by Vendors share mitigation, contingency plans, but can’t do much else until a firm decision is made in Washington
LAS VEGAS — Discussions about possible tariffs — whether from China, Canada, Mexico or other parts of the world — have been a large part of the discussion among wholesalers and retail customers at this week’s Las Vegas Market.
While there have been no firm answers relating to whether actual tariffs will be imposed, many are preparing for worst-case scenarios. For example, many vendors have been sourcing contingency plans, while some retailers have been either shifting to some domestic resources or buying product from U.S. warehouses sooner rather than later in order to avoid potential tariffs.
“We went through this several years ago and we went through it many years ago with bedroom duties coming out of China, so I feel like this is the same story,” said Adam Dunn, senior vice president of design at full-line resource Four Hands. “This would be our third time for major tariff shifts, so I think everybody is in a wait-and-see mode. We’ve been proactive on our side and have started to look at some new resources and what our possibilities could be, not just in Asia. We are starting to look in Romania and Turkey and other new manufacturing locations. But who knows what’s going to happen. Who knows if Mexico is going to be 25% and China is going to be 10%? We just don’t know yet.”
“I think the best thing you can really do is have conversations with your manufacturers and make plans on what the possibilities are of working together once tariffs go into place,” he added. “If you just have a knee-jerk reaction, you are just going to screw everything up.”
Sara Samieian, co-chief executive officer at full-line furniture resource Moe’s Home Collection, also has contingency plans to shift sourcing if needed. However, she noted that the company is not making any sudden moves before they become necessary.
“The majority of our product is developed in-house, so for us to move product from one factory to another factory is somewhat easier,” she said. “It is not like we are reliant on our factories’ designs. It is proprietary to us. But we have already have been making backup plans with factories in other countries that we can move to. We are not moving forward with the move until there is a decision about the tariffs, but it is all in motion. We are pretty agile and we feel pretty comfortable that we can pivot.”
They are the discussions that these and other companies are having with some customers at market, including larger retailers that typically buy in large quantities. While many retailers also aren’t making knee-jerk decisions to buy product contingent on an unknown tariff situation, some industry observers believe it makes sense for some customers and even consumers to buy now versus later.
“I don’t think people will hold off, and I don’t see why it would make sense to hold off,” said Moe Samieian, co-chief executive officer of Moe’s Home Collection. “I feel like if anything, it should be the opposite. They should be rushing to buy, and I think the end consumer should be rushing to buy, if they are really thinking about it. … As soon as anything is announced, prices will go up, so they should be buying now.”
The decision to buy sooner versus later depends on the retailer, but many vendors interviewed by Home News Now are reporting strong commitment levels and some strong order writing. Some of that has to do with a strong product mix here at market combined with a general sense of optimism for the year ahead given recent improvements at retail, versus concern about tariffs.
But as the issue continues to make headlines, vendors are doing their best to communicate their plans and what they are doing to mitigate the situation of potentially higher prices.
With all of its made-to-order motion and stationary upholstery coming out of Mexico, Flexsteel has communicated to dealers that it has contingency plans in the works.
“We have seen this before and will mitigate it again if we have to,” said David Crimmins, vice president of sales at Flexsteel, noting that it will develop the most workable solutions for its customers, which include contingency plans for high-volume frames.
Reb Nicolson, national sales manager at Armen Living, said that some customers are holding out on making any major purchases at least until the tariff issue is finalized. This includes larger customers that typically place container orders from Asia.
But he said the company also has sampled some products it has made in China in other non-tariff countries to determine what the quality and cost would be based on labor in those areas.
“You have to determine the total cost, and as long as the quality is there, you can go with that country,” he said. “We have a Plan B if we have to move.”
Other resources with U.S. production are focusing on their domestic capabilities here as an option, particularly focusing on major wood categories in their line.
Legends Home, for example, sources its upholstery, bedroom and dining in Vietnam, which is also potentially susceptible to tariffs. However, a significant part of its line is made at its Arizona factory, including mattresses, home office, home entertainment and some occasional.
“We are focusing on our domestic production,” said Tim Donk, vice president of sales operations and marketing coordination. “We’ve taken the foot off the gas on imports, but we also are waiting to see what happens.”
Domestic case goods manufacturer Fusion Designs also is touting its domestic capabilities for a line that includes solid wood bedroom, dining room and bar stools and chairs, all made in its Indiana production facilities. Marcus Bontrager, company president and owner, said that a number of dealers are looking for domestic suppliers like his company because of the tariff scenario.
“Imports have their place, but there are so many advantages to buying American,” he said, noting that dealers looking to be nimble in these uncertain times can make a switch to Fusion and expect to have made-to-order product shipped in seven weeks from the time of the order, and 10 days or less for a limited amount of stocked goods in its Essentials program.
But with so much of the wood side, and a growing percentage of stationary and motion upholstery imported, most are hoping that the situation can be worked out between the various countries, whether it be China, Mexico, Canada — plus any others hit with tariffs.
They are prepared should this come to pass. But they also admit there is not much they can do until something happens in real time.
“Everybody talks about it, but they can’t do anything about it,” said Ian Geltner, vice president of sales at full-line furniture resource Steve Silver Co., noting that the company also has contingency plans. “We are all going to deal with it and whoever reacts the best wins. It’s really going to be about counter punching, and this industry is really good at that.”
