DeCoro to liquidate
January 26, 2009,
China-based leather upholstery producer DeCoro has stopped shipping and has announced that it will pursue voluntary liquidation.
CEO Luca Ricci last week confirmed the shutdown of the company's two plants in Shenzhen, China, where DeCoro had produced Italian-style leather upholstery and motion seating.
When he launched DeCoro in 1997, Ricci was credited with revolutionizing the leather upholstery industry by basing his operations in China, resulting in huge savings on labor. A number of other manufacturers, including leather giant Natuzzi, also set up production offshore to cut costs.
“DeCoro is currently in consultation with our attorneys and accountants to determine a go-forward plan,” said Heath Corso, executive vice president of sales and marketing. “Our U.S. office (in High Point) is still in operation at the present time to support our dealers through this process. Arrangements will be announced once they have been completed.”
A few of the 13 High Point employees have already left the company, and others will be let go as the dissolution proceeds.
Ricci said that while it will liquidate, DeCoro is not broke.
“The assets are much bigger than the liability so we think we can make money and pay all our suppliers,” he said. “We want to be correct and pay everybody.”
And while he is down, Ricci may not be out of the industry — he reportedly is exploring the viability of operating an entity in the United States or possibly restarting the business elsewhere. He did not comment on this possibility.
At its peak in 2006, DeCoro had production facilities covering 2.9 million square feet and global sales of about $300 million.
In recent years, the company lost big retail accounts with the closing of Levitz, Wickes and others.
DeCoro continued to struggle in 2008 because of tough global business conditions and reduced access to capital — despite announcing in November that it had reached an agreement with China Construction Bank to provide capital for operations.