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Thomas Russell

Malaysian leather producer Rubelli may reenter U.S. market

May 23, 2012

During my visit to the Malaysian International Furniture Fair earlier this year, I had the chance to see a company I visit almost every year at the show. Malaysian-based Rubelli is a familiar name to buyers in the U.S. It has shown its line of Chinese-made stationary and motion upholstery line in both High Point and Las Vegas over the years.

Today, however, the name is likely a distant memory to many buyers. Not only does the company no longer show at either market, it doesn't sell here at all, according to company general manager Chai Kian Peng.

That's a change from the mid-2000s, when upwards of 15% of Rubelli's sales were in the U.S. market, Chai said. While that's not a huge number compared with some exporters, it still was a significant market for the company, which also sells to Canada, the Middle East, Australia and Central and South America.

Around 2007, the company's U.S. sales started to fall when economic conditions caused its customers to shift to less expensive alternatives such as bonded leather. While Rubelli maintained competitive prices for leather sofas that retailed from $1,000 to $1,300, the quest for cheaper goods continued.

"Demands for full leather and leather match products dropped drastically, especially from 2007 to 2010," Chai said, noting that the company has also been hit with higher leather prices, which in turn, help raise the price of finished product. "Since we do not - and would not - use bonded leather, we switched to other less affected markets."

Rubelli is not unusual in this regard. At shows in China, Malaysia and Singapore, Furniture/Today often runs into leather sources with stylish looking lines that don't sell to the U.S. Explaining that they are too high priced for the U.S. market, they instead focus on other areas of the world such as Europe or the Middle East.

And while Rubelli doesn't plan to show in the U.S. anytime soon, Chai is optimistic that as the overall economy improves, so will prospects for his line in the U.S.

"Now that the USA market for leather upholstery seems to be reviving, we are slowly and cautiously getting back into this market again," he said, noting that the company plans to study the market before making any sudden moves.

How has the recession affected your leather buying decisions?