SARS leads to caution
Digital images, conference calls take up slack in travel
By Joan Gunin -- Furniture Today, April 28, 2003
High Point — Furniture manufacturers and retailers are finding new ways to do business in the face of the SARS virus in Asia.
The Severe Acute Respiratory Syndrome threat, which originated in southern China — home to many furniture factories — has forced semi-frazzled executives to rely more heavily on digital imaging, conference calls and airfreight deliveries in lieu of visits overseas.
Most companies have curtailed employee travel, including routine factory visits by retailers to plants in Asia operated by Collezione Europa, Lifestyle, Natuzzi, DeCoro and others.
Many Taiwanese workers in China are staying there to avoid possibly contaminating families at home. Some U.S. expatriates based in Asia bristle at any suggestion they should leave their adopted homelands, for fear of surrendering their U.S. tax-exempt status.
Some have compared SARS to the early stages of AIDS, when little was known about the syndrome's origins or how it is spread.
"It is not business as normal," said Sam Contreras, product manager for Asian importer Coaster, who is scheduled to return to China in early May. "We are being cautious in terms of travel. We are waiting to see if more information will come out in terms of prevention, so we can be more prepared."
Contreras has already had discussions in-house about how to proceed if he can't travel.
"Thank God for e-mail, because we are shooting pictures back and forth in terms of styling," he said. "But you still need to touch and feel the product — especially upholstery, you need to see how it sits."
Full-line manufacturer Kathy Ireland Home by Standard has shipped masks and issued guidelines about minimizing exposure to its 130 workers in southern China, near Guangdong.
"We are putting more responsibilities on our partnered relationships overseas," said Don Mecke, vice president of sales and marketing for Standard's Kathy Ireland program.
"Some things formerly done by people in the U.S. are being done in China. We have rearranged some things here."
If the situation continues, Standard may take steps such as air-shipping samples from Asia to its West Coast facility and reviewing them there, rather than at the overseas factories.
Standard has postponed travel overseas, although a planned June trip to China — involving management, retailers, designers and product developers — remains "ongoing and active," Mecke said. "June is a big month because of the High Point furniture cycle."
At retail, Clarence Smith, Havertys' president and chief executive officer, said he hasn't noticed any disruption in product flow tied to SARS.
"Certainly we're watching it very closely — and don't plan to go to China," Smith said. However, he added, travel cutbacks now might cause problems later. "With some of the manufacturers not able to send their quality control people over, we may see some issues this summer."
Mickey Holliman, chairman, president and CEO of manufacturer Furniture Brands International, said FBI still has Asia covered.
"Our guys are not traveling (to China), but we have 106 foot soldiers representing Furniture Brands in every plant where our product is being made," he said. "The infrastructure is taking care of the quality considerations that are critical."
Steve Barr, president of Asia-based leather producer HTL International, said he plans to return to Asia in mid-May to check on prototypes. But as a precaution, he'll avoid Hong Kong and travel directly from Tokyo to Singapore.
At Natuzzi, which produces its promotional Italsofa line in Shanghai, business has continued uninterrupted.
"Everything is on track," said Fred Starr, president of Natuzzi Americas. "There has been no loss of production."
Various department store and chain buying groups are delaying planned trips to China, Starr said, but Natuzzi is fortunate because its product development unit is based in Italy. Meanwhile, Natuzzi's Asian workers are taking such precautions as donning masks, while many office employees are working at home, he said.
Technology also has helped Collezione Europa, which has a 25-member staff in Taiwan.
"It's an inconvenience but we are managing," said Leonard Frankel, president and CEO of the New Jersey-based firm. "We are highly systematized with computers, Web cams and digital photography. The possibility of travel being restricted due to war or terrorist activity has been factored into our business plan."
Luca Ricci, president of leather upholstery producer DeCoro, whose entire production is in southern China, is scheduled to open a new 2-million-square-foot facility in Shenzhen on May 1.
"The only delay is related to the grand-opening celebration because I don't think we will have customers willing to come to China in this period," said Ricci, who returns to China from Italy this week.
Manufacturer Century also is waiting it out. All executive trips are on hold "until there is more clarity," said Bob Maricich, president and CEO.
"Some of our people are already there, domiciled in southern China doing quality control," Maricich said. "We are counting on them now."
Analyst Jerry Epperson of Mann, Armistead & Epperson in Richmond, Va., said he believes SARS kept attendance down at the April High Point market "and may have an even bigger impact on the fall market."
| Acknowledgements | ||
| News Editor Jay McIntosh and Case Goods Editor Powell Slaughter contributed to this story. | ||
