have paid off."

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