North Carolina furniture makers learn to compete with imports

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Posted 8:05AM on Friday, April 19, 2002

HIGH POINT, N.C. - While it's been many years since the Southern Furniture Market changed its name to the International Home Furnishings Market, the international tag seems to be more fitting than ever. Imports now make up 43 percent of all the wood furniture sold in the United States, up from less than 30 percent in 1996. In that same time, upholstery imports have nearly doubled their share of the U.S. market, to 13 percent from 7 percent. Part of the reason is the approach taken by Alex Bernhardt, chairman of Bernhardt Furniture, after watching his company lose sales to competitors who cut their costs and prices by importing some pieces: "If you can't lick 'em, join 'em." "The bad news is the job losses in the U.S., which follow the same path at the textiles industry in the South," he said Thursday at a media breakfast that started the spring run of the International Home Furnishings Market. "The good news is the values we are able to bring as an industry to the consumer." On Thursday, some 82,000 buyers from all 50 states and more than 100 foreign countries began gathering here for the market's spring run, which ends April 25. The odds are greater than any time in the past that the tables, sofas and chairs they will see -- or at least some of their components -- came from another country. Bernhardt said his company's experience is probably typical of what is happening across the industry. In 1989, Bernhardt produced a high-end mahogany dining room suite that sold at retail for around $14,000. This market, the company is selling a comparable suite that will retail for $13,000 because of its import program. "That's deflation," he said. "After 13 years we are able to bring out what I consider a nicer set for a lower price." More domestic manufacturers are going overseas to get complete pieces of furniture or components that become part of furniture that is assembled in the United States. Some U.S. companies are using technology to try to stave off the wave of imports. Farooq Kathwari, president and CEO of Ethan Allen, said his company has invested millions of dollars in new technology to reduce labor costs. "There will be a balance," he said. "There's been a tremendous amount of change that has taken place very fast." His company also is taking the other route, opening stores in England, China and other countries. Pat Norton, chairman of the Monroe-based La-Z-Boy, said he expects the industry to become more global in the future. "It's one world," he said. Norton was asked if he could foresee a time when furniture manufacturers from places such as China or Indonesia decided to bypass U.S. companies and sell their goods directly to retailers. "I'd be shocked if that thought process was not already going on," he said. Industry analyst Jerry Epperson said he expected this market to be a good one for manufacturers because retailers need to freshen furniture on their showroom floors. "The retailers are coming to the market as a foundation for a two- or three-year plan," he said. "It's not going to be a market with a lot of flash. "April is usually the market with the manufacturers bring out their big guns. You won't see 12 or 15 big introductions like we've seen in past years." One exception is the new Elvis Presley furniture by Vaughan-Bassett of Galax, Va. Epperson said he expected the Elvis bedroom furniture suites to sell very well. However, most retailers are coming to market to look for less flashy furniture that they can offer to their customers for the next two or three years, he said. "They are not ready yet to take a big risk," Epperson said. "That time will come when the economy is a little more stable."