Our team traveled for the first time to Guadalajara, Mexico, for the biannual Furniture Expo. We are told the February market is stronger than the August one, and we were blown away by the crowds, energy and enthusiasm for strong business this year.
Following Covid years with no Expo, plus supply chain challenges, Mexico now has a terrific opportunity to nearshore upholstery and case goods, offering comparable prices at speedier delivery times, with reliable quality and the ability to offer special order and change orders more easily. This sentiment was pervasive among exhibitors, who feel the momentum shifting their way.
The halls were filled with companies offering contemporary upholstery and plenty of casual/outdoor offerings. We noted the smaller scale of many of the SKUs because of smaller homes in Central America and the use of more colors and varying raw materials, such as plastic and other synthetics.
Many American furniture providers were there seeking reliable vendors, hedging against the country risk issues with China and the skyrocketed container costs of 2022. However, many CEOs were quoting $1,000 container rates from Asia currently, and wondering if there was even a need for reshoring now. How quickly some forget the pain of the $20k+ containers, slowdowns, harbor delays and demurrage fees. We suspect prudent retailers will have a balanced and well-diversified sourcing strategy going forward.
Stuart Stump Mullins is a partner in Charlotte, North Carolina-based merger and acquisition specialist Stump & Company.