Leather upholstery orders heat up

Buyers in positive mood

Larry Thomas -- Furniture Today, April 21, 2010

W. Schillig’s contemporary Leo sofa, which is available with a matching ottoman, has been a market winner.

AT THE MARKET — Optimism is king in leather upholstery showrooms this week, thanks to a recent uptick in business that has put buyers and exhibitors in a positive mood.

Exhibitors say this market is the most upbeat they have seen in at least two years, and that has translated into increased commitments and orders from retailers.

"There is a prevailing positive attitude on both sides of the fence (retail and manufacturing)," said David Stewart, vice president of sales and operations at upper-end resource W. Schillig. "People seem like they want to spend more money."

Exhibitors said buyers have been eager to see new products and gather promotional ideas. Many said showroom traffic was heaviest on Sunday and Monday, but numerous showrooms - especially those who do business with Top 100 accounts - were shopped several days before the market's official opening on Saturday.

"We've had excellent traffic," said Deb Linkhorn, marketing manager for Leather Italia. "We started getting people in here Thursday afternoon."

Leather Italia is one of several exhibitors reporting brisk business in mid-priced to high-end goods with top-grain leather covers, which executives see as an encouraging sign for the months ahead.

The Parker Living division of Parker House, for example, is receiving positive feedback on a line of bench-made sofas retailing for $1,499 and up, while Sofitalia, the leather upholstery unit of Lacquer Craft, is getting a similar reaction to several casual contemporary sectionals that retail for $2,499 and above.

"Casual contemporary is the strength of our line, and since there's not a lot of that style in the marketplace, we can fill a void on many dealers' floors," said Lance Foster, general manager of Sofitalia.

Sectionals also are a big part of the market success at Kuka, a Chinese manufacturer making its High Point debut.

Michelle Rosson, vice president of North American and Latin American sales and merchandising, said several dealers have told her sectionals now represent 70% of their upholstery sales dollars, even though most devote no more than 50% of their floor space to them.

"Sectionals are crazy hot," she said.

Rosson and other executives said colors other than brown and black are gaining more attention from retailers looking to "lighten up" their sales floors. Gray tones are among the most popular, but brighter colors such as red, turquoise, eggplant and lighter shades of purple also are gaining interest.

And many retailers are choosing to brighten up even further with the lightest of colors - white - which has become the second most popular color (after brown, of course) at Natuzzi.

Executives are breathing a sigh of relief here because they have received surprisingly little negative feedback from price increases that are coming, or in some cases, already implemented.

Most of the increases are due to a spike in leather prices stemming from a worldwide shortage of hides, but producers also are experiencing higher costs for other raw materials such as steel and foam cushioning.

"I think dealers knew this was coming," said Cary Benson, president of Palliser, which raised prices an average of 4% to 5% three weeks ago. "At our last sales meeting, I asked if anyone had been getting static about it, and I don't think a single hand went up."

More High Point Market April 2010 Coverage