by Wood and upholstery resources begin fielding calls from retailers and factories in a tight spot because of the sudden shutdown of one of the industry’s major suppliers
TUPELO, Miss. — With the sudden closing of upholstery and case goods resources United Furniture Inds. and subsidiary Lane Home Furnishings, many are now asking who fills an estimated $550 million void in the U.S. furniture marketplace.
It’s a void sure to be felt at a host of resources ranging from small independents to large customers such as Big Lots and Aaron’s, both of which carried the upholstery line and even some wood furniture items.
There’s also the question of who helps the manufacturers and suppliers that are said to be owed millions for products and services they have produced and provided. This includes producers in Malaysia and Vietnam, some of which reportedly haven’t been paid — to the tune of $85 million by some estimates — for 90 days or more.
Todd Evans, chief executive officer of Lane Home Furnishings, has not returned phone calls or text messages seeking comment, and efforts to reach United Furniture Inds. owner David Belford were unsuccessful this past week.
But several companies that have spoken with Home News Now since the closing — an abrupt, faceless and nameless communication via email and text that effectively put more than 2,700 workers out of a job without warning or continued health benefits — have chosen to step in and help fill the void in both product and payment to vendors including Asian factories.
This is important to retailers on two fronts. First it helps get product retailers have ordered en route as fast as possible.
While some of the product certainly hadn’t arrived in time for Black Friday sales, it possibly could get shipped before Asian factories close for Chinese New Year, which some have told Home News Now is starting in early to mid-December, more than a month before the Jan. 22 holiday.
Secondly, it gets the Asian factories — many of which could be teetering on the brink of financial collapse themselves — payment for at least some if not most of the product they have produced.
Several importers interviewed by Home News Now said they had received communications from customers asking them to help flow goods similar to Lane products they’ve ordered — including upholstery and case goods.
They also have heard from factories that haven’t been paid for goods they have produced, some of which are still waiting to be shipped.
In this case, an importer can pay the factory for those goods and then ship them to the retailer, which would then pay that importer for the order.
In other cases, they can have the factory produce similar goods for the retailer and have them shipped to those customers.
“Yes, we are getting requests from customers,” said Mike Wurster, president of case goods and upholstery resource Elements International, noting that there are some containers on the way with product the factories have shipped, although they were not in time for the Black Friday sales events. “They are desperate. … We have heard of customers that had items in Black Friday ads that they are now not going to get. And we have heard of people that have a ton of different things on their floor that they are going to have to replace.”
“We are just trying to do whatever we can do to be super helpful right away for our customers, but the factories, too, especially where we have shared factories,” Wurster added. “Because they are owed a lot of money and (the question is) how do we now help them facilitate getting orders to customers? … To the extent we can help and get involved here, we will and we are good at that.”
Wurster noted that this type of situation also impacts other materials and fabric suppliers, too, some of which also likely haven’t been paid for goods they’ve produced.
“It is just about trying to keep them moving the product and goods that they need to move to continue their businesses,” he said, noting that the company is poised to help not only with case goods, but also on the upholstery side of its business, be it stationary or motion.
“We have some inventory built now and we are just trying to help out where we can with customers that need it,” Wurster said.
J. Scott Ostrander, managing partner of case goods importer Austin Group, said that he also is hearing from retail customers looking to fill the voids on the product side, but also from factories, some of which he said United hasn’t paid in three months.
“As far as I am concerned, this is a terrible thing for the industry for sure,” he said. “We hate to see anything like this, but I have a great relationship with these factories and we are trying to help them out.”
“A lot of the product they (customers) were buying I have seen pictures of and have seen at the factories. … This is on-the-shelf product that the factory pitched to Lane, so it is not Lane-priority product,” he added, of goods the manufacturer has already produced for purchase that weren’t designed specifically for Lane or anyone else.
Jamie Collins, executive vice president at full-line resource Homelegance, said he also has heard from large and small factories alike in Vietnam and Malaysia that he described as panicked over the situation, including how they are going to get paid.
As it has relationships with some of the same factories that produced for Lane, he said he sees an opportunity to help these factories — and retail customers with product — although some of the exact solutions aren’t quite clear yet.
“Stepping in with Homelegance product is one option, but these customers already have product on their floors,” he said noting it could be a little early to make the calls about the business that will be up for grabs and what exactly retailers will want to replace.
Lee Boone, president of motion upholstery resource Luxfort Home, said he has not received any specific inquiries or requests to fill the voids left by United and Lane.
But he said that interest in his line in the past few weeks has been extremely high, particularly from major retailers traveling to Asia to source product for the same categories produced by United.
“Which tells me they have voids to fill and part of them were United,” Boone said, adding, “I think this caught the industry by surprise. There have been some signs or signals these past few months that told retailers not to grow their business with United, but I don’t think anybody thought there would be a liquidation.”
Another big question is who fills the void now at Big Lots, which sells upholstery not only by Lane, but also by Broyhill. Sources have told Home News Now the Broyhill line also was previously made by United and sold at some 1,300 Big Lots locations around the country.
Big Lots officials did not respond to an email request from Home News Now about the sudden closing and the impact they see on its business.
Some in the industry have pointed to Ashley Furniture as a logical resource to help on both the retail and supply side of the business. However, efforts to reach CEO Todd Wanek before the holiday weekend were unsuccessful so it was unclear what capacity — or willingness — Ashley might have at present to address the voids in the marketplace.
Not all retailers are in a big bind with the closing. Some told Home News Now they only sold a few sets in upholstery and case goods.
That includes Salt Lake City-based RC Willey Furniture and Tamarac, Florida-based City Furniture.
Jeff Child, president of RC Willey, said his stores were getting some product on both the upholstery and wood side, including one or two bedrooms and one motion group.
“We didn’t have a lot. … We bought stuff from them and we hate to see what is going on, but it shouldn’t impact us too badly.”
But like others, he is disappointed about this turn of events.
“We hate to see good companies go out of business,” Child said. “It is just too bad for them, for their customers and for their employees.”
Keith Koenig, chairman of City Furniture, said that his stores also did not carry a lot of the brands on its floors.
“We had had two or three groups of casual dining and were looking at some other stuff because we are big fans of Todd Evans and he is good on the import case goods business,” Koenig said.
Of the sudden closing, he added, “It’s just a shame. There are ups and downs in the furniture industry and the ups are hard to handle, but the downs are impossible. I feel for them. But I feel mostly for the people that work in the factories.”
