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LORENZO Enhances PRC Presence with News S$14 Million Production Facility

Singapore: Lorenzo International Ltd – a regional integrated lifestyle furniture group – has commenced production at their new factory in Kunshan City of Jiangsu, China. According to a press release dated October 16, 2009, the new production facility located in Dianshan Lake Town has a net asset value of S$14 million (US$9.3 million) and occupies a land area of 40,978 sq m with a built-in structure measuring 45,672 sq m.

The establishment of the new production facility is in line with the Group’s announcement in HY2009 to streamline and rationalise operations, namely the consolidation of the Group’s production capacity in the new Dianshan Lake factory.

At present, about 30,000 sq m of the facility is utilised for wood-based furniture productions and warehousing while the remaining 15,672 sq m is catered to the manufacture of the Group’s leather upholstery collections and corporate showroom.

This production facility is expected to reach full production capacity by 2010. Production capacity will be boosted from the current 80 to 200 containers, translating into a 150 percent increment.

“We believe that the Kunshan City production factory will serve as a strategic platform for us to consolidate our production capabilities and further expand our presence within Asia as we respond to increasing demand,” said James Goh, Lorenzo’s Executive Chairman/ Group Managing Director.

Barring any unforeseen circumstances and any impairment charges, the directors expect the group to return to profitable in second half of FY2009.

Lorenzo owns 38 wholly-owned stores and 22 Licensing Retail System stores in six countries. Most of the Group’s products are sold under its “Lorenzo” brand. Apart from retailing its own products, the Group exports its “Lorenzo” branded products to more than 50 countries around the world. It also acts as an original design manufacturer to design and manufacture leather sofas under its customers’ own brands, and as an original equipment manufacturer to manufacture furniture based on customers’ designs.

Furniture Trade Between ASEAN Countries Up 13%

Singapore:Furniture trade amongst the seven ASEAN Furniture Industries Council (AFIC) has been growing at a steady rate in the past year, despite the challenging global economic climate, Chairman Jerry Tan said in his speech at the AFIC conference held on December 5, 2009, in Singapore.

According to Tan, latest statistics showed that the total volume of furniture trade amongst the seven AFIC member countries saw a 13 percent increase to US$14 billion during 2008, as compared to US$12.4 billion in 2007. Total furniture imports for 2008 amounted to US$1.8 billion (a 13 percent increase as compared to the previous year) whilst exports totaled US$12.2 billion (also a 13 percent increase).

“We are plodding along the path to recovery, with some welcoming signs that we are lifting ourselves out of the slump. The picture remains to be closely monitored for the new few quarters though. Not only is the international competition stiff, the field is also crowded,” he said.

He continued: "While we largely faced the same set of global opportunities and challenges, our countries have complementary strengths and our players, complimentary skills. That means we can each develop our own capabilities and business models as well as cooperate and tap on each’s complementary strengths to leverage business opportunities at the same time."

To meet these challenges, Tan urged member countries to gear up quickly on their presence in existing markets and continue to explore and tap new markets. “The current slowdown is not a permanent problem. Eventually the business cycle will turn, and the global economy will pick up again. The question is how soon, and how strongly,” he continued.

“Innovation and an enterprising spirit will be the platform which we must continue to build our differentiating factors to give us the competitive edge and set us apart in a crowded playing field,” he explained.

Nevertheless, Tan reassures that there is still a need for AFIC members to cooperate and collaborate. He revealed that by the end of 2015, ASEAN will be effectively a free trade area, so members should collectively work together to attract foreign buyers.

One such effort is already on going. The increased intra-ASEAN trade and the joint marketing and promotional programmes that AFIC members successfully organised for their exhibition circuit in March are positive moves towards this economic collaboration.

Tan said that AFIC has been deliberating about the expansion of the AFIC Membership and agreement was subsequently reached to include a new membership category - that of Affiliate Member and Vietnam’s HAWA was the first to be inducted in late 2009. Tan says he hopes to see more Full and Affiliate Members on board, so that together, AFIC members can pool their resources and provide industry players with a key foundation for boosting efficiency and sustaining dynamic growth.

URBAN FOUNDRYRY TO DESIGN FURNITURE FOR APEC LEADERS’ RETREAT

Singapore: Singapore Mozaic member Urban Foundry has been picked to design and produce furniture for the APEC’s leaders retreat at the Istana.

This appointment by the APEC Singapore 2009 Organising Committee through MICA, was assisted and coordinated by Singapore Furniture Industries Council (SFIC) and IE Singapore to showcase Singapore’s creative talents in furniture design.

Urban Foundry Pte Ltd has since designed and produced 21 armchairs and 21 side tables that will be used during the Leaders’ Retreat at the Istana on 14 and 15 November 2009.

Its Managing Director, Felix Low is a self-trained Singaporean designer who established his very first furniture retail outlet in 2003.

Orders Returning Gradually To M’sian Exporters

Senai, Malaysia: Malaysian furniture manufacturers and exporters can expect a better year ahead as orders return, SHH Resources Holdings Bhd managing director Datuk Teo Wee Cheng said in a report by The Star on December 19, 2009. Although the rate of businesses coming is “gradual”, it is a “good sign”, he added.

Reasons for the growth in demand include the high quality of Malaysian furniture, and its exporters’ ability to deliver goods on time. Also, many international buyers have returned to Malaysia after trying to source from China. Moreover, these buyers also wanted to reduce risks by not being overly dependent on one import source, Teo said.
Teo and his company are targeting potential alternative markets in Australia, Japan, Europe and emerging economies especially China and India, as well as the Middle East. He explained that these destinations have shown that they are already recovering from the global economy crisis.

For the financial year ended June 30, 2009 (FY09), SHH narrowed its net loss to RM 760,000 (US$221,542) from RM 5.01million in FY08. Its revenue, however, slipped to RM 134.71million against RM151.33 million previously.

Indonesian Exporters Lobby Against China-ASEAN FTA

Jakarta, Indonesia: The Indonesian government is going to negotiate at least partial restoration of tariffs on some Chinese products, according to a report by Jakarta Globe. Indonesia was supposed to abolish these tariffs with effect from January 1, 2009, as part of the China-ASEAN Free Trade Agreement. The said categories of Chinese products include furniture, food and beverages, petrochemicals, textiles, footwear, electronics and steel and iron.

Domestic players have lobbied for the government to delay the implementation of the trade agreement because they believe they are at a disadvantage when Chinese companies enjoy lower production costs.

The Industry Ministry, which had previously expressed support for the idea of postponing the FTA, on December 15, 2009 said that it must be implemented as agreed.

“This is a multilateral agreement that should be respected,” said Agus Tjahayana, secretary general of the Industry Ministry.

If negotiations are held, China is certain to seek concessions in other areas in exchange for allowing Indonesia to modify its tariff obligations.

LCL Severely Impacted By Decline In Dubai

Selangor Darul Ehsan, Malaysia: Interior fittings and design company, LCL Furniture Sdn Bhd, has defaulted on RM 72 million (US$21.1 million) of repayments, according to an announcement made to the Kuala Lumpur Stock Exchange on December 10, 2009.

The announcement stated: “LCL has been severely impacted by the recent financial turmoil in Dubai, where property prices have plunged resulting in delay and non payment of its receivables. Hence, LCL and its subsidiaries have been unable to meet its repayment obligations.”

On the other hand, its parent company, LCL Corp Bhd, reported a decrease of 30.2 percent in Group revenue in the third quarter ended September 2009. Group revenue fell to RM 243.7 million from RM 349.1 million.

LCL said in its financial report: “This is mainly due to the lower progress billing for most of the on-going Dubai projects which are near to completion by 4th quarter 2009.”

It also added: “The Group has also recorded a loss before taxation of RM65.1 million as compared to profit before taxation of RM25.3 million as compared to the preceding year quarter. The losses were mainly attributed to the unexpected delay in the project resulting in cost overrun arising from the prolongation of projects.”

This makes the group one of the first high profile Malaysian firm casualties of Dubai’s financial woes. LCL is a well-known name in the Middle East, particularly, Dubai. The group has a subsidiary in Dubai (LCL Interior Contracting LLC), which in August 2008 had just won a AED 67 million (US$ 18.24 million) sub-contract from Taisei Corp to carry out interior fit-out works for Downtown Jebel Ali project in Dubai.

While LCL is not tendering new projects in Dubai, at the time this financial report was published, it said that it would still have to incur additional cost in right-sizing its operations in Dubai, i.e. workers compensations, logistics and pre-mature termination of accommodation arrangement.

The company stated in addition: “The uncertainties of the economic recovery in Dubai, where the Group derives its major sources of income from, will continue to pose challenges and difficulties to LCL’s operation. In light of the recent negative announcement with regards to the economic status in Dubai, we are assessing the situation and its impact to LCL financially.”

“The Group recognises that the prospect of the company now largely hinges on the economic recovery of the Middle East market. The Group now focuses its effort in its credit risk management and rationalisation of the Group’s operation. Taking all these into consideration, LCL will focus in securing profitable contracts from reputable clients in the domestic market, appropriate to its balance sheet position in order to ride through this challenging time.”

In an article published by the Star Biz Week on January 3, 2009, Low Chin Meng, Managing Director of LCL, said that 80 percent of LCL’s total revenue is accounted by overseas projects. This will have to change, as Low does not want to be overly dependent on one market or region to grow its out-fitting business. The focus, however, will still be on the Middle East, in other countries such as Abu Dhabi, Bahrain, Qatar and even Kazakhstan.

KBU Students Win Major Malaysian Design Awards

Kuala Lumpur, Malaysia: Three design students were given due recognition for their talents. Ng Foong Wai, Farah Hanafiah and Leong Wei Theng from Malaysia’s KBU International College’s School of Design. They won three awards in three different competitions.

Farah, who recently graduated from the BA (Honours) Interior Architecture & Design programme, won the Interior Design Awards 2009 (IDA 2009) for the student category. Classmate Ng won the Malaysian Interior Design Awards 2009 (MIDA 09) – student category, which was organised by Malaysian Institute of Interior Designers.

Leong was awarded the JDA Gold Award Winner in the JDA Junior Designer Award 2009. She received RM 5,000 (US$1452.86) in cash and a free trip to the Milan furniture fair. The JDA competition was organised by the local celebrity interior designer Eric Leong in collaboration with the Kuala Lumpur and Selangor Furniture Entrepreneur Association and iN Publishers.

In addition, Jane Ho, a member of KBU academic advisory board, also emerged winner in the Interior Design Awards 2009 (IDA 2009) for the professional category (F&B and hospitality).

Vast Furniture To Launch 2 Brand New Product Lines Within 2010

Selangor Darul Ehsan, Malaysia: With a fully equipped production facility in China, Vast Furniture Manufacturing (Kunshan) Co Ltd (Vast) is pulling out all stops to raise current output to the maximum capacity of 60 containers per month. In fact, if demand is sufficient, Vast is prepared to extend its factory space into the remaining land area not yet used.

According to the company’s executive director Chen Ying, the current factory stands on an area of 40,000 sq m, and is complete with metal forming capabilities such as cutting, bending, stamping, rolling, expanding and welding. In addition, it has a semi-automatic epoxy line, packaging line, and upholstery facilities for bed sets and related products. To top it all off, the factory is ISO 9001:2000; ISO 9001:2008; and SEDEX certified. Most of its beds comply with the safety test standards of EN747, BC8509 and EN1725.

For the past 20 years, Vast has been specialising in the production of conventional and modern bedsteads, bunk beds and futons made using metal, upholstery or in combination.

This year, Chen said, the company will be introducing a brand new product line – a range of space-saving, multi-functional bed sets and ottomans. Now in the development stage, this line of product is expected to feature single and double pullout mattresses from ottomans, as well as adjustable beds made using outsourced mechanism parts. Chen has set a target for his in-house R&D team to launch this range during the Malaysian International Furniture Fair (MIFF), to be held on March 2-6, 2010 in Kuala Lumpur.

In another six months’ time, Chen revealed that Vast has plans to debut its sofa production line. “We are now exploring the possibility of introducing a sofa line for residential and commercial use. We already have most of the necessary machinery in place. The technical investment needed to begin this new product line will be quite marginal, and we have the capital to do so,” said Chen.

More is to come from this Kajang-based company. Chen added that Vast will roll out also, a special range of dining chairs in the combination of metal legs and upholstered wooden seat frames. “There is a big market for this kind of chairs. And although a lot of Malaysian manufacturers are already supply dining chairs at very competitive prices, our metal handling expertise gives us an edge over others,” Chen explained.

“A plain metal chair with epoxy coating may look like it’s for the lower-end market. But our coating technology can give it a wood-like finishing. It works like veneer and the result is that it becomes anti-scratch with a beautiful wood profile,” Chen elaborated.

Chen added that this treatment lowers production costs by an average of 20 percent, when compared with full wooden chairs. Moreover, this technique allows him to apply different wood grains and colours on multiple kinds of leg shapes. Plus, it is easier to work with metal moulds than carving or bending wood.

With so much development in the pipeline, Chen says that he is also very keen to take on OEM orders for mid- to high-end upholstered and metal furniture. “With our standard compliances, certifications and machinery, we are in the position to supply products of this market range. Going into the lower-end will not help to improve our reputation, so we do have to be more discerning,” Chen continued.

Vast was established in 1990 in Malaysia and relocated to Kunshan city, Jiangsu in 2001. Vast is wholly owned by Metro Kajang Group (Malaysia). The company will also be exhibiting at Furniture China in Shanghai, on September 7-10, 2010.

Philippines Bracaces For Recovery Through Innovatation

Cebu, Philippines: The Filipino furniture industry is bracing itself for economic recovery through strengths in innovation. Its members have set up a network of raw material suppliers and manufacturers.

This network, called the Cebu Furniture Industries Foundation Inc (CFIF) is set to create a “scientific network of collaborators” to link local research and development with the needs of various industries, according to a report by the Manila Bulletin on December 13, 2009. Made up of academic institutions, exporters, producers and businessmen, this scientific collaboration is expected to materialise sometime in 2010.

Earlier on December 2, an Exporters’ Conference was held with the theme: ‘SME competitiveness through innovation’. The conference seeks to prepare the export industry for the upswing in the global market, through innovation in technology, materials, and marketing strategies, among others, said a report by Phil Star on November 30, 2009.

In another, the Materials Research and Development (R&D) Conference, is an offshoot of a government project to develop an inter-regional value chain to support the furniture, fashion accessories, as well as gift, toys and houseware sectors. The lack of supply of raw materials is a common concern among these industries.

In a press statement, the CFIF said the Materials R&D Conference aims to help exporters link up with raw material suppliers, maximise their design capabilities and improve other aspects of competitiveness. As a result of this conference, the Materials Library will be open to participants. It is the first of its kind in the country that provides a venue for designers and product developers to study traditional and new materials.

Export Decline Slows After 12 Months

Manila, Philippines: The country’s export decline slowed for the first time in 12 months, according to ABS-CBN News. In October, a single-digit drop was recorded, signalling the beginning of a slow recovery from the global downturn.

The news report quoted data from the National Statistics Office, which showed that Philippine export revenues fell 8.3 percent in October to US$3.66 billion. This figure represented an improvement from the 18.3 percent drop recorded in the previous month. Since October 2008, exports have been decreasing at a range of 11 percent to 41 percent.

For the first 10 months of 2009, exports dropped 27 percent to US$31.3 billion from last year's US$42.89 billion.
Electronics stood for the largest category of export from the Philippines in October. Other key export areas include woodcrafts and furniture, and metal components.

Indonesia Predicts Furniture Export to Increase 15% in 2010

Jakarta, Indonesia: Indonesia expects its furniture and handicraft exports to increase 15 percent in 2010, according to a report by Asia Pulse. This optimism comes after a deep slump in 2009, where exports are predicted to plunge 35 percent.

Data from the industry ministry showed that exports of handicraft and furniture were valued only at US$1.2 billion in the first nine months of 2009, down 29 percent from US$2.3 billion year-on-year.

The Association of Furniture and Handicraft Companies said a decline in exports have also been recorded by other countries in the region.

Indonesia fared better than Vietnam, which suffered heavier blow as it depends too much on the US market.

Vietnam, however, is a larger exporter, earning US$3.5 billion, when compared against Indonesia's export earnings of US$2.8 billion in 2008.

Illegal Logging Proveroved Costly for Indonesia

Jakarta, Indonesia: Indonesia lost US$2 billion annually between 2003 and 2006 from illegal logging, corruption and a lack of management in its vast forestry sector, reported the Financial Times on December 1, 2009.

The investigation by Human Rights Watch has found that cash leaking from Indonesia’s forestry sector over that period would have been sufficient to provide basic healthcare for 100 million people for almost two years.

The sum is described by report author Emily Harwell as a “conservative” estimate and compares with Indonesia’s 2010 budget of US$91.9 billion.

While the report acknowledges that Indonesia has made some steps to curb illegal logging under President Susilo Bambang Yudhoyono, it says the problem “remains immense”, that the sums involved are “staggering” and the judiciary is “deeply corrupted by illegal logging interests.”

The report also highlights pitfalls ahead as additional funds are channelled into Indonesia’s forests as part of a global initiative called Reducing Emissions through Deforestation and Degradation (Redd), a project to place a dollar value on carbon stored in trees.

Indonesia already has 27 trial Redd projects under way that are being funded by the World Bank, donor governments and the private sector.

Harwell warns that a lack of independent monitoring of the forestry sector, multiple conflicts of interest and a “pact of silence when it comes to data accessibility” will conspire against players’ ability to keep the projects clean.

President Yudhoyono said at September 2009’s G20 summit in Pittsburgh that Indonesia could cut its emissions by at least 26 percent by 2020.

Exporters Encouraged To Expand Locally

Manila, Philippines:The government is encouraging Filipino exporters to expand the domestic market as well. Emmanuel P Padiernos, vice president for market development of the Chamber of Furniture Industries of the Philippines, said this option can help some exporters to sustain operations, while the global market takes its time to recover.

“Many of those businesses closed because they have no fallback position," said Padiernos to the Manila Bulletin on December 5, 2009. Local fairs like the furniture and furnishings festival can be useful especially to those who wish to target the market in Manila.

“There were many indicators that the market has already recovered especially the United States and Europe, although recovery is slow. Some are saying that full recovery may take another two to three years,” he said, as a response to the October Manila FAME trade show – a comparable number of foreign buyers visited it, but the number of orders has decreased.

“They are very cautious and still watching the domestic market. Many of the foreign buyers were here to find new products and suppliers. Some only asked for prices, while others were on the look out for their competitors and what they are buying,” he added.

Exporters can also organise overseas trade missions to grow their export customer base. Emerging markets like Brazil, Russia, India, and China that have buoyant economies are worth exploring, he said.

Indonesia's Furniture Well Received at Index 2009

Jakarta, Indonesia :Indonesian companies have secured orders said to be worth over US$380,000 during the Middle East International Furniture and Interior Design Exhibition (INDEX) 2009, according to a news report by Fordaq. INDEX was held from November 14 to 17, 2009, at the Dubai World Trade Centre.

The head of the national exports development agency said that the interest garnered during INDEX 2009 in Indonesian furniture signifies that Indonesian timber products are gaining acceptance in the Middle-Eastern countries, Pakistan, East Asia and Africa.

At the fair, Indonesia was represented by 21 companies including some agencies operated by governmental institutions.

The fair had exhibits from 1,750 companies and agencies including Malaysia, Taiwan, Vietnam, and China.

November Exports Hits Record High

Guangdong, China: Single month furniture exports from Guangzhou recorded a historical high in November 2009, according to statistics by the Guangzhou Customs authority, the Xinhua news agency reported on December 16, 2009.

Nonetheless, combined figures for the period January-November 2009 show that exports have slipped by 5.9 percent from the same duration last year, to US$8.81 billion. Within this figure, furniture exported by general trade accounted for 70.1 percent, or US$6.18 billion, which represents a growth of 4.8 percent. Processing trade’s export was worth US$2.42 billion, which accounts for 27.5 percent of total exports and represents a decline of 25 percent as compared to the same period in 2008.

The Guangzhou Customs authority says that since the government raised export tax rebates to 15 percent in June 2009, the province’s export scales have expanded. A rebound was most strongly recorded in November 2009 – single month furniture exports hit US$1.02 billion, rising by 13.7 percent from the same month in previous year.

Hebei Furniture Exports Rose 7% in October

Heibei, China: The International Tropical Timber Organisation (ITTO) reported a seven percent rise to almost US$19 million in value of furniture exports from Hebei province, China, in October 2009.

This is the highest monthly figure since the beginning of 2009. From January to October 2009, the overall furniture exports fell 15 percent to US$140 million.

Key markets such as the European Union (EU) saw furniture imports from Hebei grew 11 percent to US$65 million in 2009. Furniture exports to the US however fell 34 percent. The total value of exports from the US and EU accounted for 70 percent of Hebei’s total export amount.

Exports to Asian markets had mixed fortunes. The value of furniture exports to Japan rose 22 percent while exports to South Korea fell 25 percent.

Local experts have suggested that China’s furniture export-focused enterprises to diversify their markets. This is especially vital as the EU and US markets are increasingly demanding and it is both costly and difficult to meet the requirements in these regions.

Jiangmen City, Forerunner Of Traditional Chinese Furniture

Guangdong, China: To promote the further development of the traditional furniture industry, a traditional furniture appraisal conference debuted on December 11-15, 2009 in Jiangmen City, Guangdong, China. This event was organised by the Jiangmen city government and the China National Furniture Association.

More than 1,000 local and international experts, scholars, collectors, and enthusiasts in the industry attended this conference.

Jiangmen City Economic and Trade Bureau chief, Wen Weiwen said that the city is best known for its traditional furniture in the country, according to a report by Nanfang Dushi Daily. There are plans to grow the RMB 3 billion industry to RMB 10 billion within five to 10 years.

At present, there are some 600 enterprises engaged in traditional furniture industry in Jiangmen. Among them, more than 500 are located in Xinhui county and Taishan city. According to official statistics, Jiangmen city's industrial output value of traditional furniture reached RMB 30 billion last year, making it the forerunner in this category among other industrial bases in China.

Yuhuan County Devastated Over Dubai Crisis

Zhejiang, China: Yuhuan County, a European classical furniture production base in Zhejiang province, has been hit hard by the credit crisis in Dubai, as reported by the First China Business Network (1CBN). According to the report, there are more than 200 small furniture enterprises in the county, all of which export about 85 percent of their output. The Middle East accounts for 60 percent of these exports.

Yuhuan Fuhao Furniture’s factory, warehouse, and front porch are filled with containers and items that were bound for Dubai and other Middle Eastern countries, the report said. Due to the impact of the crisis in Dubai, these pieces of furniture have been stacked in there for nearly two months.

The company exports all of it products, and the Middle East markets account for more than 80 percent. Its assistant general manger, Lin Rubiao revealed that these backlogs are worth nearly RMB 8 million. He lamented that throughout the company’s decade-long history, he has seen nothing like this sight before. The month of November proved to be the worst for the company – only nine containers, probably worth more than RMB 100 million were shipped out. Usually, the company exports a minimum of 30 containers monthly, he said, adding that there is nothing he could do now except to wait for orders to come in and for customers to ring him up.

Dubai is the Middle East's largest re-export market, and exports of Yuhuan County’s furniture transit there. Many factory owners flew to Dubai to assess the situation there first hand. Lin said that his CEO had also just returned from Dubai, and said that his clients’ warehouses are filled to the brim, with nowhere to go.

Standardised Tibetian Furniture

Tibet: Tibet’s Quality and Technical Supervision Bureau has recently formulated standards on Tibetan-style furniture, to ensure the quality of the traditional furniture and avoid arbitrations and trade dispute between sellers and consumers.

According to China Tibet Online’s report on November 27, 2009, the Universal Technical Norms on Tibetan-style furniture stipulate the technical terms, definitions for the furniture, means of testing, procedures and rules for check-up, instructions for use, symbols, standards for package and transportation, storage.

According to the regulations, the norms can be applied to Tibetan-style furniture, such as Tibetan beds, Tibetan cabinets and tea tables used by Tibetans.

Compared with other types of furniture, Tibetan furniture is mostly engraved with patterns as dragons, exotic animals, leaves or bamboo and painted in colours. Most are made of solid lumber or boards.

Cerruti Baleri to Open Furniture Store During Design Miami

London, UK: Furniture label Cerruti Baleri has launched its first US boutique in Miami’s design district on December 1, 2009. The opening coincided with Art Basel 2009 and Design Miami 2009.

The brand, which is completely independent of the Cerruti prêt-à-porter label, has mainly focused on Asian openings (Jakarta, Singapore, Beijing) in recent years.

Owned by Italian entrepreneur Nino Cerruti, Cerruti Baleri prides itself on having launched the career of star designer Philippe Starck with the development of his Mac Gee shelf in 1984 and today promotes renowned figures including Jeff Miller, Arik Levy and Xavier Lust.

The new store, which carries the label’s full range, is located at 4141 Northeast 2nd Avenue in Miami’s design district as part of 4141 Design, the country’s largest collection of Italian interior design shops.

Art Van Named Retailer of The Year

Florida, US: Warren-based Art Van Furniture has been named Retailer of the Year by national trade publication Furniture/Today. The award was announced on December 3, 2009 as part of the Furniture/Today Leadership Conference in Naples, Florida.

Chairman and founder Art Van Elslander credited his employees in a press release issued on the accolade.

“Buildings are just the brick and mortar, but the heartbeat of a company is its people, this award is really theirs, not mine,” he said.

The award was given both in recognition of the company’s 50th anniversary and its national level of sales.

Furniture/Today rated Art Van as 19th on its national list of bedding sales, posting sales of US$91 million in 2008. It also reported that Art Van sells more mattresses in Michigan than any other retailer.

The trade publication ranked Art Van as No. 17 of its top 100 stores rated by revenue.

According to the Crain’s Private 200 list released in May 2009, Art Van’s total revenue amounted to US$440 million in 2008.

Brazil to Cut Tax for Furniture Construction Supplies

Rio De Janeiro, Brazil: The Brazilian government announced on November 25, 2009 that there will be further tax cuts for furniture and construction supplies.

The tax on Industrialised Products (IPI) for the furniture sector, ranging from five to 10 percent depending on the product, will be waived till the end of March 2010.

The tax cut on construction supplies, which was supposed to last until December 2009, was renewed until June 2010.

The tax reduction for furniture was aimed at boosting the domestic market, which has been affected by the weak sales figures in the international market, Finance Minister Guido Mantega said.

Since the beginning of 2009, Brazil has announced several tax waivers in sectors such as vehicles, construction supplies and household appliances to boost domestic consumption and help its economy bounce back from the financial crisis as soon as possible.

The IPI cut in the furniture sector will cost the government a total of BRL 217 million (US$125.4 million), while the cut in the construction supplies sector will cost another BRL 686 million.

Copeland Furniture Named 2009 Sage Winner

High Point, US: Copeland Furniture of Bradford, Victoria has been awarded the 2009 Sage Award for environmental excellence, the American Home Furnishings Alliance (AHFA) announced.

The award programme was launched to recognise environmental accomplishments within the home furnishings industry. The competition was open to retail, manufacturing and supplier companies in both the furniture and bedding industries.

“This year’s entries highlighted how pervasive the quest for environmental excellence has become within the home furnishings industry,” AHFA CEO Andy Counts observed.

Copeland Furniture was singled out among this year’s entries for its “exceptionally focused” approach to sustainable business operations. The company holds a Forest Stewardship Council (FSC) chain of custody certificate and currently manufactures eight product groups that qualify for FSC on-product labelling.

Wood for these collections is sourced from forests within 100 to 500 miles of the plant. Ninety percent of the electricity used to power the manufacturing equipment comes from low emission sources.

According to Copeland President and CEO Tim Copeland, the company is in the process of converting its heating plant from oil-fired hot water to wood-fired, using its own waste scrap as fuel.

The scrap not used as fuel is reprocessed into wood pellets that are being sold locally.

Tough Times for South Africa's Furniture Retailers

Johannesburg, South Africa: Furniture retailers faced a tough 2009 as job losses shrank their potential customer base, which was already bruised by over-indebtedness, the Times Live reported.

Evan Walker, retail analyst at RMB Holdings, a diversified financial services group, said bad debts and retrenchments have wiped out 15 percent of the furniture retailers up-and-coming credit customers.

JD Group, South Africa’s biggest listed furniture retailer, released annual results in November 2009, and it showed “unacceptably high” levels of bad debt. Nevertheless, they believe the worst was over.

Bad debts written off had increased more than 20 percent from ZAR 862 million (US$115.4 million) to more than ZAR 1 billion.

The restructuring JD embarked on 18 months ago was complete, with the final charges of ZAR 98 million written off.

Lewis Group, the second biggest listed furniture retailer, released healthier results. As the bulk of Lewis’s base is not highly indebted or are not as exposed to the credit vagaries as those of the JD Group, that helped wrote off 10 percent of bad debts for Lewis.

Despite incurring bad debts, both companies recorded increased sales in 2009. Lewis increased revenue by 7.9 percent to ZAR 1.95 billion in the six months ended September 2009, while JD Group grew turnover 2.5 percent - in a declining market.

Several analysts have long called for JD to reduce its brand portfolio, but Chairman David Sussman does not agree, saying this would reduce the group’s market share.

Lewis only carries the Lewis brand currently while JD promotes several brands such as Morkels and Bradlows. In spite of the tough outlook, analysts expect earnings to rise for Lewis and JD in the year ahead.

Three New Members Inducted Into The American Furniture Gall of Fame

High Point, US: Three industry leaders have been inducted into the American Furniture Hall of Fame. Joining 78 Hall of Fame members are Joe Carroll, publisher of Furniture/Today; M Farooq Kathwari, president, chairman and CEO of Ethan Allen; and Steven M Kincaid, president of Kincaid Furniture Co.

The international banquet was attended by nearly 400 retailers, buying group members, interior designers, manufacturers, suppliers and association leaders. It was hosted by Libby Langdon, HGTV personality, interior designer, small space expert, and author.

The inductees were elected by members of the American Furniture Hall of Fame Foundation, Inc based on detailed information about their professional achievements, personal standards and civic involvement.

The voting period began July 1, 2009 and ended August 24, 2009. Only members of the organisation are eligible to nominate, second and vote.

Habitat Aims to Return to Profit Through "Giveaway Deal"

London, UK: A cost-cutting drive aimed at ending a five-year run of losses at Habitat –the one-time trendsetter in furniture design –and returning it to profit is being planned by its new owners after what is being described as a “giveaway deal.”

According to the Telegraph, Retail Investments, a consortium headed by Hilco, the turnaround specialists, has bought the loss-making chain of 71 shops after settling on terms that involved the Swedish parent agreeing to write off debts and provide working capital of EUR 50 million (US$72 million) to give the business a fresh start.

Mark Saunders, Habitat's chief executive and ex-Levi Strauss high-flier, is staying on to help Hilco with its recovery plan.

The business lost more than GBP 13million in the 12 months to March 2009 but Saunders, who is believed to have tabled a management buy-out bid, has brought more customers into Habitat shops with the help of marketing changes.

The Kamprad family, founders of the hugely successful Ikea chain, have struggled to repeat the success enjoyed by Sir Terence Conran, who founded the business in 1964.

Despite a series of product changes, the Kamprads have failed to make a profit from the Habitat operations since the 2004-5 trading year.

Hilco, which specialises in restructuring ailing businesses and whose private equity arm bought the now-collapsed Borders bookstore group in the summer, is understood to have provided about EUR 15 million from its own resources to secure the deal.

Hilco strongly denies suggestions from credit insurers that it has considered a pre-pack deal involving placing Habitat into administration and then buying the company debt- free.

The new owners plan to take a close look at the 400-company supplier chain in the search for savings but are said to have no plans to shut stores. Habitat has 35 in Britain, 26 in France, five in Spain and five in Germany and employs more than 1,500.

The chain has arguably been a victim of its sister company’s success in the UK. Ikea has revolutionised the homewares market as much as Habitat did following its launch.

John Lewis Sees 32% Jump in Furniture Sales

London, UK: Department store chain sees “another excellent week’s trading”, with home up 15.5 percent and some stores reporting double-digit growth on 2008 figures, reported DIYWEEK.net on November 27, 2009.

The pre-Christmas rush continues to boost John Lewis’ sales, as the retailer reported a 14.9 percent growth in sales for the week to November 21, 2009. Home was up 15.5 percent on previous year, with furniture up an impressive 32 percent and seasonal gifts 14 percent ahead of the same period in 2008.

The company was also encouraged to see sales of its big-ticket items ploughing ahead, with kitchens and large electrical both up 20 percent of previous year.

John Lewis's director of selling operations, region b, David Barford said of the results: "I am delighted to report on another excellent week’s trading across the division - we beat last year’s (2009) sales by 15 percent. Ten branches achieved double-figure increases against their 2008 score, and online sales were up by nearly 36 percent on last year (2009)."

He added: "With the week to date already in double-figure increases against last year (2009), we should have another cracking trading week to celebrate in a few days’ time."

Two of the strongest performing stores in the chain were Bluewater, which saw a sales growth of 25.7 percent and Trafford with an increase of 21.7 percent on previous year.

Profit and Improved Sales for Hooker in FISCAL 3Q2010

Virginia, US:: Hooker Furniture reported net sales of US$52.6 million and a net income of US$957,000, or US$0.09 per share, for its fiscal 2010 third quarter that began August 3rd and ended November 1st, 2009.

Net sales for the third quarter of fiscal 2010 decreased US$16.4 million, or 23.8 percent, compared to US$69 million for the third quarter of fiscal 2009.

Net income for the quarter decreased by US$2 million, to US$957,000, or US$0.09 per share, compared to net income of US$3.0 million, or US$0.27 per share, for the fiscal 2009 third quarter.

Operating profitability decreased in the 2010 quarter to US$1.8 million or 3.4 percent of net sales, from income of US$4.7 million or 6.8 percent of net sales in the 2009 quarter. This is due to lower net sales, higher discounting and higher overhead and operating expenses as a percent of net sales.

Gross profit declined US$3 million to US$12.7 million, compared to US$15.7 million in the same period a year ago.

Gross profit margin increased to 24.1 percent of net sales in the current quarter compared to 22.7 percent of net sales in the same period last year. This is mainly a result of lower freight costs on imported wood and metal furniture.
Selling and administrative expenses decreased by US$637,000 to US$10.9 million, or 20.7 percent of net sales, in the 2010 third quarter. In comparison, selling and administrative expenses were US$11.5 million, or 16.7 percent of net sales, in the fiscal 2009 third quarter.

The decrease in selling and administrative expenses was due primarily to lower selling expenses on lower sales volume, lower compensation, benefits and other expenses as a result of workforce reductions implemented during fiscal 2009, and other actions to curtail spending in reaction to lower sales volume.

These decreases, however, were partially offset by US$152,000 in increased marketing and sample expenses in the upholstery division to support extensive new product introductions for the recent Fall High Point Market.

Additional expenses recorded in the third quarter included severance costs of US$521,000, and US$385,000 in charges to write down certain supplier-pledged collateral to its net realizable value.

Cash and cash equivalents increased by US$22.9 million to US$34.7 million as of November 1, 2009 from US$11.8 million on February 1, 200, principally due to inventory reductions in response to reduced incoming orders and shipments.

Inventories declined 44 percent to US$33.5 million as of November 1, 2009 compared to US$60.2 million at the end of fiscal 2009.

The company has no long-term debt at November 1, 2009 and has US$13.3 million available on its revolving line of credit at quarter-end.

At its December 8, 2009 meeting, its board of directors declared a quarterly cash dividend of US$0.10 per share, payable on February 26, 2010 to shareholders of record at February 12, 2010.

LA-Z-Boy Shares Soar AMID Possible Further Cost Cuts

New York, US: Shares of La-Z-Boy Inc soared as much as 30 percent after the furniture maker’s bullish comments on its fiscal second-quarter conference call pleased investors, according to Dow Jones Newswires’ report on November 18, 2009.

La-Z-Boy reported it swung to a profit in the quarter ended October 24, 2009 as it continued to offset slumping revenue with aggressive cost cuts.

Faced with a difficult sales environment for its namesake recliners and other products, the company has been slashing costs to stay profitable over the past three quarters.

“La-Z-Boy reported earnings of US$5.9 million, in November 2009, compared with a loss of US$53.7 million a year earlier.”

He added the company has the “cleanest balance sheet in the industry” and posted improving sales sequentially in all of its business segments, which Sozzi said contrasted with other furniture makers such as Furniture Brands International Inc. and Ethan Allen Interiors Inc.

"La-Z-Boy is in a good position going into 2010," Sozzi said.

La-Z-Boy ended the session up 29 percent to US$9.24 after earlier rising as high as US$9.34. Shares have more than quadrupled year-to-date.

La-Z-Boy reported earnings of US$5.9 million, or US$0.11 a share, in November 2009, compared with a loss of US$53.7 million, or US$1.05 a share, a year earlier.

Gross margin climbed to 31.6 percent from 26.1 percent.

Chief Executive Kurt Darrow said that once upholstery operations are running in Mexico, it will save the company about US$20 million on an annual basis.

In addition, the company has completed the consolidation of its North Wilkesboro’s operation into its Hudson’s plant. Both areas are within North Carolina.

The changes to the casegoods segment, including vacating a leased warehouse in Statesville, North Carolina, should save about US$5 million to US$6 million a year.

He also said on the conference call, according to a FactSet transcript, that he thinks the company can lower its quarterly losses in retail sequentially in its fiscal third and fourth quarters, but the company will not be able to do it with the same magnitude as the last 12 months.

Darrow however, had warned that the industry is not out of the woods yet, but La-Z-Boy is making "great progress.”