by While many said the issue did not come up in many discussions, some of the product shown clearly aimed to alleviate potential pricing impacts down the road
HIGH POINT — Seeking to limit the impact of final tariffs that have yet to be determined, a number of companies headed into market with a game plan that could protect customers and consumers from spiraling costs moving forward.
And while many executives described the atmosphere at market as business as usual with the subject of tariffs gaining little play in discussions, it was clear that some companies have started to pivot in order to ward off a severe downturn in business, or worse.
Of course, the most dramatic moves have come from companies facing high tariffs on China-made products that were upwards of 145% before this weekend’s announcement that they will be lowered to 30% for 90 days while the two countries work out a final agreement. This includes upholstery resource Nice Link Home Furnishings, which has shifted the bulk of its China-made product to Vietnam.
In late April, it also sent about 50 of its Chinese staff to Vietnam to set up a dry room to handle its higher-end products requiring wipe-offs, a process that uses a chemical treatment to give the leather a high-low depth, particularly on stationary upholstery.
“That has always been a big part of our business and today it is a lesser part because of all of our motion, but that is where Nice Link started,” said Jay Carlson, president of Nice Link. “Those better goods were always done in China but now the world changes. … We have our Chinese workers working with our Vietnamese workers as we are training and getting more labor so we can turn on a dime.”
While he noted that the company needs more workers in Vietnam to handle the extra product formerly produced in China, he said the shift has been mostly successful thus far as the Chinese staff continues to train and work alongside the Vietnamese workers. Today they are producing between 80% and 90% of the finished upholstery product the company previously flowed to the U.S. market from China, up from about 50% in early April. That additional product formerly made in China will begin shipping from Vietnam in June.
The company continues to use its Chinese production facilities for product that ships to Canada and other international markets. The facilities also continues to produce some special order product and product that can shipped in mixed containers for the U.S. market.
“We have it figured out, because we are a global brand and we are a manufacturer, too,” Carlson added. “We have a factory mentality so we use that wherever we go.”
And before tariffs of 145% went into effect, it also moved inventory available from China into its four U.S. warehouses, three of which are for finished furniture and one for fabric.
The company also is producing more occasional groups out of Vietnam that are in addition to the groups it was already producing in Vietnam. These include seven new groups available in five different finishes that it introduced at the April market. Retailing from $599 to $699, these were shown with various upholstery groups throughout the showroom.
Spectra Home, which has production in China, Cambodia and Vietnam, has been shifting product from its China plants to source factories in Vietnam in order to avoid tariffs that were as high as 170% during the High Point Market, including a prior 25% tariff on China product.
“We are getting anything I have in China out of China,” said Spectra Home President Jim Telleysh said at market, noting that the company also is looking to increase its capacity out of Cambodia with a second facility in that country.
“We are going to do everything we can to hang on to that customer and make sure we continue to provide them great products at a great value and with great service,” he said.
The company also offered additional footprints to several upholstery groups in its lineup this market, adding pieces such as a smaller sofa and a square sectional, for example, to groups with a larger sofa and a regular sectional. This is boosting both efficiency and output at the factory level, which in turn helps lower costs.
“What we did from a company standpoint is go back to basics,” he said, noting that the move allows the company to be more expansive on a single group by offering more options. “We want to be more to more people. It also definitely helps our efficiencies in our factories.”
At market, he noted, customers responded well to the different styles and the additional SKUs.
“We want to be more expansive on a single group and give our customers more options,” he said. “Plenty of customers are going to come in and see this and say, ‘You know that’s too big at 96 inches.’ Well, I’ve got the 84-inch version of it as well. Or they will say, ‘I wish you did this in a sectional.’ Well we do.” Or “I love the arm; I wish I could have that in a sectional.’ Well now you can.”
John Lannertone, vice president of sales at Modus Furniture, said the company initially had some exposure to China with products such as upholstered beds. It also has shifted production on many of those models.
“We have a really successful bed program in China that we don’t want to lose, but we have already taken 19 frames over to Vietnam that we have gotten really good pricing on,” he said, noting that even at 10%, Vietnam is much more competitive. “The transition has been smooth. I have the Vietnamese beds here, and they are gorgeous.”
The company also had seven new wood bedrooms and 12 new dining sets from Vietnam that are part of its product mix outside China, which the company and its customers are hoping do not face tariffs much higher than 10%.
“We will bring whatever we have brought and stand by it as long as the tariffs don’t become stupid,” Lannertone added.
AICO showcased products from Vietnam and Turkey as well as China in High Point.
“As a globally positioned company, AICO remains focused on marketing its products across both international and domestic markets,” said David Koehler, president.
“We continue to drive forward with an aggressive, diverse product development strategy focused on delivering high-impact new product, and this market reflected that once again,” Koehler added of the company’s launch at market, which included two new complete collections of bedroom, dining room and living room, five new upholstery/occasional table collections and three bedroom collections, along with new top of bed, lighting and pillows.
“Upholstery remains a key growth driver for us, and our five new living room collections (Gineverra, Messari, Kinglyn, Cloche & Avenya) helped us continue the momentum at the market,” he said, adding, “Our two new complete collections, Reef Point and Shorewood, brought a relaxed, casual aesthetic infused with a Michael Amini twist — an approach that really struck a chord with buyers.”
He added that the company’s modern and contemporary bedrooms, Pavira, Pavira-Walnut and Kayner, also performed well as customers were drawn to their shapes and varied use of materials with subtle lighting accents.
“Our customers are looking for inspiring, fresh, differentiated products that offer real value to their customers, and that’s the lens we use for the products we create,” he said. “Despite the ongoing uncertainty in the macro environment, we were pleased to see the level of engagement and order activity at the show. Several customers told us that regardless of the tariff talk or broader economic pressures, they know they’ll need new merchandise on their floors, and they are buying accordingly. That reinforces our belief that our aggressive pace of product development is helping our customers gain share, stay current and be well-positioned for what’s ahead.”
Others who are not in China have strategies in place to minimize the impact of tariffs on customers. For example, case goods resource Winners Only once produced home office in Taiwan, but is now producing a reintroduced office line in Vietnam, where company President Sheue Wen-Lee said the pricing is significantly lower.
“Taiwan used to be 100% over Vietnam pricing,” she told Home News Now.
The line also has been reengineered to include smaller desks and companion hutch units and smaller bookcases, for example, which help reduce the cost. Likewise, it is producing smaller-scale bedroom in Vietnam, she noted, “so when the tariff is firm, we know how to deal with pricing and so pricing may almost look close to what it was before. We are aiming for that.”
In addition, the company is looking to move some of its lower-priced dining and occasional to Malaysia, which many in the industry also are hoping receives a lower tariff.
While much of its floor included some imports, Ashley Furniture is completely out of China, and showcased a mix of product from other Southeast Asian countries with lower tariffs such as Vietnam.
It also touted its domestic offerings as part of its largely diversified supply chain. As the company has seen in the past with Covid, that U.S. product is proving to be an advantage today in the realm of tariffs.
“We have a unique advantage because we are such a large domestic manufacturer,” Ashley President and CEO Todd Wanek told Home News Now of the company’s domestic case goods and upholstery offerings. “So I think everybody understands if tariffs go up overseas, it is going to be less if it is U.S produced. We have been very upfront about that and we have invested more in our factories than anybody else, as you know.
“And it’s important to note that I think the mistake the industry made — if you want to call it a mistake — is everybody pivoted overseas and moved 100% of their business overseas. You should never have one single source in your supply. You should always have diversification, and having a U.S. supply chain and manufacturing should be important in the total mix of business.”
In launching its largest upholstery offering in company history, Universal Furniture offered about half its mix from its domestic North Carolina facilities and the other half from Vietnam, which currently faces a 10% tariff, as do other countries outside China.
Yet complicating matters from a domestic standpoint is that some 30%-40% of its fabrics are made in China, which can drive up the cost of finished goods, depending on the final tariff rate. In addition, things like steel components such as springs, also face a 25% tariff no matter the country of origin outside the U.S.
President Sean O’Connor told Home News Now at market that the company is addressing such cost increases with a minimal surcharge on domestic and imported product. It also is ordering more fabrics from outside of China.
“Yes, we are going to have to shift China fabrics elsewhere,” he said. “There are a few things coming back here, but it’s really the mills that are moving out of China. They are going to Cambodia; they are moving to Vietnam. And those patterns are going wherever they are going. What we decided as a company was to also just double down and add more SKUs from some of our domestic programs to become a little more important to them.”
Yet despite the tariff issue, he said, the company had a strong market in terms of attendance and interest in new product.
“Everybody’s looking for good product and companies to support them, so we have had a really, really good market,” he said.
Bassett Furniture also had a big push for its domestic programs on the upholstery and wood side of the business, including a revamped BenchMade dining program that offers tables with self-storing leaf functionality. But it also saw strong interest in its Vietnam-sourced wood furniture and motion furniture lines, despite the threat of tariffs.
“I was expecting the worst and it didn’t happen,” Bassett CEO Rob Spilman told Home News Now. “It was better than I thought it would be. We have three major product focuses that we wanted to get off the ground and they all worked, including a new case goods collection, a new sleeper program and our BenchMade dining. And all that stuff did really well.”
When asked if buyers hesitated on commitments or orders on new product, he noted, “If they did, they didn’t come to market.”
“And we definitely had some of that, but the ones who showed up bought. And we actually wrote. We are not a big container company, but we have a big consolidation warehouse in Vietnam. And I said, ‘Guys, if we don’t start using this we are going to close it,’ and they really pushed hard and we wrote containers this time, which we don’t normally.”
“Like everybody, we worked hard, prepped hard and we had specific goals in mind and specific accounts in mind,” he said, adding, “We signed a couple of new galleries, which is a big thing for us, and new studios, and we also have been working hard on the interior design trade. If you asked me last week, would you take what we just saw here for the last few days I would say ‘hell yeah.’”
Micah Swick, president of full-line resource Bernards Furniture, said that the company came into market with a plan to offer some of the highest level design and price points with its new 50-plus-piece Pagosa collection, which he estimated was about 20% higher in price than it’s ever been on a single collection.
“This is by far the highest price point we’ve offered,” he said, adding he was confident it would receive interest from its customers. The proof came when one of his largest customers spent twice the amount of time in its showroom at market.
And while tariffs have created some uncertainty in the marketplace, he said the company had a strong market overall.
“Yes, this is going in production,” he said of Pagosa. “They want it for the fall selling season. We are going to drop the orders this week. It is the same factory we are already working with — a very reliable factory — and we should have it in the marketplace in September so we are going to have to hustle.
“They are committing,” he added. “We took more written orders at this market than at any market since I joined the company — in March 2022 — and what we did not receive in written orders we received in commitments. It was a very different market than what I was concerned might be the reality.”
Thus, through focused and determined strategies, furniture resources of all kinds yet again illustrated what many described as the industry’s resiliency to weather tough times, going back to the financial crisis, Covid and related supply chain issues to today’s issue of tariffs.
“We have been through a pandemic and then we had all the freight surcharges and all that,” said Lannertone, of Modus Furniture, which also had a major transformation of its showroom that created a dramatically different space that would appeal to retailers and designers alike. “And now we have the tariffs. They (buyers) are becoming used to the transitions we have to make and say, ‘Oh, we have another one of those; let’s get ready and shore things up and buy what we need.’ I found that buyers were really excited to see the new goods and our new showroom layout. They didn’t come here unsure about the tariffs. They just came here to buy.”
Yet industry officials also note that there are still some things beyond their control regardless of their ability to pivot or even put a positive spin on challenging times. That includes consumer confidence, which remains at low levels, no thanks to the administration’s hard-line focus on tariffs.
Veronica Schnitzius, president at upholstery manufacturer American Leather, said that she sees a lot of opportunity in the middle and affordable luxury markets where “we compete pretty heavily.”
As a domestic producer, she believes the company also is in a strong position despite some materials and components being subject to tariffs.
At market, she said, traffic and interest in its product line were strong. But she also believes the uncertainty factor among consumers relating to tariffs could impact the industry moving forward.
“I am not so concerned about tariffs for the supply chain,” she said, adding, “I am concerned, don’t get me wrong, but I am more concerned about consumer confidence. I think our customers are worried about traffic and about people pulling the trigger. And especially with the uncertainty.”
That uncertainty has caused swings in the stock market, which also impacts how much or even whether people are willing to spend at all.
“People in this world need to know that I have $10,000 in the bank and tomorrow it is going to be worth $10,000. If tomorrow it is worth $7,000 or $12,000, my decisions are very different. That is what I am concerned with, the stability in the market over the next six months. … That said, American Leather has been in a great position. We feel incredibly lucky, but we are being thoughtful about how we look at the next six months because of consumer confidence.”
