U.S. leather producers offer options, quickly

Larry Thomas -- Furniture Today, February 25, 2013

HIGH POINT - Although the vast majority of leather upholstery on retail floors is produced in Asia, companies that focus on upper-middle and high-end price points have carved out a distinctive domestic niche that gives them plenty of ammunition against their import competition.
     These producers typically rely on offering an array of design and cover choices that imports simply can't match. And when those elements are coupled with the domestic producers' best weapon - speed to the consumer's home - they believe their niche still has significant upside potential.
     "I definitely think it gives us an advantage ... since we can design a product and bring it to market very quickly," said Bruce Birnbach, president of Texas based American Leather. "It changes the game."
     Clearly, consumers must pay more for such game changers (sofas from American Leather and domestic competitors like Elite Leather, Classic Leather and Bradington- Young typically retail for $3,000 and up), but Birnbach says that is seldom a stumbling block.
     Consumers, he said, expect to pay that much for furniture that is essentially custom-made in America. And he regularly tells retailers that selling such products will substantially boost GMROI, gross margin return on investment.
"That's a strong selling point in a marketplace that is so focused on price," Birnbach said.
     American Leather, which has about 400 employees in its 250,000-square-foot facility in Dallas, has used that business model since its founding in 1992, but many of its competitors have been quietly toiling domestically for much longer.
     Southern California-based Elite Leather has been around since 1959, while Lee Inds. and Bradington-Young were both founded in North Carolina in the 1970s, and Classic Leather's North Carolina roots date back to 1966.
     The newcomer on the block, in America at least, is Ekornes - a company that has made furniture in Norway since 1934. Best known for its Stressless brand of recliners and sofas, Ekornes opened its first furniture plant outside of Norway last year in Morganton, N.C.
     The plant, which currently has 36 employees, builds six of the company's best-selling Stressless sofas using components shipped from Norway. Most finished goods are sent to the company's warehouse in Somerset, N.J., where its U.S. sales and marketing team is based. However, this year's plans call for the plant to increase the amount of goods shipped from Morganton directly to Ekornes dealers.
     "That will let us to ship within six weeks after the order is placed," said Rolf Aarseth, an Ekornes veteran who moved to North Carolina to oversee the new plant. "It will be a big advantage for us."
     Aarseth said he's pleased with what the plant has accomplished in a short time (the first sofa left the factory in January 2012), but believes productivity and sales volume will improve once the factory starts building all of its own sofa frames later this year and installs a state-of the- art leather cutting machine in April or May.
     The cutting machine, which features a pair of blades making separate cuts simultaneously, will be the only one of its kind in North American, Aarseth believes.
     Less than an hour's drive from Morganton, Lee Inds. also expanded production recently by purchasing the former Conover Chair facility in Conover, N.C. and converting a portion of the space into its fourth factory.
     Company President Norman Coley said production began in mid-January with about 30 employees, and the company is in the process of moving its corporate offices to the new site from nearby Newton, N.C. The factory could eventually have 100 employees, he said.
     "It is an old building that had a great skeleton, but needed some work on the outside," Coley said. "We're excited about of the possibility of expanding production there."

	Sewers work in Ekornes well-lighted new factory in Morganton, N.C., which makes six of the company's most popular Stressless sofas.
Final assembly is completed inside the Ekorness shipping carton. Once assembly is finished, the worker adds packing materials and then wraps the carton around the product.
	The Starlight chair from Elite Leather reflects the American mid-century design that influences much of the company’s line.
American Leather’s three-seat Savino sofa features chrome legs and a clean, contemporary style.