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Brazil show reports record attendance

Elvis livesElvis lives in Brazil! This chair also pays tribute to the Stars and Stripes.
BENTO GONCALVES, Brazil - Movelsul Brasil closed out the largest furniture trade show in Latin America in late March with record attendance and sales expected to be more than initially predicted.
     Movelsul is held every two years here in Bento Goncalves, a furniture town of 102,000 in southeast Brazil, a major furniture manufacturing area in a mountainous part of the country dotted with vineyards and wineries. The five-day event drew 38,148 visitors and 317 exhibitors, which ranged from upholstery, mattress and case goods vendors to makers of kitchen cabinets, stoves, washers and dryers and small appliances. Show officials said the show closed with sales expected to reach $360 million over the next 12 months, 10% more than originally estimated.
     To make life easier for visitors, sponsors arranged the show in sectors: upholstered furniture and mattresses in one pavilion, dining and living room in another, bedroom, office and outdoor in another, and so on.
     Officials said the consolidation and separation of products was a hit with attendees because it optimized the time they spent on the show floor, and made it easy for them to access what they wanted to see.
     And while that was a major change for the show, the bigger change was that the event is now positioning itself "as the first furniture fair intended for the consumer market of the new Brazilian middle class."
     The positioning is relevant because the Brazilian government has been working to support the growth of the middle class through higher wages and economic incentives.
Herval usesHerval uses a wood tambour-like sleeve to protect the arm of this big sectional.

     It seems to be working. According to a recent report by McKinsey & Co., the Brazilian middle class - those with a household income from $12,000 to $50,000 - has grown from 32.5% of the country's population in 1992 to 51% in 2010. It is expected to hit 60% by 2030. (Although not as well defined, experts believe about 60% of the U.S. population is middle class, with household incomes of $25,000 to $100,000.)
     All this has caused the show to shift focus from where it was 10 years ago when it was aggressively seeking to export throughout the world, and especially to the U.S., where it was ranked as one of the top 10 source countries of imported furniture.
     The concentration now is on Brazil's $18 billion domestic market, which several exhibitors said has seen a 10% surge over the past year. That growth has compensated for a drop in the growth rate of furniture exports to 2.3% in 2011 from 38% for the previous two years.
     The growing interest in domestic sales was shown in product here that was largely tailored for Brazilian homeowners - with European-style contemporary upholstery and lacquered finishes on case goods and products seldom seen in the U.S., like clothing armoires.
     But Nis Raphael, owner of New World Trading in Cathedral City, Calif., was able to see products in catalogs not available at the show that he thought might someday be useful for his company.
     "I did find some rustic pine lines that compared favorably with Mexico in quality and price," he said. "They can do distressed in colors. It's not hand-made in the Tuscan style or hand-tooled leather that I do, but there is a potential to develop something."
     Raphael, one of two U.S. buyers and among 30 importers from 18 countries to accept a Buyers Project invitation to the show, said the trip to the southeastern tip of the country was "definitely worthwhile because it's a good alternative to China." But he added that relationships with Brazilian suppliers "might take some time to develop."
RudnickRudnick

     Roni Rudnick, an executive at Rudnick, one of Brazil's largest furniture manufacturers, said that in 2003 and 2004, the company exported 60% of its production, with much of it going to U.S. companies that included Stanley and Vanguard. Exports have now dropped to 10% of the company's output, said Rudnick, son of company founder Leopoldo Edmundo Rudnick, while domestic product has seen an annual growth rate of 15% to 20%.
     But as far as the U.S. market, he said, "It's always been important and it always will be."
     Rudnick said the industry got some help two years ago when the government, seeking to stimulate growth in its economy and a surge in imports, instituted tax breaks on certain consumer goods such as furniture, appliances, flooring, lighting and shoes.
     While Movelsul was going on, the government announced that it was extending the cuts until the end of June, and might also institute payroll tax cuts for labor intensive industries making furniture, shoes, auto parts and ships. Rudnick indicated he didn't take the June expiration date seriously, since the first cuts were originally set to last a couple of months. The cuts were expected to cost the government about $269 million in lost revenue this year.
     While exhibitors here see the increasing demand on the home front for home furnishings, other countries are taking a look too, and liking what they see.
     Canadian giant Dorel Inds., with annual sales exceeding $3 billion, became the vanguard in entering the Brazilian marketplace by partnering with a Brazilian company to sell juvenile furniture. Other well known brands, including U.S. names, are said to be looking at entering the market as well.
     Walter Rios and Sandra Colodetti of the Sao Paulobased consulting and trading firm Cobraice, an advisor to Dorel, said in a January presentation that Brazil's furniture imports have increased from $336 million to $700 million over the past three years with last year's growth rate at 31%.
     The consulting company said that Brazil faces the same competition from China that other countries have faced, with Chinese imports estimated last year to be about 30% of total imports, double from three years ago.
     Cobraice said that the furniture import business in Brazil "is just beginning.... We don't have yet a big furniture trading company in Brazil, but several small importers. Except that some big chain stores are already importing furniture from Asia."
     His conclusion: "We understand that the market is still unexplored by big players. Our competitors are small, but growing fast along with the market."

A chairA chair in Salao Design, a competition in product design, has a seat suspended by thin wire.
A representative of Invert Do Brasil demonstrates a small table that can be adjusted up or down.
A representative
Brazilian consumersBrazilian consumers are partial to European style and clean designs, as represented by this entertainment center.
The Movelsul show included the kitchen sink and also washers and dryers.
The Movelsul show
The furnitureThe furniture making city of Bento Goncalves, as seen from one of the Movelsul pavilions.

Tumar put a gathered back on this modern chair
upholstered in a deep wine fabric

Tumar put
Gray wasGray was the dominant shade in Bento Goncalves, but this ottoman shows plenty of color.
This dining room is from manufacturer and exporter Artefama Moveis.
This dining room

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