by The purchases also adds skilled workers to its ranks without having to find or train new recruits
WOODBRIDGE, Ontario — Like many other domestic upholstery resources Canada-based Decor-Rest has seen high demand for its line during the pandemic, which in turn has increased backlogs and lead times to historic levels.
Currently backlogs are at 4-6 months, compared to a more typical pre-pandemic level of 4-6 weeks, company President and CEO JR Marzilli told Home News Now. Of course, the company has welcomed the huge demand over the past two years, but it still wants to get its backlog under control.
“Four to six weeks is where we have always have been delivering, and we aim to get there as soon as possible,” he said.
Enter one of the largest deals in Decor-Rest’s 50-year history, its recent purchase of Superstyle Furniture and Trend-Line Furniture, two competing upholstery producers that sell into the Canadian market.
“I would say that the biggest benefit and what really got our attention to look at this acquisition was that they have both been a competitor of ours for a number of years,” Marzilli said. “Superstyle has been in business 55 years and Trend-Line has been in business 37 years…We are celebrating our 50th year as well. So we have been quite the rivals over the decades, and the product offerings are very similar, which is why we are such fierce competitors. And because we are fierce in that department, their labor skill set is so similar to ours. We both build very similar products and while we offer some different fabrics, the quality and workmanship and family cultures are very similar, which is why it is so hard for retailers to decide which one they want to buy from.”
And with domestic facilities of their own in the same region of Ontario, the purchase adds much needed capacity for product with a similar design and construction story and price point that Decor-Rest is already offering to customers in the U.S.
Decor-Rest currently had about 220,000 square feet of production in Woodbridge, and the acquisition adds roughly 170,000 square feet, Marzilli said, noting that this will grow overall capacity by about 35%. It also adds about 100 workers for a total of 450 between all three companies.
Obtaining additional skilled labor was a key factor in the decision to acquire the brands.
“We need to grow and we need to add more capacity and right now our most difficult challenge is finding skilled labor,” Marzilli said, noting that by acquiring the two brands, it also now has the additional skilled labor it needs to help boost is capacity. “That was the main reason we looked at it.”
Due to demand in the marketplace, he said that these manufacturers that are now part of the Décor-Rest family of companies also have a backlog that needs to be addressed.
“So we are going to look at their backlog as well and see how to fulfill it and use our skills set and their skilled employees to help grow all the companies together under one umbrella and use it as leverage,” he said, of the need to satisfy its retail customers.
For those customers, the timing perhaps couldn’t be better as many retailers have been leaning toward domestically produced goods for some time due to the high transportation costs shipping product from Asia.
In addition, the purchase of these brands lets customers tap into lines that Marzilli said have not been available in the U.S. market.
“Retailers will have a lot more domestically produced product available to them and that’s where the demand has been lately,” he said. “With the surcharges in freight on overseas product and with the shortage of supply…there has just been a larger surge in demand for domestically produced product. You can’t get it with the supply chain shortages, and it is more expensive if you do get it.”
Marzilli said that the Decor-Rest line offers sofas retailing around $1,099. The other brands, now part of the Décor-Rest family of brands, offers similar pricing within their respective lines, he said, noting that the current 10-member independent sales force will now sell the Trend-Line and Superstyle brands in addition to the Decor-Rest line.
“We will have a lot more product offerings because both Trend-Line and Superstyle have not been available in the U.S. to date,” Marzilli said. “This will bring that to fruition because Decor-Rest is heavily placed in the U.S., and now we can bring our customers to more brands because of that.”
