High Point — The same day Vaughan-Bassett chief John Bassett was talking about duty to country and urging industry suppliers to help pay for antidumping efforts against Chinese bedroom furniture, retailer Jake Jabs offered his own take on the move.
"It's a bunch of old North Carolina has-beens crying over spilt milk. It's a backwards, antiquated, dark-ages type of mentality that would even think of this," said Jabs, president and owner of Englewood, Colo.-based American Furniture Warehouse, a Top 100 company and a big direct importer.
Jabs' criticism of the work of the American Furniture Manufacturers Committee for Legal Trade was the harshest offered by a sampling of leading U.S. retailers. The committee plans to file this fall a petition with the federal government charging that Chinese furniture plants are illegally selling wood bedroom furniture below cost in the United States, and seeking countervailing duties.
Retailers were mixed in their opinions of the effort, although most expressed support for fair, legal trade and some were disheartened by the job losses at closed U.S. furniture factories. A couple of retailers at the high end saw possible benefits from the action — at least in the short term — because it could raise prices and work against the deflation they say has plagued the industry.
Some selling at middle and promotional prices are bothered by the possibility of higher prices, saying that would be bad for consumers if not for business.
David Thompson, president of American Signature/Value City Furniture of Columbus, Ohio, suggested nothing would be gained by possible government intervention but a lot could be lost, including choices for consumers and U.S. jobs in freight, retailing and other sectors tied to Chinese imports.
American Signature said in a written statement that, "because of the threatening gestures of a few members of the domestic industry," the Top 100 chain is "reviewing its supply arrangements to ensure (it's) not indirectly supporting companies whose ultimate aim is to harm American Signature/VCF's business through these actions."
Thompson wouldn't say what suppliers could be affected.
The retailer said that, through its 80 Value City and 14 American Signature stores, it accounts for about 10% of U.S. sales of wood bedroom furniture imported from China, but also is a major buyer of domestic bedroom furniture.
Thompson said his company does business with about five bedroom factories in China. The company said protectionist trade actions could hurt consumers by increasing costs and limiting choices, and hurt other U.S. industries that export furniture components to China.
Many companies supporting the petition "are themselves major importers of wooden bedroom furniture and parts ... from China and elsewhere," Thompson said.
One country or another
Jabs said American buys a lot of bedroom furniture from China, but also from Indonesia, the Philippines, Brazil and other countries. If duties are placed on China — and Jabs believes there's no chance of that happening — more of his business would likely go to these other countries.
He's certain Chinese factories are making money. "They're making so much money, every time we go over there, they have a new 500,000-, 1 million-, 2 million-square-foot factory going up," Jabs said. "Where does that money come from? It comes from the profits on the goods."
Keith Koenig, president of Tamarac, Fla.-based City Furniture, another Top 100 chain that imports directly from China, said the argument isn't that cut and dried.
"I'm sure the Chinese are making money in their furniture factories," he said. "But since China is not a market economy, my understanding is whether they are selling below or above their costs doesn't matter. It matters whether they are selling below the comparable cost for similar goods in other surrogate economies like India, Malaysia or the Philippines, and they very well may be. I'm not sure."
Sympathy and free trade
Koenig sympathizes with U.S. companies facing stiff Chinese competition, and with factory workers losing their jobs.
"Like all Americans, I want to see laws properly upheld," he said. "But generally speaking, I firmly believe in free trade and that our economy is the strongest in the world because we allow free trade and don't put up barriers except in certain circumstances."
Retailers saw advantages and disadvantages in the possibility of antidumping action, depending on their niche.
Joe Reddingtion, chief executive officer of the upscale Lancaster, Pa.-based Breuners Home Furnishings Corp., said antidumping duties likely would raise prices, "which wouldn't necessarily be a bad thing for retailers," particularly at the high end, who may be selling more units but not bringing in more dollars because of price deflation brought on by cheaper imports.
"It gets back to what the consumer would buy and the market would support," he said. "It depends on the magnitude of (price) increases. Huge increases would hurt. Modest increases that would be passed on to the consumer ... would probably be a positive," at least in the short term, he said.
Still, Reddington added, "it seems awfully late in the game" for domestic manufacturers to push the issue. "I just think it's highly unlikely that the shift is going to be slowed down," he said.
Amor Forwood, president of high-end, Austin-based Louis Shanks of Texas, said he's for the antidumping effort because it "might temporarily do some good" by raising prices on imports and helping domestic producers who are making an honest effort to compete.
But "over the long haul ... I think China's (low labor cost) is going to end up taking most of the world production of everything," Forwood said.
Jeff Seaman, president of the nation's largest furniture chain, Rooms To Go, said he doesn't see any plus for consumers in raising prices and limiting choices.
Rooms To Go buys from all over the world, he said, "but the fact is you have some incredibly large, well-run, high-quality manufacturing plants supplying bedrooms (in China). If that were limited, it would create less choice and drive up prices."
Jim Gabbert, CEO of Minneapolis-based Gabberts, said, "The movement of manufacturing offshore should not be a surprise to the furniture manufacturer. They have seen other industries, one after another, move offshore, so I don't have a lot of sympathy for them."
Upscale Gabberts doesn't buy directly in China, but has integrated Chinese and other imports into its lineup through traditional domestic manufacturers who import, as well as through overseas manufacturers who show in High Point.
"The dynamics of trade and labor costs and all that stuff is really kind of moot to us," Gabbert said. "High Point lays out a buffet and we take what's appetizing."
Limiting imports
In Bellwood, Pa., Wolf Furniture appears to be one of the few key retailers that have limited their reliance on imports while ringing up tremendous growth — a 44.2% sales increase last year. "We're trying as much as we can to stay American," said Gene Stoltz, vice president of merchandising.
Wolf's stores are in heavily unionized areas, and both its salespeople and customers are asking for U.S.-made goods. Does Wolf applaud the antidumping effort?
"I guess we would be for it, if they are actually dumping," Stoltz said. "We're definitely in favor of anything to keep those jobs in the States."
