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          Ethan Allen Turns The Tables In China
          2018-10-17          130          互聯網     

          Furniture from China has gobbled an increasing share of the U.S. market in recent years, leading to the closure of hundreds of American factories. Now, turning the tables on their Asian rivals, two big U.S. producers are trying to sell more furniture in China.
          The companies, Ethan Allen Interiors Inc. and Ashley Furniture Industries Inc., are pursuing different approaches. Most furniture Ethan Allen sells in China is made in its seven plants in the U.S. and Mexico. Ashley relies on furniture made at its own plant near Shanghai and elsewhere in Asia, though it ships small amounts from its eight plants in the U.S.
          Chinese, said Steve Lush, president of Robb & Stucky International Inc., a Florida retailer of high-end home furnishings owned by Samuel Kuo, a furniture entrepreneur from Taiwan.
          Robb & Stucky International Inc.
          Robb & Stucky, which doesn't sell Ethan Allen or Ashley furniture, also aims to expand in China within the next few years with stores that would sell mostly U.S.-made products to the affluent, Mr. Lush said.
          Ethan Allen furniture already is available in 77 stores in China operated by the U.S. company's local retailing partner, Markhor Furnishings Co. Ethan Allen's chief executive, Farooq Kathwari, said in an interview that he expects the number of Markhor stores carrying Ethan Allen products to reach at least 100 within a year.
          On a recent shopping excursion to a Markhor store in Beijing, David Huang, a film director, said Ethan Allen chairs and tables didn't strike him as exceptional. 'But I expect many Chinese people will like this brand because it looks expensive and is made in the U.S.,' he said.
          These efforts are too small to reverse the general flow of furniture trade dominated by powerhouses China, Indonesia and Vietnam. Imports accounted for 63% of the $34.5 billion U.S. wholesale furniture market in 2011, up from 41% in 2002, according to Mann, Armistead & Epperson Ltd., an investment-banking firm in Richmond, Va., as Asian producers undercut their U.S. rivals on costs. In the first 10 months of 2012, the U.S. imported about $29.7 billion of furniture and bedding, while exporting $4.8 billion.      

          Still, the efforts to expand in China and elsewhere overseas show the battered U.S. furniture industry isn't completely surrendering to Asian dominance.
          Closely held Ashley Furniture, based in Arcadia, Wis., has been buying furniture from China for about 30 years and importing much to the U.S. for sale under its brand in Ashley and other furniture stores.
          But Ashley also has big ambitions in the Chinese market. A 35,000-square-foot Ashley furniture store, its first in China, opened in Shanghai last May. The company aims to open 15 more in China in 2013. The stores will be owned by local entrepreneurs under license from Ashley.
          We have decided to really focus on China stores,' said Todd Wanek, chief executive of Ashley, which has stores in Vietnam, Japan, Jordan, Mexico and Central America. Ashley furniture is much lower priced than that of Ethan Allen. Sofas made by Ashley typically retail for $300 to $1,500, while Ethan Allen's are mostly in a range of about $1,500 to $3,000.
          At Ethan Allen, based in Danbury, Conn., foreign sales, mostly in China, accounted for 6.6% of $729 million in sales for the fiscal year ended June 30, up slightly from 6.3% the prior year. But Mr. Kathwari is putting a higher priority on international sales. Sales abroad can help offset downturns in the U.S., such as the 2008-09 recession, he said, and give the company more long-term growth potential.
          Along with its focus on China, Ethan Allen recently opened a store in Brussels, in that city's chic Place du Grand Sablon. From there, Ethan Allen aims to expand into Germany and France. It also plans stores in Saudi Arabia and India. Longer term, 'South America is an opportunity,' Mr. Kathwari said.
          The courtly Mr. Kathwari, who is 68 years old and owns about 14% of Ethan Allen's stock, got into furniture and China by chance. A native of Kashmir, he moved to the U.S. to study business at New York University in the mid-1960s. His grandfather sent him a dozen wicker baskets of Kashmiri arts and crafts to sell in the U.S. Among the buyers: Ethan Allen.
          Mr. Kathwari became a regular supplier to the furniture company and made his first visit to China in 1975 to attend a trade fair, scouring for new sources of home decor. He later joined Ethan Allen as an executive and focused mainly on the U.S. market.
          In 2000, Richard Feng, chairman of China-based Markhor, then primarily a furniture maker, approached Mr. Kathwari to seek advice on retailing. Ethan Allen agreed to sell its furniture at Markhor stores in China, starting in 2002.
          About half of the Ethan Allen furniture sold at those China stores comes from U.S. plants, with the remaining from Mexico, Honduras and other countries.
          Shipping furniture from North America to China seems counterintuitive, given the distance and China's vast and efficient network of furniture factories and parts suppliers. But Mr. Kathwari said Chinese furniture plants typically aren't set up for customized upholstery choices that Ethan Allen emphasizes. For now, he said, Ethan Allen can handle that custom business from North American plants.
          Almost all Ethan Allen furniture sold in the U.S. is made to order on a custom basis. 'If you were trying to make it as a commodity (in the U.S.), it would be hard to compete' with imports, he said.
          Another consideration: Ocean shipments from the U.S. to China are about two-thirds of the cost of shipping goods in the other direction.
          Ethan Allen, with plants in North Carolina and Vermont, relies more heavily on U.S. production than most American furniture companies. Mr. Kathwari said he may eventually open a plant in Asia.

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