Prices rise 5% to 15% on some lines
By Thomas Russell -- Furniture Today, April 20, 2008
High Point — Price hikes hinted at before market came into sharper focus here. And the picture wasn't pretty.
On some products, prices jumped as much as 30%. But most increases fell in the mid range of 5% to 15%, according to industry sources.
Rising costs of fuel and raw materials including foam, wood and metal are spurring the price increases. The weakness of the dollar against foreign currencies also has an effect.
With pressure on source factories to make a profit, importers say they have tried to absorb some of the rising production costs.
"We're getting price increases from most if not all of our suppliers," said Hooker Furniture Chairman and CEO Paul Toms, adding that price pressures have been mounting for four months. "We try to work with them to mitigate it."
Still, the company instituted a low single-digit price hike on March 1 on about a third of its line.
Suppliers said that higher prices didn't appear to dampen orders much at market. If anything, retailers shopped hard for the best deals.
"We're looking for buy downs, where you can lock in a lower price by committing to it at market," William Blalock of Canton, Ga.-based The Furniture Store told Furniture/Today at market. "And we're continuing to look for good value we can make money on."
For some sources, managing future increases will be a matter of continuing to eat the rising costs or dropping items as they become too expensive.
"A low rate of sale and price increase are usually death blows," said Chris Rayle, a product manager at Klaussner, who said that prices on select items in about a quarter of his existing occasional line will rise 5% to 30% on May 1.
With a 65% price hike in raw iron since fall, and a 30%-plus increase in steel tubing over the same period, cost increases are hitting home with metal beds importers and other sources with metal-based lines.
"The more (metal) it had, the higher it went," said Kerry Cochran, regional sales manager of Coaster, which is raising prices on some metal beds from 7% to as much as 25%. "We're not going to exit the category, but we may change the strategy somewhat."
Wood and leather products also face pressures.
James Riddle, managing director of case goods and leather upholstery importer Lifestyle Enterprise, said that just before market, the company imposed a 5% to 10% increase on about 10% of its total wood groups. In leather, price hikes were across the board.
But Riddle also said that Lifestyle can still negotiate with its manufacturing partners as it works to keep a lid on prices or reduce them. This market the company offered a "Miracle" promotion of a five-piece bedroom set for $199 FOB Asia and a 3-2-1 contemporary bonded leather upholstery set for the same price. Riddle said the company also has lowered its starting price point for a five- piece bedroom in the Forbidden City line to $899 retail from $1,299 a year ago.
| Acknowledgements | ||
| Editor in Chief Ray Allegrezza, and staff writers Jeff Linville and Clint Engel contributed to this report. | ||
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