SONOMA, Calif.\u00c2\u00a0— A pair of lively panel discussions highlighted the American Home Furnishings Alliance’s annual
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\nmeeting here, as industry leaders offered opinions on topics ranging from the demise of domestic fabric manufacturing to the role of the Internet.\u00c2\u00a0<\/p>\n
Some of the sharpest comments came during a panel of executives from key fabric suppliers, all of whom have been forced to slash domestic production in recent years as Chinese-made fabric has taken huge chunks of market share.<\/p>\n
One of the consequences of that trend, said Larry Liebenow, president and CEO of Quaker, is a “cowboy-like atmosphere” where intellectual property rights are almost nonexistent, with design knockoffs commonplace as furniture makers search for sources with the lowest prices.<\/p>\n
“I’ve been surprised by how quickly so many companies rushed to the cheapest price, sacrificing some fundamental quality,” he told the group.<\/p>\n
Rob Culp, chairman and CEO of Culp Inc., said the rush to the bottom has resulted in a virtual “reinvention of the food chain.” “The stealing of ideas is very disconcerting to me,” he said. “Even our customers are doing this to us.”<\/p>\n
Elkin McCallum, chairman of Joan Fabrics, and Mike Shelton, president and CEO of Valdese Weavers, agreed that domestic production isn’t dead, but said it must be “blended” correctly with Asian production to keep pricing and product flow competitive.<\/p>\n
“We are extremely bullish about being able to produce our products domestically,” said Shelton. “We have 90,000 active patterns, 10 SKUs per pattern, and we deliver within 20 days. That keeps our domestic operation sharp.”<\/p>\n
McCallum told attendees the ability of Chinese factories to produce cut-and-sewn fabric covers has entrenched their competitive position, but he still believes a blended strategy of domestic and foreign production is viable.<\/p>\n
“The question is, How far do you take your domestic production down?” he said. “We’ve gone from having over 5,000 employees to around 800…. “It’s hard to talk about the future while you are destroying the past.”
\nA panel of manufacturers and retailers was a bit more upbeat, but the group agreed the industry is facing tough challenges.<\/p>\n
“I think stores generally have done a poor job of inspiring and attracting customers,” said Jeff Young, president of HDM, the Furniture Brands International unit overseeing Henredon, Drexel Heritage and Maitland-Smith. “I think that’s why so many stores and manufacturers are struggling.”<\/p>\n
Keith Koenig, president of South Florida retail powerhouse City Furniture, said manufacturers must share the blame, largely because there isn’t enough style differentiation. “There’s still too much of the same thing in stores,” he said.<\/p>\n
Panelist and consultant Bob Stec, former CEO of Lexington Home Brands, agreed. “Retailers today are looking for standouts, not just four more collections,” he said.<\/p>\n
All three agreed the Internet already plays a big role in consumers\u00e2\u20ac\u2122 buying decisions, and its influence will only increase.<\/p>\n
Thus, Koenig said traditional advertising venues such as newspapers, radio and TV are becoming less important. His company plans to upgrade its Web site and perhaps develop a high-quality catalog.<\/p>\n
Young said consumers want to see prices when they shop on the Internet, adding HDM is one of the few that offer such information on the Web. He said consumers often think they can get a better price elsewhere on the Internet. “It takes them about a year” to realize the price on the company’s site is the real price, he quipped.<\/p>\n","protected":false},"excerpt":{"rendered":"
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