Furniture Industry at Odds as it Awaits Anti-Dumpi
New York, October 28--Furniture retailers and manufacturers are pitted against each other in a battle that could reshape the industry, just days before the Department of Commerce decides on anti-dumping duties for Chinese wooden bedroom furniture.
Low-cost imports from China wreak havoc on furniture manufacturers, confronted with higher material costs and too much competition to raise prices. But furniture retailers have seen boom times due to more demand and soaring sales unseen in years.
Now, with the U.S. Department of Commerce set to decide on the anti-dumping issue on November 8, the manufacturers want higher duties, and retailers want the preliminary ones in place reversed.
For the past year, the two groups have waged a publicity battle and appealed to the government, reaching a new boiling point at the High Point International Home Furnishings market earlier this month in North Carolina.
"There is a growing concern that the duty will be raised here in November, and will have an impact on the way (furniture companies) do business," said Michael Cox, a senior research analyst with Piper Jaffrey after returning from the High Point market.
The disagreement began a year ago when a group of nearly 30 manufacturers including Stanley Furniture Co., Bassett Furniture Industries Inc. and subsidiaries of La-Z-Boy Inc., filed a petition with the federal government charging Chinese manufacturers with dumping bedroom furniture in the U.S. at uncompetitive prices. They requested tariffs of up to 400 percent.
This summer, the Commerce Department issued preliminary duties against all Chinese manufacturers ranging from 4.9 percent to 198 percent, but some in the industry are saying the duties may go even higher.
Furniture Retailers of America, a group of mostly big-box retailers like Rooms to Go, Haverty Furniture Cos. and Bombay Co., have vehemently opposed the petition.
"These duties represent just a new tax on bedroom furniture," said Michael Veitenheimer, a vice president of Bombay Co. He said that the U.S. furniture manufacturing industry is floundering because it was unprepared for globalization.
Manufacturing companies say they have seen Chinese imports climb more than 200 percent since 2000, and feel tariffs are a necessary step in regaining lost market share to prevent further losses of manufacturing plants and jobs.
"If the imports continue to come in from China unchecked, U.S. production of bedroom furniture is going to cease," said Joseph Dorn, an attorney representing the manufacturing group.
Already forced to pay preliminary duties, some small importers and retailers, like Leslie Thompson of Up Country Home and Garden, have had to cut jobs. Since the duties were imposed this summer, Thompson says she has been forced to pay over $1,000 for a bed that once cost less than $400.
"We believed so much in the future of China, that we opened a small factory in June, and now we've been hit with this," she said. "We had increased (our American staff) before this, because of China. But now I'm having to cut it."
In fact, analysts remain skeptical that the anti-dumping duties will do anything to bring manufacturing jobs back to the United States.
"They say they are doing this to save jobs, but no one is going to do that," Veitenheimer said. "They are just moving product from China to other countries, so why are you closing off China?"
