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Int’l Furniture Centre & IFS/AFS Cooperate To Raise Profile In March 2010

Singapore: In efforts to attract more trade buyers to the International Furniture Centre (IFC), its managers will cooperate with organisers of the International Furniture Fair Singapore/ASEAN Furniture Show (IFFS/AFS) 2010 to create a link between the two venues.

The IFFS/AFS is held March 9-12 at the Singapore Expo, and attracts more than 15,000 visitors annually. IFC is the nation's premier showcase for furniture. It is located within Sungei Kadut, where furniture factories and head offices are concentrated. Opened all year round, the IFC complements IFFS/AFS by offering an additional furniture supply source to trade buyers.

Earlier this year, the IFC set up a booth at IFFS/AFS 2009 to raise awareness of the permanent showroom, which houses Singapore’s finest furniture brands. In addition, special shuttle bus services transported visitors from IFFS/AFS to IFC daily during the exhibition. Free taxi vouchers were also offered.

Come 2010, IFC-IFFS/AFS co-marketing initiatives will continue. For a start, trade buyers can register their details at www.ifcsingapore.com to receive:

• An exclusive welcome gift
• Complimentary two-night accommodation with breakfast
• Exclusive ‘VIP Buyer’ entry pass to IFFS/AFS 2010
• Business matching services with IFC tenants
• Complimentary entry ticket to the IFFS/AFS 2010 ‘Exhibitors and Buyers Night’ networking party
• Exclusive use of VIP Buyers’ Lounge at IFFS/AFS 2010

There are no specific centre-wide promotions planned for the March 9-12 period at the IFC. But SFIC says that as an export centre, IFC’s tenants offer competitive pricing all through the year. The individual tenants within IFC may offer special deals, but they would be dependent on the buyer’s order size and requirements, etc.

IFC houses a wide range of local and internationally acclaimed brands and companies offering a broad range of styles and prices with export-comparable pricing throughout the year. Its 29 tenants (local and international) offer buyers the convenience of a permanent showroom and contact point that can be crucial in business. Established in December 2007, the IFC has a gross floor area of 160,000 sq ft (14,864.5 sq m) over five storeys, with more than 100,000 sq ft dedicated to showrooms.

ASEAN Furniture Industries Council Explore Vietnam’s Potential

Singapore: In line with its aims of promoting intra-ASEAN furniture trade and strengthening ties within the ASEAN furniture industry, representatives from the ASEAN Furniture Industries Council (AFIC) visited Vietnam on July 20-21 to explore further partnership and growth opportunities.

Over the two-day visit, AFIC Chairman Jerry Tan of Singapore, together with AFIC Secretariat representative and Executive Director of the Singapore Furniture Industries Council (SFIC), Shermaine Ong, met with key officials from the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), a new Affiliate Member of AFIC, as well as officials from the Binh Duong Furniture Association (BIFA). Heading the meetings from HAWA was Nguyen Chien Thang and K K Khanh, Chairman and Vice-Chairman respectively, while BIFA was represented by its Chairman, Vo Truong Thanh, and Nguyen Van Huu, Vice Director of Binh Duong Industry and Trade Department.

Jerry Tan, Chairman of AFIC said: “We have all gained a better understanding of the various projects and initiatives by each organisation, the furniture markets in the respective countries and fruitful discussions on challenges faced by members in the light of the current global economic climate. In addition, we identified several important areas in which AFIC and our members in Singapore and Vietnam can further cooperate for mutual benefit.”

ASEAN-Vietnam Trade

According to statistics compiled by AFIC that were shared during the visit, total intra-ASEAN furniture trade (excluding Myanmar) in 2008 reached an all-time high with exports coming in at US$502.7 million and imports hitting US$516.3 million. Collectively, ASEAN exported US$11.85 billion of furniture, with Vietnam bagging top spot at US$2.8 billion.

To facilitate greater growth and exposure in the global market, AFIC shared with the Vietnamese furniture trade organisations the latest updates on the 27th ASEAN Furniture Show (AFS) which will take place in conjunction with the International Furniture Fair Singapore (IFFS) 2010 from March 9 to 12 next year. AFIC hopes to encourage greater participation from Vietnamese furniture companies at IFFS/AFS 2010.

AFIC, SFIC, HAWA and BIFA also expressed support for the continued promotion of intra-ASEAN furniture trade through a series of activities. Plans have been put in place for a trade and investment mission to Vietnam in October 2009, where representatives from the ASEAN countries will be invited to participate.

M’sia And Shenzhen Express Interests To Cooperate

Sungai Buloh, Malaysia: On a mission trip to promote China as a major consumer market to be reckoned with, the Shenzhen Furniture Trade Association (SZFA) paid visit to the Kuala Lumpur & Selangor Furniture Entrepreneur Association (KLSFEA) on July 24, 2009 in Sungai Buloh for a formal networking session. Led by SZFA President Huang Weiye and Secretary General Hou Kepeng, four furniture manufacturers from Shenzhen met with more than 20 KLSFEA members to exchange industry updates and foster business opportunities.

In his presentation in the formal meeting, Hou shared that China has progressively grown wealthier over the past 30 years. Not only do residents in the first tier cities have the spending power to buy better quality furniture, those in second and third tier cities, including rural China, form an equally lucrative market for both local and imported furniture.

“China is a production giant. But soon our macro improvements will turn us into a consumer giant. The government understands that by depending on export alone, the country will never become rich,” Hou said.

In order to encourage spending, the government has been giving out subsidies for purchases of electrical appliances and cars, he added. “Next, it will be furniture’s turn, to be sure. People can’t sit in empty houses.”

Hou advised Malaysian exporters to form strategic partnerships to enter China’s imported furniture market, especially in second and third tier cities.

To illustrate the potential of the Chinese consumer, Hou shared: “China has many successful brand names that sell only within China. QuanU, which targets only second and third tier cities, now has about 2,400 stores and covers 70-80 percent of these cities. Kuka also has a very strong domestic sales base worth RMB 2.5 billion through 1,600 stores. Markor’s total local sales is worth RMB 19.9 billion. Sleemon’s bedding sells for RMB 1.5 billion annually. In addition, there are 70 to 80 enterprises with sales of more than RMB 1 billion within China.”

Malaysia n Imports In China

“KLSFEA and SZFA can work together to target China’s domestic market. In China, Shenzhen’s products hold a higher brand value. SZFA is opening its third mega furniture mall in one of China’s 2nd or 3rd tier cities. Malaysian manufacturers are welcome to set up shops here,” Hou suggested.

He added: “Malaysian furniture, especially those made of solid wood, as well as higher-end sofas, command a better market than locally made ones in China. Malaysian exporters can ride on Chinese manufacturers’ sales networks in China. Imported furniture definitely has a market here. My first mission is to bring in two to three Malaysian exporters to these regions in China”.

SZFA President Huang, who is also Executive Director of Hing Lee Group, added: “Hing Lee owns a lot of retail stores in China but we don’t offer any solid wood furniture. I am looking to import solid wood dining and bedroom furniture”.

“In China, our problem is that most are not willing to risk taking the first step. Everyone wants to follow a success story. So we need to give them a role model, and quickly, by showing them Malaysian and Chinese manufacturers can cooperate and form partnerships.” Hou added.

In response to Hou’s call for cooperation, KLSFEA members expressed enthusiastic interests. Its advisor Ong Kian Sek agreed that this is an opportune time for both associations to work together and penetrate the Chinese market.

“We used to think that the Chinese cannot afford imported products and we have been so worried about their replicating skills since the 1990s. Now things have changed and improved. This is our chance because our language and culture are similar,” Ong said.

“Our biggest challenge has always been about how to find an entry point into China. Now that we have an avenue to exchange information on policies and share industry knowledge and retail statistics, we can consider targeting Chinese consumers as a group, rather than individually,” he said.

Said Hou in response: “Retail is not like export. One must be mentally prepared – the OEM model will not work. Manufacturers must upgrade to become OBM. Chinese are discerning and their tastes not second to the Americans or Europeans. We have to build a cooperative network. Associations can facilitate this. We should make an effort to exchange information so that more Chinese buyers will come to Malaysia to source for imports.”

Chinese Investment In Malaysia

Ong also proposed Malaysia as a strategic export base for Chinese manufacturers, in view of anti-dumping charges. Malaysia’s pro-FDI policies, political stability as well as comparable production and labour costs makes it a good alternative. He pointed out that Chinese investors could take advantage of the tropical country’s abundant natural resources as well.

“We have natural resources such as latex, rubber wood and other tropical woods, such as from palm trees. Malaysia is the second largest producer of palm trees in the world. The tree trunks were disposed in the past because industries had not developed ways to use them. But the government is now encouraging R&D on this,” Ong said.

And since raw materials are not allowed, and can cost much more, to be exported, it would be a good idea to set up facilities in Malaysia, according to Ong.

AFA Furniture To Grow By 20-30% This Year

Muar, Malaysia: Despite challenging macro-economic conditions, Muar-based youth furniture maker, AFA Furniture expects revenue to grow by 20-30 percent this year. It says that this is great climate for a company like AFA Furniture to thrive. “The economic crisis is good for us. Buyers are all looking for new, good value and trustworthy products. They are working harder to source for products like this,” said Ryan Theo, the company’s founder, chief designer and managing director.

Theo said in May 2009 that orders have already been filled up to September 2009. More demand is expected to come in from the US and Europe, which could improve by up to 30 percent.

“Malaysia lost a lot of orders to China in the past but many buyers are returning. There is still a very big potential for us here. We have got so many years of foundation. Customers can see for themselves that Malaysia is very strong in terms of price points and product innovation,” Theo said.

He added, “Given this economic situation, we are pushed to be more innovative in offering better prices. R&D is very important in design, and price as well a big factor”.

Business has been brisk because of AFA Furniture’s ability to offer products of international quality at attractive prices, Theo shared. “Our internal management and foundation allows us to achieve very attractive price points. Often we don’t get big margins.”

An effective and strategic management of raw materials accounts for the company’s competitiveness. AFA Furniture specialises in rubberwood youth furniture – mainly bunk beds (50 percent of total output) and single/twin beds for children below 18 years old. It purchases no more than 30 percent of its rubberwood stock from any single source. At any time, it has more than 10 active suppliers at hand. Its raw material warehouse stores up to 2,000 tonnes of rubberwood, although only about half is needed.

“So far, we have never encountered any shortage of raw materials, even during rainy seasons. Our ready stock facilitates on-time delivery and stable prices to buyers. Notwithstanding the drastic drop in the ringgit against the dollar in 2008, we were able to maintain prices,” Theo said.

One-stop Quality Control Much has been invested in quality control to secure better margins, Theo added. “We try to save on wastage. By paying attention to quality control, we save on returns. If there is a mistake, stock gets stuck in the warehouse and this is a waste of resources.”

Beyond this, the company goes further upstream to create a centralised quality control factory that encompasses not only a rubberwood warehouse, but also a brand new painting and coating facility, which began running in June 2009. As far as possible, it avoids depending on third parties. This is why it even imports its own bed slates from China.

For these purposes, a new 308,000 sq ft (28,614.13 sq m) factory was built up two years ago with US$3 million. Added machineries were self-funded for capacity to increase by 60 percent, so that it does not have to use any sub-contractors. In 2008, machineries were again updated and a woodworking facility was set up, all with US$2 million.

“With no loans, hence zero interest incurred, in these expansion projects, we won’t have to pass on any additional costs to customers,” Theo said.

New Product Lines

With expanded facilities, Theo and his design team have been hard at work to roll out updated models and new product lines, so that buyers have the option to mix several SKUs in a container. Most models require DIY assembly; many countries now prefer knocked-down sets that can help them save on ocean freight, inland, transport and warehousing costs, he said.

In 2007/8, AFA Furniture added more than 10 new collections to target the youth market, which Theo foresees would grow by up to 20-25 percent from then through 2012.

Today, it is already in the final stages of developing the toddler bed and baby crib ranges. The former has already passed Intertek tests for lead content and standard consumer safety specifications for the US, UK, Australia and New Zealand. Total lead content in substrate material and surface content is less than 10 ppm and the models contain no hazardous edges, small parts, etc.

In addition, a casegoods line for nightstands and wardrobes will be added to complete the youth bedroom set offering. New fivepiece bedroom collections will be launched by the end of this year, the company said.

Yew Hoong Sofa Products Launches NEW Brand Name

Semenyi, Malaysia: Two-decade-old Malaysian manufacturer Yew Hoong Sofa Products (M) Sdn Bhd has taken on the mission to rebrand and set a clearer vision for itself. In a reinvention exercise beginning late 2008, the company is taking greater steps to move from OEM to OBM. A new brand name, Hugo, was confirmed June this year and will be unveiled together with range of marketing materials with a coherent theme.

“It is time for an update of our company’s image. Hugo is a brand name that can be identified internationally. In a way, this also upgrades our image,” said the company’s spokesperson, Mike Hiew.

The ‘Hugo’ nametag will be sewn on to all of the company’s products, except for those produced for OEM. It is also a more suitable brand name to represent the company’s larger range of product offering – not only sofas, which the company begun with 20 years ago.

“Today, sofas take up about 40 percent of our total production. We are a lot stronger in the dining chair segment, which accounts for about 50 percent,” Hiew revealed.

Yew Hoong Sofa Products added its dining chair line about five or six years ago, added Hiew.

On transition towards OBM, the company already has a strong ODM profile in Japan. Working with a local partner, Yew Hoong’s products are sold in a chain of showrooms and retail stores across the country. There are plans to open more stores, not only in Japan but also its first in Malaysia. These retail fronts will now have full marketing support in terms of catalogues, flyers, CDROMs, leather samples and promotional materials bearing the Hugo brand name.

“I think this will help our retailers because consumers will feel more confident about what is being sold to them, when they see that everything is from Hugo and looks organised.”

“Our trade buyers will have more confidence in us too. After all, our slogan is ‘Just Right’ – not just a lifestyle product but reasonable and workable in the business sense too,” Hiew said.

New Product Line

The remaining 10 percent of its output comes from Lloyd Loom wicker furniture, a new division set up just this year. A collection will be ready for display next year at the Malaysian International Furniture Fair in Kuala Lumpur.

“We used to have irregular orders for this segment. Since demand of wicker furniture has grown very strong in Europe recently, we have decided to put more focus on it,” Hiew said.

In order to attract new customers and promote the official launch of the Lloyd Loom series, Hiew reiterated that it is time for a new brand name and collateral update.

“As we expanded our product range, we’ve neglected the need for a unified company branding since we have been so busy fulfilling orders. Even our company profile was backdated – the last was done eight or nine years ago, which is no longer suitable and does not represent our scale today.”

Responses to this product line has been encouraging, according to Hiew, who said he has been getting enquiries about it starting this year. “I think buyers are excited about what we can do using Lloyd loom wicker. It looks like rattan but requires much lesser time and manpower to achieve [the look].”

“In addition, we can pair Lloyd Loom wicker with leather or wood, or incorporate it into the range of dining chairs that we already have designs for. All we need is to manually upholster the frame with machine-weaved wicker, and we add value to our current models,” he added.

According to Hiew, there is much potential in France, Belgium, Germany and the Netherlands for Lloyd Loom furniture, given its innovative weaving methods to produce styles that are modern and of high quality.

Future Plans

Looking ahead, the company will focus on expanding its dining options to include full dining sets. Hiew said that he could have done so as early as three to four years ago. But before the economic crisis struck, there were simply too many manufacturers in Malaysia offering affordable dining sets, at various quality levels. “Now that the weaker ones are phased out, it will be a good time to strike and take in all these lost orders,” he added.

Approach to its first local retail store will be conservative. “We are not familiar with retail so we will go slow. And we don’t want to antagonise our existing distributors here either,” Hiew said.

He added that orders are still very full at the moment but the company does not intend to invest in any form of physical expansions. “We will update our product lines and perhaps also technical expertise in the meantime.”

Lounge Innovation Brings Australia Furniture Into Homes Worldwide

Western Australia, Australia: Australian upholstery manufacturer Lounge Innovation hopes to bring Australia right into residential homes with its new 'DownUnder'range of luxury, mixed media upholstery. A company press release said that the range encompasses sofas and chairs fitted with leathers produced from hides of the Australian emu, ostrich, kangaroo and crocodile. Using these unique materials, the collection evokes Australia’s vast landscape and beautiful scenery.

Antonio (Tony) Menna, Lounge Innovation’s Managing Director and leading designer, explains his inspiration as a way to “reflect the world famous natural feel of the Australian wilderness using environmentally sensitive construction.” He also affirms the quality of the collection, stating that they used the “very best upholstery construction materials, to deliver luxury and comfort for decades of enjoyment.”

Lounge Innovation places its focus on earthfriendly design and manufacture, typically choosing wood, the most renewable and greenhouse-friendly primary material, for their frames instead of steel. Most of the timbers and wood used in their products are grown on plantations, where the trees absorb carbon dioxide while growing and traps the gas inside for the entire lifetime of the wood. This therefore helps to reduce the amount of carbon dioxide in the atmosphere as well. The company’s strive for excellence in the materials that it uses has garnered many accolades from the Australia Industry Awards in areas like the use of leather, fabric, manufacturing and foam in furniture.

The 'DownUnder' collection was unveiled in the 2009 International Singapore Furniture Exhibition. Lounge Innovation, a leading specialist Australian manufacturer of upholstered furniture, was founded by Tony Menna in 1985.

Furniture Leadership Awards (FLA) Malaysia Returns

Kuala Lumpur, Malaysia: Malaysia's only dedicated award for the furniture industry, FLA (Furniture Leadership Awards) Malaysia, returns for its second edition after a debut lauded by Datuk Peter Chin Kah Fui, then Minister of Plantation Industries and Commodities, who was Guest-of-Honour at the 2008 awards ceremony.

The Malaysia Furniture Promotion Council, the official agency in the country for the promotion of furniture industry and trade, will continue to endorse FLA Malaysia 2009. Organisers APS Media Group say that this year’s event will take on a new and enlarged format this year to embrace greater participation.

New categories have been incorporated to highlight the important areas in the furniture trade, such as branding, service and product quality. There will also be categories to confer young entrepreneurs and woman leaders, with the Entrepreneur of the Year award being the highest accolade. (See pg 31 for full list of award categories.)

FLA Malaysia celebrates entrepreneurial and business excellence in the Asian furniture industry. Nominations and applications open in July 2009 before FLA Malaysia culminates in a grand award presentation ceremony cum gala dinner tentatively scheduled for December 4, 2009 in Kuala Lumpur.

As in the previous edition, FLA Malaysia 2009 as well as its eventual winners will be promoted both locally and internationally through various channels including: FFE magazine; FFE website; FLA website; international furniture trade media; nine international trade fairs and local newspapers.

Eurosa Opens Showroom In Orchard Central

Singapore: Eurosa Furniture Co Pte Ltd relocates its showroom to downtown Orchard Central, a brand new shopping mall along Orchard Road, Singapore’s retail hotspot. This outlet opens August 1 on the 7th floor.

The furniture manufacturer/exporter/retailer has one other retail store in IMM Jurong, set up in 1993. The Orchard Central store follows the closure of its predecessors in Paragon shopping centre, then Millenia Walk shopping centre.

“We used to have a shop in Paragon, thus we need to come back to Orchard Road to re-service our mid to high-end customers who frequent this area. We feel a new mall like Orchard Central will be good for us, since we are launching our premium collection at the same time. It will help us create a fresh image,” the company said in a statement.

The 2600 sq ft (241.55 sq m) showroom in Orchard Central, furnished according to elegant contemporary and elegant classic concepts houses residential furniture such as bedroom suites; complete dining sets; leather and upholstered sofas; club chairs; ottomans and occasional pieces; as well as lighting and accessories. At least eight new collections will be launched here quarterly.

“The collections showcased here are perfect for those who hope to furnish their homes to look like luxury hotels. Here, they can find pieces that are classy yet affordable,” the company said.

Eurosa Furniture plans to open more showrooms in Shanghai and Beijing. It is also looking for store-in-store opportunities in Kuala Lumpur, Brunei, Manila, Bangkok, Hong Kong and Taiwan.

Chinese Makers Spending More On Design, R&D To Stay Competitive

China: Global Sources, a Chinese business-to-business media company, published a report in June detailing the current outlook for the furniture industry. It predicts more conservative spending methods and cost-cutting strategies by companies in light of the current economic situation, and also a larger focus on R&D and design development.

The China National Furniture Association also supports this move, and is encouraging companies to become more design-driven rather than focusing mainly on manufacturing through a series of seminars. R&D spending has increased by two to more than give percent for midsize and large companies in 2009. Others have also hired foreign designers in order to stay relevant and keep up to global trends and create products more attractive to Western markets. This also marks a greater attention towards export markets.

Faced with rising domestic prices, many companies are also looking to alternative sources of raw materials like oak. Approximately 40 percent of the industry’s wood supply is imported, with a large amount from North America. Russia is also fast becoming an alternative source, and some companies are even considering moving their production there to make use of the cheaper local raw materials.

US and the EU remain the two top export markets in the coming years. But companies are also considering other destinations like Russia, the Middle East, South America and Southeast Asia to boost sales.

China Exports On A Decline While Imports Rise

Beijing, China: China’s foreign trade figures signal an optimistic outlook for the rest of 2009, according to Vice Minister of Commerce Fu Zhiying during a Beijing press conference on August 12. Numbers are expected to reach US$2 trillion for the whole year of 2009.

Fu reported monthly increase in exports despite the year-on-year decline, and revealed that figures exceeded US$100 billion in July, placing total foreign trade back at the US$200 billion level. China imports to its major trading partners like US, the EU and Japan also increased by more than three percent. Labour-intensive industries like the garment, furniture and shoe sectors had a decline rate of less than 10 percent, better than other categories, thanks to the tax rebate policy imposed by the government.

While numbers are optimistic, Fu also warned that difficulties remain, given that the global economy is still shrouded in recession and trade tariffs are in place against China’s products in many places. Chinese exports and imports amounted to US$2.5 trillion in 2007.

Domestic Spending In Rural China To Rise As Export Earnings Dip

Beijing, China: While the production value of furniture in China remains stable in the first half of 2009, exports have dipped by close to 12 percent, according to the China National Light Industry Council.

Production value improved marginally by 7.71 percent to RMB 152.97 billion. Exports dropped 11.76 percent to RMB 47.31 billion. Metal furniture posted the largest decline of 30.78 percent to US$1.46 billion, according to the China National Furniture Association. The biggest growth came from furniture made of bamboo, wicker and rattan – by nearly 53 percent to exceed US$ 16.98 million.

According to a news report on www.365f.com, the Zhejiang Furniture Association reported that some 229 furniture enterprises in the province are in the reds. These loss-making companies make up for about 28 percent of the total number of furniture players in Zhejiang. Operating income decreased by 4.1 percent on the whole to reach RMB 20.86 billion. Profits after tax were RMB 798 million, up 39.66 percent.

To make up for the loss in export earnings, Beijing is encourage farmers in the countryside to buy better furniture. Farmers in rural China have the right to enjoy high-quality furniture at low prices, Chen Baoguang, Vice President of the China National Furniture Association said in Beijing on June 3.

To achieve this, a marketing programme was launched early June to target more than 900 million farmers nationwide.

Currently, there are four furniture mega markets in China – Lecong, Xianghe, Likou and Chengdu. Designed to serve local consumers, these mega malls will work together, with support from the association, to roll out products suitable but the rural China.

"The rural furniture market will take time to nurture and develop," Chen said. "We are confident that the programme will be a win-win solution for both farmers and the industry."

Housing Slump Hits Wood Industry

Geneva, Switzerland: The United Nations Economic Commission for Europe (UNECE) revealed that wood and paper consumption fell by 8.5 percent in Europe, North America and the former republics of the Soviet Union, reported the Associated Press on August 4. This was mainly due to the sharp decline in US housing construction. Canada was especially hard-hit, with more than 90 percent of its lumber going to the US. The Commission also reported that real prices in building materials have fallen to the lowest level ever since the 1940s in response to a vertical drop in demand, but government-driven demand for renewable energy from wood is offsetting some of the losses.

The UN body covered 56 countries, whose land cover 42 percent of the world’s forests and supply 60 percent of global wood and paper products. There has been a 17 percent decrease in production in Europe and North America alone, with no potential improvement in the near future.

China and its role in driving wood and paper markets was also mentioned. Exports of finished furniture to other countries helped boost its trade sector to a surplus of $8.7 billion despite a fall in exports by 14.2 percent last year. Forest products output also rose by 23 percent in 2008. China exports most of the furniture it produces, with more than half going to the US.

The UNECE monitors economic progress for Europe, the US, Russia and Canada.

Furniture Retail Grows

London, United Kingdom: Furniture sales in July saw the best growth in 3 years, said the British Retail Consortium (BRC) to the Press Association on August 11. The wetter weather in July after June’s heat wave had turned consumers indoors, in turn stimulating sales of furniture and homeware. The housing market is also slowly improving, providing another set of impetus for consumers. On top of that, more people are making use of holidays to improve their homes instead of going away.

The furniture and floor coverings sector reported the best figures since May 2006, while home accessories and house textiles also saw higher sales. Across May to July 2009, like-for-like sales increased by 0.8 percent. But the BRC is going for cautious optimism, given that comparisons are being made against the very low sales in July last year.

Custom Furniture For Ethan Allen

Connecticut, US: Ethan Allen will be reinventing its services after 77 years, by offering custom order for its wood furniture production, reported the Connecticut Post on August 11. The company already has experience in custom-made products in the upholstery sector for the past few years.

It will be converting the manufacturing of the wood furniture to custom in “manageable increments” over the next 12 months, according to its president and CEO, Farooq Kathwari. The conversion will start with four popular dining room collections, and will “further enhance our ability to provide great products with unparalleled options at affordable prices,” said Kathwari.

Ethan Allen had reported a decline of 41 percent in sales for its third fiscal quarter ended March 31, compared to US$235 million last year. It also suffered a net loss of US$48.7 million in the quarter itself. Predictions for the next quarter are not optimistic as well, with the company expecting losses. The company has already cut 60 jobs in February at its Danbury headquarters, 190 jobs in Maine, Vermont and North Carolina, and also recently shut down stores in Southington and Groton. There are also plans to lay off 320 more workers and end operations in Andover, Maine, while expanding another upholstering plant in Maiden, North Carolina, in light of its conversion to custom orders.

Ethan Allen plans to also allow outside designers into their stores, which, together with its custom furniture, will help to boost sales. This is because they can offer consumers more choices along with the same quality as other companies that opt to continue mass production by shifting operations overseas. The company makes two-thirds of its furniture in the US, and has plans to add 14 stores to its 290 design centres in North America, Asia and the Middle East.

Leon’s Report Q2 Loss

Toronto, Canada: The second quarter results for Canadian furniture retailer Leon’s Furniture showed a decline of 25.8 percent compared to the same period in 2008, according to Furniture Today on August 12. Sales for the quarter ended June 30 had dropped to C$209.9 million (US$193.7 million) as the recession continues to take its toll on the economy. Net income was C$8.62 million for this quarter, compared to C$11.62 million last year. For the first half of 2009 ended June 30, sales fell by 3.8 percent to C$405.1 million.

Company chairman Mark Leon said that cost-saving measures will be implemented to help rectify the situation. He also noted that Leon’s had just completed renovations on its Laval, Quebec, store, and opened a new one in downtown Toronto, both of which likely added to larger spending in the period.

Leon’s Furniture is one of the largest retailers in Canada, and operates 64 corporate and franchised stores in every Canadian province except British Colombia.

Coricraft Goes To Angola

Cape Town, South Africa: Furniture manufacturer and retailer Coricraft will be extending its reach to Angola later this year, in a bid to establish a stronger presence in the African region, reported Business Day South Africa on August 12. The distribution agreement for Angola, which sets the terms for Coricraft to supply products to a local retail agent, has been signed and will take effect towards the end of the year.

Managing Director David Jacobson sees huge potential in Angola, and the company has employed a supply agreement which will gauge the market’s demand before further expansions. He also revealed that the future plan would be the opportunity to acquire equity in the local company at a later date. “From a Coricraft perspective, we have intentionally commenced on a no- risk basis, and while this does detract from the immediate profit-share opportunities, it does afford us the chance to assess the landscape and the potential pitfalls before assuming any risk.”

Ikea To Build More Facilities In Europe

Tromso, Norway: Scandinavian furniture retailer Ikea plans to build new warehouses in Northern Norway, the Barents Observer reported July 21. The city of Tromsø says it is negotiating several site locations with the company.

There have been requests and petitions to Ikea for it to set up a facility in the region. Another city, Narvik, is believed to be another competitor for this establishment. According to Tromsø Mayor Arild Hausberg, IKEA showed “great interest” in one of the site locations presented by the city authorities.

These two cities are the northernmost presence for Ikea. The current one in Haparanda on the border between Sweden and Finland already attracts a lot of customers from northern Norway.

In other news, Ikea has confirmed investments of EUR 50 million to build a timber processing plant in the Tyumen Oblast, the RusBusinessNews reports. The Swedish company registered its two subsidiaries, Arbor-Ishim and Arbor-Ishim-Les, in the Ishim district.

Apparently, Ikea has already signed a lease contract for 2.5 million sq m of forestry land. A 36 ha plot 4km away from Ishim has been allocated for the timber processing plant, which would create about 300 jobs.