by A deep dive on Palliser Furniture’s new ‘partner’
Nature abhors a vacuum, and humans don’t like it one little bit, either. So, in the absence of any meaningful explanation from Palliser Furniture regarding its future, specifically what it is terming a “partnership” with supplier (and presumably largest unsecured creditor) MotoMotion, we are left to speculate.
Messages to Palliser executives, including Peter Tielmann and Carey Benson, were not returned, nor were messages to MotoMotion executive Xiaoqin Li (also known as Catherine Lee, MotoMotion’s chairwoman and largest shareholder) or Palliser founder Art DeFehr. In fairness to Li and DeFehr, the messages might not have reached them in, respectively, China and Mexico.
So, information vacuum be damned, let’s do this.
What we know
We learned during the High Point market in a Home News Now report citing a letter to dealers that, facing “liquidity challenges” and disruptions in its supply chain, Palliser agreed to enter a “close and constructive partnership” with MotoMotion. I understand that deal was supposed to go down Friday.
What the partnership likely means, and this is only speculation, is that MotoMotion is stepping in to stabilize and control Palliser operations. Suppliers are rumored to have started balking as Palliser’s bills went unpaid. As a longtime critical supplier of power mechanisms and electronics to Palliser, MotoMotion has fairly massive resources to re-start the Winnipeg-based company’s supply chain.
The deal also makes sense for MotoMotion because it potentially adds Palliser’s Coahuila, Mexico, manufacturing to its increasingly Vietnam-dependent supply chain, and MotoMotion has identified building a more resilient global supply-chain system as the top corporate priority this year. MotoMotion has also been emphasizing deep, long-term partnerships with big U.S. retailers, and Palliser’s retail network can only help on that front.
In addition, MotoMotion presciently hired upholstery veteran Tony Cantrell a month ago, installing him as general manager of its new MotoSolutions upholstery division. Previously Cantrell was for six years president of Kuka Home’s national retail division. Cantrell also was vice president of national accounts for Berkline.
MotoMotion is what we might call a “white label” powerhouse, previously content being the invisible “smart” engine inside upholstery from famous brands like Natuzzi and Palliser. But the company is now on the move, and only recently has it begun aggressively pushing its brand name at market. By stepping in to save Palliser, if that is what is happening, MotoMotion is adding market share, securing its own supply chain, and acquiring the heritage and custom-upholstery expertise of a historically solid North American brand.
Deep dive on MotoMotion
Doing research on a publicly traded Chinese company is . . . complex. First, you are dealing with Chinese characters rather than the English language. Second, financials are reported in yuan, which come in much bigger varieties than do U.S. dollar amounts.
But, here goes.
MotoMotion China, which owns MotoMotion USA, MotoMotion Vietnam and MotoSolutions, is also known by its Chinese name, Changzhou Jiangxin Duju Smart Home, which translates also as HHC Group. Fortunately, Motomotion, the name I will go with here because it is the name used to trade in the U.S., filed its annual report with the Shenzhen Stock Exchange April 23.
From these filings we can get a good snapshot of the company that now, perhaps, either controls or is deeply partnered with Palliser Furniture, probably excluding Pallliser’s EQ3 retail division.
My primary takeaway from the deep dive is that MotoMotion is as much a tech company as it is a components or furniture manufacturer. The company specializes in the research, design, development, manufacturing, sale and servicing of “smart” electric sofas, smart electric beds and their core components. In fact, the company holds over 500 U.S. patents and operates its own Surface Mount Technology workshops to produce its own circuit boards. Photos of its production lines in Asia, as displayed on its corporate website, depict scenes more akin to a pharmaceutical lab than a furniture factory.
In a down year for Chinese exports to the U.S., MotoMotion reached total sales of 3.4 billion yuan last year, or about $470 million. That 2025 total is up nearly a third over 2024’s $373 million and nearly 80% over 2023’s $280 million. That’s quite a three-year bar chart for top-line growth.
And despite tariffs, profitability remained strong, finishing at 857 million yuan, or about $126 million, up more than 30% over 2024’s roughly $90 million. This means revenue and profit grew in tandem despite a very challenging business environment for Chinese companies vis-à-vis U.S. tariffs.
“Against a backdrop of significant external volatility, the Company achieved revenue stability and demonstrated strong operational resilience and execution,” General Manager Xu Meijun states in the filing, which Claude Opus 4.7 translated into English from Mandarin. “More importantly, throughout this process, the Company continued to strengthen its structural capabilities, laying the groundwork for future development.”
Grabbing market share
MotoMotion cites as context for its positive performance the 6.1% overall decline in Chinese exports of furniture and furniture components to the U.S. in 2025, a total that ended at $63.7 billion. For the entire furniture manufacturing sector of China, revenues plunged 10.7% to 612.5 billion yuan, or about $90 billion, according to the Chinese government, a loss of four full percentage points more than 2024’s 6.7% drop.
Total profits for the industry suffered even more, dropping more than 12% year over year.
“This is not a one-off cyclical fluctuation but rather looks more like the beginning of a medium-to-long-term reshaping of the landscape,” Xu stated. “The U.S. market, in particular, has continued to weaken, while industry revenue has fallen and margins have come under pressure. Competition is shifting from a contest of scale and growth to a contest of efficiency and quality.”
For the year, MotoMotion’s 10 largest customers all were in the U.S., with seven of them retailers. In addition, MotoMotion sells roughly 28 of the Top 100. The top five customers increased their business with the company at rates higher than 50% compared to 2024, with two of those doubling their business with MotoMotion, according to the filing.
“The Company’s wallet share with key customers has risen meaningfully, and depth of cooperation and business activity have strengthened,” Xu stated.
MotoMotion also added 89 customers during the year, with 84 of those U.S. retailers, and nine of the 84 ranked in the Top 100. In all, U.S. retailers accounted for more than 90% of the company’s total U.S. furniture business.
These numbers “suggest a continued refinement and concentration of the Company’s channel structure in the U.S., with the business model gradually shifting from being order-driven to being grounded in deep cooperation with core retail customers,” according to MotoMotion’s filing. “The retail channel has become the primary growth engine of the Company’s U.S. business.”
U.S. market analysis
The filing also included what I regard as a nuanced analysis of the U.S. market.
In MotoMotion’s view, although the U.S. furniture-buying consumer faces cost pressures of inflation, rising interest rates and real-estate volatility, this consumer has “demonstrated significant consumption resilience,” according to Xu. “Even with real purchasing power compressed and decision-making turning more cautious, consumer behavior has not suddenly contracted.”
Consumers are adapting, in other words, and their resilience seems to derive from “behavioral patterns and adaptive capacities forged over the long term,” Xu’s analysis states. “In a competition-driven system, individuals tend to adjust under pressure rather than withdraw, which is why aggregate consumption has displayed the signature of slowing but not vanishing.”
That’s a pretty good read of the U.S. market, one that acknowledges structural shifts and changing rhythms of demand but that believes in a solid demand base in the long term.
MotoMotion’s biggest U.S. customers continue to ramp up purchases from the company, voicing clear expectations of long-term cooperation, according to the report, which cited City Furniture specifically as the sort of retail partner it is seeking. City Furniture executives are quoted in the report extolling their now substantial partnership with the Chinese company.
“This channel-side confidence not only stabilizes order flow but also, to a degree, offsets the impact of macro volatility on end-demand,” the report asserts.
Xu identified several priorities for 2026, and some of them might explain MotoMotion’s willingness to take a controlling interest in Palliser, if, in fact, that is happening. The first priority is to build a more resilient global supply-chain system, something Palliser’s Mexico and Canadian production certainly would accomplish.
MotoMotion “will further optimize multi-region production capacity, strengthen cross-region coordination, and reduce risk arising from any single market or policy change,” the filing states. “We will also enhance the responsiveness and flexibility of the supply chain to improve delivery stability and shock-absorption in complex environments.”
Continuing to plow investment into technology is not surprisingly also a priority. MotoMotion will continue to use digital tools to drive improvements in efficiency and cost optimization. The management team will continue to be “lean.” And technology will drive product innovation.
According to several sources online, Xiaoqin Li, who is married to Xu, is MotoMotion’s largest shareholder with a 67% stake in the business. In February, the company added manufacturing in Cambodia, setting up a subsidiary with a registered capital of $21.2 million, according to its first-quarter 2026 filing.
Also in the quarterly is the company’s intention to pursue a “Shop-in-Shop” retail model in the U.S. “to connect directly with consumers,” signaling another expansion of its MotoMotion consumer-facing branding strategy.
