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Merchandiser examines both sides on the question of tariffs

27 July 2021
Misc

BRIGHTON, Ontario – In the Summer 2021 edition of the Merchandiser, HGO’s quarterly electronic magazine, we look at both sides surrounding the question of the tariffs on imports of motion furniture and leather stationary furniture brought into Canada by producers in the People’s Republic of China and the Socialist Republic of Vietnam. This not as cut-and-dry an issue as one would immediately think.

On the one hand, Canadian upholstery manufacturers of all sorts – not just those making motion and leather stationary – have been losing market share for well over a decade now. Granted, most of the two dozen or so that immediately come to mind to most seasoned industry veterans are doing relatively well and have carved out niches and audiences capable of driving their growth at least in the immediate future.

But as an industry sector they have been losing ground over the past decade.

On the other hand, those opposed to the tariffs aren’t totally in the wrong either. Their collective observations about the negative impact the tariffs will have on pricing to the consumer and their own bottom line isn’t refutable neither is their observation about limited capacity of many Canadian manufacturers to meet their needs.

To cap things off, we update a recent report on upholstery shipments and the apparent market for the product category in Canada. For the first time, HGO offers some reasonably well-educated estimates as to the retail value of upholstery using figures from 2018.

At first glance, the industry seems to be stable but industry professionals from manufacturers and distributors to retailers need to be aware of the underlying currents. This is our attempt to shine some light on them.

On a lighter note, our contributing editor, Ashley Newport, profiles dex10, a unique retail concept designed to meet the challenges posted by the pandemic while meeting the needs of the 21st century shopper. Located in the heart of Calgary’s The CORE Shopping Centre, it allows the customer to walk into the store and purchase a piece of furniture – that they can see and touch – without having to consult with a salesperson. It’s an attempt at blending the best of in-store and online retailing.

We hope you find the issue informative and inspiring. Click here to download.

Tariffs: the reasons why

27 July 2021
Furniture, Manufacturing

Last December, five Canadian upholstery manufacturers jointly applied to the Canadian Border Services Agency (CBSA) seeking tariff protection for a select group of leather-wrapped goods exported by certain companies located in the People’s Republic of China (PRC) and the Socialist Republic of Vietnam. They alleged their governments illegally subsidized the cost of key components, giving them an unfair advantage in the marketplace.

The members of this consortium include two members of Palliser Furniture Holdings, a 75-year-old family operated company based in Winnipeg, Manitoba and perhaps this country’s largest furniture resource. They are its namesake Palliser upholstery division and EQ3, a contemporary furniture specialist with its own retail network. The others are family-owned and operated furniture makers based in the Greater Montreal Area – Elran, Jaymar and Fornirama.

Although not one of the original complainants, the Toronto-based Brentwood Classics, a family owned and operated specialist in upper mid-range to high-end fabric upholstery, has indicated to the CBSA it supports the imposition of the tariff regime.

A member of the company’s production team is seen here assembling a leather chair at Jaymar’s production facility just outside of Montreal. In early May, after a five-month investigation the CBSA imposed antidumping tariffs on motion furniture – such as recliners – and leather stationary upholstery imported into Canada from both the PRC and Vietnam. The duties demanded ranged from a low of 17% to a high of 296%. No other furniture category – for example, fabric stationary upholstery or bedroom furniture – is subject to the tariff. (A complete list of the tariff rates and the companies subjected to them can be found on the CBSA’s web site.)

Peter Tielmann, chief executive officer of the Palliser Furniture Holdings, notes while the CBSA imposed the duties in early May of this year, the effort to bring these issues to light has been ongoing for some time. “The process started four years ago,” he said in a recent interview, adding like almost everything else it was impacted by the ongoing global pandemic. “We did not choose this timing. The current disruption caused by COVID is a short-term issue and we will need to work through it together.”

For those advocating the tariffs, the goal is to focus attention on many of the illegal, but long tolerated, trade practices of both the People’s Republic of China and its client state, the Social Republic of Vietnam. And, in so doing, at least partially level the competitive playing field for the dwindling number of Canadian leather upholstery and motion furniture manufacturers disadvantaged by those same practices, which are contrary to the rules set down by the World Trade Organisation (WTO).

It should be noted the PRC was admitted to the WTO almost 20 years ago and is subject to its regulations and practices.

“Unfair trade practices are being used by foreign counties as tools to dominate domestic industries,” Tielmann maintains. “Once that goal is reached prices will go up. The low prices are only bait and a short-term gain for some, at best. These actions are necessary to allow the Canadian furniture manufacturing industry to survive and ultimately to save jobs and knowledge in Canada.”

The complainants are adamant the goal isn’t to force these imported goods off the retail floor, but merely to level the competitive playing field. They maintain both the PRC and Vietnam – but especially the PRC – operate a structure of subsidies and government-controlled production that result in an artificial and unfair export price, accusations they believe are well-documented in the international press.

The Quebec Furniture Manufacturers Association (QFMA) – the only such trade group still operating in North America – has come out in support of the anti-dumping action and the reasons behind it.

“The idea here is not to squelch competition but that competition has to be fair,” QFMA president and chief executive officer Gilles Pelletier told Home Goods Online. “Furniture dumping can result in consumers acquiring products that may not be safe, up to code or built by workers who are not of age and not paid a decent wage. Plus, after all, dumping is illegal – this is true for furniture but for other goods produced overseas and imported into Canada.”

The five complaining manufacturers stress their objective is to establish a level playing field unfettered by artificial foreign government intervention.

To read our complete report, click here to download the Summer 2021 edition of the HGO Merchandiser.

 

HPM opens fall registration

27 July 2021
Events, Furniture

HIGH POINT, North Carolina – Registration for the Fall 2021 edition of the High Point Market (HPM) is now open for retail buyers, exhibitors, industry, press, and other industry professionals.

This also marks a return to the typical market schedule after a pandemic-related adjustment pushed the spring event later by several weeks.

The fall event is scheduled to run from October 16 to 20 and interested industry members can register online at www.highpointmarket.org/register.

Fall Market not only marks a return to the typical High Point schedule after an adjusted spring cycle pushed Market later by several weeks, but also welcomes the return of a robust event schedule, numerous tours, and full-scale programs.

The High Point Market Authority (HPMA) also announced the return of what they described as a robust event schedule with various buildings, exhibitors, and industry associations all actively planning events, tours and programs for the fall event. The online event calendar will make its debut at www.highpointmarket.org/events  in mid-August, with more events being added as details are finalized.

220 Elm is one of the 180 or so buildings that make up the twice-yearly High Point Market. It is home to Canadian furniture resource Palliser as well as several other manufacturers located across this country.Prior to the pandemic, an average of 80 or so Canadian furniture and home furnishings resources exhibited at both the spring and fall High Point Markets. Among them are upholstery producers Palliser, Elran, Décor-Rest and Brentwood Classics as well as case goods specialists such as Canadel, West Bros and Durham.

HPMA is encouraging attendees to plan ahead, register early and contact Travel Quest to lock in overnight accommodations, after which attendees can then shift their focus to scheduling showroom appointments and adding events to his or her personalized MyMarket schedule.

Canadian retailers and other industry professionals should also consult with Global Affairs and  their local health unit before making plans to travel to North Carolina to ensure there will be no difficulties in returning home.

“The excitement surrounding fall market is palpable amongst all facets of the industry,” HPMA president and chief executive officer Tom Conley said in a statement. “The industry is eager to connect face to face, engage their suppliers directly, and be inspired as they’re used to doing here in High Point. The feeling is mutual, I can assure you, and we are enthusiastically counting the days until October!”

New this market, persons registering onsite will be charged a $30 onsite processing fee, with the exception of exhibitors and media. Those planning to attend are encouraged to register online to avoid paying this fee. Pass reprints onsite for those already registered will not be charged.

Any qualified attendee registering prior to October 1 (September 17 for international attendees) will have their pass mailed to them in advance. Those registering online after this deadline will be able to pick up their pass onsite but will not be charged a processing fee. For registration assistance, HPMA can be reached at (336) 869-1000 during normal business hours or by emailing [email protected].

Friesema to retire, Schaefer named CEO of Sleep Country Canada

26 July 2021
Mattresses, People, Retail

TORONTO – Sleep Country Canada Holdings (SCC), parent to this country’s largest mattress retailers, has announced Dave Friesema, who has served as chief executive office since it returned to the public equity market in 2015 will retire at the end of this year and will be succeeded by Steward Schaefer, the current president of the retailer’s brick-and-mortar banners.

Schaefer will retain his role as president of Sleep Country and Dormez-vous and will join the SCC’s board of directors on January 1, 2022.

Dave Friesema Friesema’s retirement will be effective at the end of the company’s current fiscal year, which ends on December 31, 2021. He was named CEO when SCC once again became a public company in 2015, succeeding now board chairman Christine Magee. For the previous decade, he had served as chief operating officer having first joined the company in 1996.

In the statement announcing his appointment, the company noted Schaefer has been a key member of their executive leadership team since 2006, having been named president of SCC’s two brick-and-mortar banners this past April. SCC’s other major retail channel is Endy, reputedly this country’s largest direct-to-consumer mattress specialist.

“His vision and determination to see Sleep Country’s family of brands through to their full growth potential has been a driving force behind the company’s success over the past 15 years,” the company said, saluting his 27-years of experience in the sleep and retail industries as unparalleled – having grown Dormez-vous into a household name in Quebec prior to its acquisition by Sleep Country in 2006.

“This appointment reflects and is a natural extension of the invaluable contributions and vision that Stewart has provided for nearly two decades, while also showcasing the depth of our talented leadership team,” Magee said. “Stewart is uniquely qualified to take our business into the next chapter of our growth story, and we look forward to continued success under his capable, passionate and strategic leadership.”

Stewart Schaefer “Over the 15 years since Stewart joined Sleep Country, he has been pivotal in taking our combined entities to even greater heights.  His creative and visionary leadership have been key to our success and he has been instrumental in transforming our company, and has been the key architect leading the vision for our growth strategy, the launch and growth of our e-commerce business, the driving force behind our acquisition of Endy as well as a plethora of new partnerships that have both introduced iconic brands and created new revenue streams in our business,” Friesema observed, adding, “His entrepreneurial focus has been the critical element to our ongoing success and shaping our culture.”

“I would like to express my sincere gratitude and appreciation for Dave’s contributions and efforts over the past 26 years and recognize the remarkable transformation and innovation that Sleep Country has accomplished during his tenure as CEO. Sleep Country’s extraordinary performance and market leading practices have benefitted from Dave’s keen business acumen and leadership,” Magee continued. “His legacy goes far beyond the bottom line. Dave has helped build a business that meaningfully transforms the lives of those it serves while also fostering a culture of inclusion and purpose that will continue to define Sleep Country in perpetuity.”

The company said Schaefer and Friesema will work closely over the next six months to ensure an orderly and seamless transition, while continuing to focus on the long-term growth of the company.

SCC is expected to release its fiscal results for the first half of fiscal 2021 after the Toronto Stock Exchange closed on August 3, 2021. Currently, the retailer operates 287 brick-and-mortar stores as well as 17 fulfillment centres across Canada. 

Related Story: Company veteran Schaefer named president of Sleep Country

Related Story: SCC signs Bianca Andreescu as first brand ambassador

Related Story: SCC sets super hub opening, expands warehousing 65%

The HGO Merchandiser
Summer 2021
Summer 2021
Spring 2021
Spring 2021
Winter 2020
Winter 2020
Summer 2020
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Home Goods Online.ca and its accompanying newsletter - HGO This Week - covers the furniture, bedding, appliances, consumer electronics, accessories, lamps and lighting and floor coverings product sectors of the big ticket home goods market in Canada. HGO is also a forum for the dissemination of market research and hard-hitting articles on best practices for Canadian retailers.

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