Suppliers Ply Offshore Markets
Heath E. Combs -- Furniture Today, July 31, 2012
NEW YORK - Is the grass greener on the other side for home furnishings suppliers? It would seem that way judging from conversations with suppliers at the recent High Point Markets and here in New York showrooms.
Astonishing as it might seem, global sales now make up roughly half - and in some cases more than half - of total sales generated by many domestic furniture manufacturers. For home textiles ... not so much, and percentages vary by product category, by licensed brand and by initiative and understanding of international markets.
On the furniture side of the business, many have found fertile ground for their products in overseas markets such as The Middle East, Russia, Latin America and, of course, Asia. Western Europe seems to be stronger for home textile firms, which have built solid businesses in France, Germany, Italy and Scandinavia for many years now. Even if those markets are temporarily subdued by Europe's financial woes, the groundwork has been laid and future business is expected to resume as Euroland finds its release.
Home textiles companies are approaching global markets in various ways. Carey Kravet, president/ceo of Kravet Fabrics, has found Western Europe especially receptive for his company's upscale textiles. Owing to the diversity of its collections, many of them by well-known designers who have become brands in their own right, Kravet services both traditional and modern customers. Predictably, traditional dominates in countries such as France, Italy and more recently Russia, while colorful modern design is favored in Northern Europe, particularly Germany, Belgium, Scandinavia and Great Britain.
The recent acquisition of Brunschwig & Fils allows the company to have its own beachhead in Paris served by its own agents and employees for direct contact with European customers. However, its business in Asia is growing as well alongside the trust relationships that develop over time and as language barriers are overcome.
Mike Shelton, president/ceo of Valdese Weavers has had less success abroad so far, except for stealth sales which come from the upholstered furniture covered in Valdese fabrics sold by his customers to foreign lands. By his own admission, the company has yet to make a designated effort to strengthen its international distribution, which is still in its infancy.
P. Kaufman's Ron Kaufman also downplays international sales. While his company employs an export manager, he is disappointed by distribution in Asia especially. Most of Kaufman's products are made in China where intellectual property theft runs rampant and copies are sold to potential customers direct. He states that exclusive arrangements are virtually impossible to obtain or enforce in the process of outsourcing and that local companies press their advantage.
Although P. Kaufman - which represents Ralph Lauren, Waverly and supports a separate division for the Clarence House brand - exports to Europe, Australia, New Zealand and South Africa, the company finds sales abroad wanting and diminishing.
Revman - whose roster of licenses include Laura Ashley, Eddie Bauer, Vera Wang, Coach and Marrimekko, among others - currently exports only roughly 10% of its products to other countries, held back in part by the well-known differences in sizing for bedding products but also because some of its licenses limit Revman's distribution to North America. Laura Ashley is a case in point, which has its own brand representations in Europe as well as in Asia.
This isn't keeping the company from doing business in Western Europe and China, according to Rich Roman, president/ceo. The offshore business is primarily with better goods sold in shop-in-shop environments, such as the popular shopping mall Plaza 66 in Beijing or by piggybacking a brand, such as Marrimekko, which sells in Dubai via its retail partner Crate & Barrel.
Keith Sorgeloos, president/ceo of HomeSource, takes a different approach to global sales. Having lived along the Pacific Rim for many years and traveled the world early on, his understanding of the global opportunity for American companies comes intuitively.
While the percentage of home textiles his company sells into international markets is still small, he exports directly from the countries of origin where his goods are made - India, China and Pakistan - to customers in Asia, Singapore, the Caribbean and Mexico.
Roughly 20% of his export business, however, stems from the Shiner brand of unique furniture pieces the company acquired, including the patented "Rocking Bed" that is now part of the HomeSource line. Distribution to date includes South America, Germany, France, Asia, New Zealand and Australia. In some of these territories, HomeSource maintains its own website based on Sorgeloos' belief that the future belongs to the consumer.
To be as close to consumers as possible, he subscribes to a new validity and opportunity of U.S. based manufacturing and direct-to-consumer initiatives. In his view, "if within the next 10 years you don't have a direct-to-consumer business, you will not be in business."
Speaking of furniture - this is where the greatest export strides have been made in the home furnishings word.
According to Eric Schenk, president of Century Furniture, more than half of the company's volume comes from sales abroad - the Middle East, Russia, Asia and Western Europe. Century was probably one of the earliest to venture into foreign territories.
Its ties with Japan go back some 20 plus years and are very much alive and profitable.
Its global business has grown so brisk that Century has hired linguists to ease communications.
Schnadig president/ceo Jeff Young said the company sees particular strength in Asia, where parent Marcor not only manufactures the Schnadig collections - including Lauren and Caracole - but also retails them through Marcor's own 580 stores and beyond. Marcor plans to expand its retail network to 1,000 doors within one year.
This allows the company to keep all parts of the global sales transaction under one umbrella as manufacturing, warehousing, shipping and distribution all stem from one departure gate. Lauren, with its international brand power, has garnered an annual percentage between 55% and 60% of global sales whereas Caracole, a highly eclectic collection imbued with a sense of humor and lightness, accounts for around 50% of global sales. Aside from Asia, the collections are sold heavily in the Middle East and other emerging markets.
Similar results were reported by Baker and Hickory Chair, i.e., global reach especially benefits the high end. Quality products, it seems, are very much more appreciated abroad than they are sometimes at home.
Mike Shelton - Valdese Weavers
Ron Kaufman - P. Kaufman
Keith Sorgeloos - HomeSource
Rich Roman - Revman
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