Upholstery manufacturers outline strategies for 2025

Tariffs are top of mind for furniture executives as the year ends, as well as freight costs, supply chain disruptions and an unpredictable consumer.

Consequently, industry leaders are revising and expanding their business strategies for 2025 in response and crafting company-centric solutions for the roadblocks that might evolve in the coming months.

Tariffs‘ impact

Although the exact ramifications remain to be seen regarding tariffs, domestic and international manufacturers are developing multilayered strategies to address the potential disruption. For many, the continued diversification of manufacturing facilities is a key focus.

“Manwah has developed a diversified sourcing strategy that minimizes reliance on single geographic locations,” said Gabriele Natale, president. “By establishing manufacturing facilities in multiple regions, we can adapt to tariff changes and relocate production as necessary. This flexibility allows us to mitigate risks associated with international trade tensions.”

Like many in the industry, Natale said that he is concerned about the disruptions tariffs might create, adding that the impact is dependent on how the tariffs are imposed: whether on all imports or specific countries.

He added that Manwah leadership feels that the company is “very well-positioned” with manufacturing facilities around the globe, including a 1.3 million-square-foot expansion in Vietnam that is scheduled for completion by May 2025.

Violino also is expanding its operations to include a manufacturing facility in Vietnam. According to Carlos Bosch, company president, the new facility will be more than 300,000 square feet and will employ between 500 and 1,000 workers. He said the expansion allows Violino to plan for market disruptions while also complementing current production capacity

“We have experienced a lot of different headwinds in the past 10 years I’ve been president at Violino, and we have managed to deliver great product at a great value to our customers through it all,” said Bosch. “We’ve been aware of the tariff conversation and actually feel like it is more likely that other countries will incur a tariff before China gets an increase; we want to be ready, nonetheless, for the long haul for our customers.”

He said that Violino will begin making specific product in a Vietnam factory secured by the company that will “dovetail what we are already doing in China,” noting that the new location near Ho Chi Minh provides a safety net if business conditions become “unsustainable” in China.

Ready with options

Lifestyle Enterprise CEO Michael Hsieh said that the company already has multiple factories throughout Asia, “which will always give us options.”

“The majority of our product line has transitioned out of China and for products that have not been moved, we will have contingency plans,” Hsieh said. “However, the talk around tariffs or possible tariffs is unknown at this time, so we will be ready with plans when needed but will not react before it is necessary.

“We feel that, if nothing else, the past four years have taught us how to respond quickly to issues outside of our control,” continued Hsieh. “However, moving forward we are optimistic about 2025 and beyond. Every economic indicator leads to a stronger economy with housing being a major focus for all economic levels. Lower interest rates will drive the home market with new homes, resale, and home improvement. We think all these factors will drive the home furnishings industry to long overdue recovery.”

Aria Designs has already strategically diversified the company’s manufacturing capacity across Vietnam and Mexico, according to company CEO Jeff Arditti. The expansion provides Aria with the flexibility to mitigate potential impact of tariffs, and he said the strengthening of the U.S. dollar should help offset any tariff-related costs.

“Additionally, to minimize any potential tariff impact, we are positioned to serve as an importer of record, which assists to either further reduce or eliminate the cost burden on our customers,” Arditti said. “This approach not only ensures cost-effectiveness, but also enhances our ability to respond quickly to market.”

Hickory, N.C.-based RHF Companies, parent company of Century Furniture, Hancock & Moore, Hickory Chair, Highland House, Jessica Charles, Cabot Wrenn, Pearson and Maitland Smith, is well-prepared to address any potential impact from tariffs, according to Alex Shuford III, CEO.

“We are concerned (about tariffs) but only moderately,” said Shuford. “The currently discussed levels for countries other than China could be managed. If a reduction in importing also lowers demand for container freight and freight rates fall, that could offset a significant amount of the burden.

“Chinese-based materials will be a much bigger problem, and supply chains will certainly shift if large tariffs are implemented there.”

Shuford said RHF is continuing to invest in its domestic wood-working facilities in response to anticipated demand and will be sensitive to country of origin regarding materials selection over the next development cycle. He noted that a tariff war could stimulate the domestic upholstery category at higher price points, and improvements in the housing market could favorably impact business as well.

“We are absolutely bullish on 2025 and 2026 and believe that the U.S. economy will continue to outperform,” Shuford said. “The Fed should continue to lower rates in the coming year, and that will eventually translate into lower mortgage rates and more mobility. As the housing market thaws, we see a near term growth cycle developing.”

Ports, freight costs, warehousing

Industry executives also are developing strategies to offset freight and port challenges. For many, the solution includes expanded warehousing capacity in the U.S.

Eichholtz, described by some industry members as an alternative to RH, is increasing its warehouse space in response to a variety of potential challenges.

“The strike at the ports already showed how much impact this can have on many industries,” said Dennis Hendriks, vice president of operations. “With the expected strike in January 2025, we can expect more disruptions for the industry in Q1 of 2025.

“That said, our unique selling point as a company is that we always have 80% of our SKUs in stock in our North Carolina warehouse. We even expanded our warehouse footprint to 180,000 square feet to support our future growth.

“We can only speculate on this and prepare ourselves in the best way possible to anticipate another strike, freight cost increases and tariffs,” Hendriks said, adding, “Our warehouse is packed and prepared to kick off hard in Q1 of 2025.”

In October, Barcalounger announced that the company is opening a warehouse and distribution center in Reno, Nev. The new distribution center will serve Arizona, California, Idaho, Nevada, New Mexico, North and South Dakota, Oregon, Utah, Washington and Wyoming.

“There are a couple of dynamics in play with the new warehouse,” said Larry Smith, president and CEO. “First, the Reno/Sparks area of Nevada is better centrally located to serve the Pacific Northwest, Nevada and Southern California. Additionally, the components and cost of doing business is different in Nevada compared with southern California, more in alignment with our partners in North Carolina.”

A diversified supply chain and “proactive strategic shifts in manufacturing operations” are part of the solution strategy at Olivia & Quinn, said Jared Worrall, president.

“Our key strategy has been agility, both in sourcing and product development,” Worrall said. “By working closely with a network of manufacturers across multiple countries, we can adjust quickly to economic shifts.

“Being 90%+ in stock and shipping quickly from our Hickory, N.C., warehouse ensures that we can meet demand promptly,” he continued. “Our strong in-stock levels, combined with a streamlined shipping process, mean we can quickly replenish retailers and respond to evolving consumer needs. While some challenges such as freight costs and supply chain disruptions may persist, our healthy logistics infrastructure ensures minimal impact on our delivery timelines.”

Alex Reeves, president at Craftmaster Furniture, views disruption to the supply chain as one of the most concerning aspects of tariff talk and freight rate increases. In response, he said, “We can only focus on what we can control,” adding that the Craftmaster team is committed to “executing tasks under our care with best practices.”

“Our industry has been in one challenge or another since I can remember,” Reeves said. “I think it’s important to be nimble, proactive and hyper focused on controllables in a world of continuous change.”

See also:

• Industry responds: Impact of new tariffs would be significant and costly
• Case goods players say big question marks remain heading into 2025