Category Close-Up December 2018

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How companies that make all or part of their offerings in the U.S. are faring in today’s uncertain business climate

Avanti Embellished Towels

York white embellished towels feature traditional ironwork scroll embroidery in a silver gray tone, providing an elegant update for the powder room. Made in India, the towels are embroidered in the U.S.

Capel Flat Weave

The Worthington is a casual rug design with a flat woven construction. Made-to-order and reversible for twice the wear, the design pays subtle homage to fashion with an intricately detailed bouclé texture. Made with 34 percent wool, 33 percent nylon and 33 percent polyester, Worthington is offered in 24- by 36- inch, and 3- by 5-, 5- by 8-, 7- by 9- and 8- by 11-foot sizes with a 24-inch by 8-foot runner.

Mohawk Scott Living Rug

Made with 100 percent EverStrand PET recycled plastic, the Elan Lagoon design is from the Expressions Collection by Scott Living.

Bedford Cottage Throw

Woven in its New Hampshire mill, the Sunapee throw features the company’s widest stripe in twilled bands with colors evoking nature, from rugged coastlines to green mountain meadows and autumnal forests. Machine washable and measuring 45 by 70 inches, the blend of acrylic and polyester includes a four-sided short fringe.

Orion Traversing Collections

Orion’s Traversing Collections are available in iron, wood and lightweight embossed metal designs in more than 100 finishes and 200 finial styles. The Iron Fascia for motorized and manual traversing tracks received the Window Covering Manufacturers Association (WCMA) 2017 Drapery Hardware Best Technical Innovation Award. The system allows draperies to open and close easier than with traditional rod-and-ring combinations, reducing wear and tear. They can be used manually with cords or batons, or combined with Somfy motorization. Heavy-duty single or double track systems are available in white, black, antique bronze and gold up to 30 feet in length. Front tracks are available with or without rings. Round iron and
Italian fascia designs can be bent or curved for special applications, such as bay windows.


Whether a company creates products in the U.S. or not, the biggest game-changing issue among suppliers today is the proposed tariffs against imports from China. Jeff Kaufman, president/coo, Avanti Linens, sees the tariffs as a definite business threat.
“Even though we embroider and sew in the U.S., the raw materials are coming from overseas. We’ve been affected on a number of products on the first three lists, with the threat of those on list three going from 10 percent to 25 percent in January,” says Kaufman. “It’s very hard to plan a business when you don’t know what your costs are going to be. Resourcing isn’t an option for a number of products, so moving them to another country isn’t an answer.”
For Orion Ornamental Iron, Inc., Sunil Patel, ceo, states, “We have been adversely impacted as imports on steel and aluminum, a major input for us, have increased substantially in cost… products in our category will become expensive in the future months.”
For some businesses that generate a larger percentage of their product lines or materials in the U.S., the tariffs seem to be less of a challenge and may even offer an advantage. “We had just started growing the business in China,” says Cameron Capel, president, sales, marketing for Capel Rugs, “but it hasn’t done too much to really negatively affect Capel. We think it will actually help our made in U.S. items.”
Richard Sherman, president, Bedford Cottage, adds, “As a domestic manufacturer, we certainly are taking advantage of promoting our made in U.S. brand, Kennebunk Home, as a high-quality alternative.”
At Mohawk Home, Bart Hill, senior vice-president of operations, explains that 85 to 90 percent of the company’s products are U.S. made. “Because that percentage is so high, for us, [the tariffs are] a short-term disruption,” says Hill. “We are positioned to source from other parts of the world.”

Changes In American Mindset

If prices on products increase in the future, will American consumers still make an effort to support U.S.-made goods? Suppliers vary in their perceptions.
Kaufman notes that there aren’t many products completely made in this country. “Given the option of buying a made in U.S. product versus an import, I think the consumer would choose made in U.S. But she (and we) generally don’t have that option,” he explains. “So I’d say at a conceptual level, made in U.S. is the preference.”
Patel confirms that “American-made” still is an important factor in the minds of consumers. “We benefit from this as our products are made in U.S.,” he says.
Capel sees more interest recently from consumers in U.S.-made products as well as “appreciation from a quality point of view and understanding of the higher prices.”
Sherman also accentuates the positive. “While our retail partners have always been surprised by our pricing and how competitive we are with imported products, in the last few years, we have seen an increased interest in domestically produced goods that are of equal or better quality than what is available for import,” he says.

Concerns Beyond Tariffs

Although the uncertainty surrounding tariff issues tops the list of greatest business concerns for many suppliers, there are other issues bubbling up to the surface. For Kaufman, it’s the weakening of traditional brick-and-mortar retail channels.
Sherman adds, “While the increase in online shopping has helped us, it has not completely replaced the business we used to do with the smaller, independent retailers [that are no longer in business]—and we loved working with them.”
Capel cites continuing increases in freight costs as disquieting, along with the effort needed to balance growing e-commerce business with the maintenance of brick-and-mortar
retail relationships.
According to Hill, the biggest disruptor in the area rug sector involves the shift to online e-commerce, which has changed inventory demands. A higher number of skus with smaller runs are replacing higher quantities of mass-produced products in fewer skus. Rising costs of raw materials from inflation, cheap products imported from countries such as Turkey and retailers’ unwillingness to increase product retail prices are also making doing profitable business more difficult. “There seems to be a press toward value and opening price points,” says Hill. “That’s not good for the long term.”

Moving Forward

In spite of all these challenges, suppliers continue to plan for future successes. “We’re continuing to push our capacity in our online fulfillment business and aligning our design, product development and operations to maximize that piece of the business,” says Kaufman.
Sherman plans to enter new product categories. “We are very excited to be launching a collection of decorative pillows, manufactured in New Hampshire that will coordinate with our existing line of throws,” he says.
At Orion, the focus in 2019 will be on offering new products at optimum price points and with increased customization, and creating the best customer experience.
Mohawk is continuing to pursue innovations in core fiber development and rug constructions as well as growing and refining distribution and marketing efforts. The company recently launched Scott Living, a home décor line created in collaboration with Drew and Jonathan Scott, stars of HGTV’s “Property Brothers.” LDB

Resources
• Avanti Linens, 800-360-0836, avantilinens.com
• Bedford Cottage, 800-242-1537, bedfordcottage.com
• Capel Inc., 800-334-3711, capelrugs.com
• Mohawk Home, 800-843-4473, mohawkind.com
• Orion Ornamental Iron, Inc., 877-476-6278, ironartbyorion.com