weekly feature | Jan 5, 2022 |
Why more home brands are banking on domestic manufacturing

A few years ago, the idea of a company moving its manufacturing operations to North America to save money would have been unthinkable. But as we enter the third year of the pandemic, it’s happening. Across the home category, brands as diverse as Amazon staple mDesign to direct-to-consumer furniture brand Whom Home and luxury to-the-trade company Atelier Purcell are all doubling down on North American manufacturing in a bid to circumvent the global supply chain crisis.

“The time that shipping containers are sitting at American ports is insane, and once the goods make it off the ship, the cost of freight is through the roof,” says Alexander Purcell, the founder of Atelier Purcell, which has traditionally split its production between the U.S., Vietnam and Europe. “We did an overhaul and looked at where we could produce specific frames and finishes in the U.S. at a six-week lead time.” Previously, Atelier Purcell had shipped much of its often customized merchandise directly from overseas manufacturers, while a few simpler pieces like dining chairs had components flat-packed and sent to the U.S. for assembly before shipping to the customer. Now, more of the brand’s bespoke upholstery will be done in the Bay Area, and many of its case goods will be produced in Minnesota.

The decision stemmed in part from a realization that many designers currently care more about reasonable lead times than they do about customization, leading Atelier Purcell to increase the number of in-stock pieces it produces. “As we have more in stock, designers are happy to take it at the moment,” says Purcell. “We had planned on starting a quick-ship program anyways. Over the course of the last year, we saw this opportunity to adjust the infrastructure and begin to start building the stock and building it closer to where the bulk of our end users are, which cuts down on delivery time.”

Spurred on by the pandemic home boom, Jonathan Bass, the CEO of direct-to-consumer furniture brand Whom Home and Innova Luxury Group (which handles white-label production for 1stdibs, Nordstrom and West Elm, among others), doubled the size of his company’s factory in Mexico last year, bringing its floor space to 400,000 square feet. Bass says that Mexico, where Innova and sister brand PTM Images have been manufactured since 2010, has long been out of favor in the furniture industry, existing in a limbo between cheaper production in Asia and the more luxury “Made in America” status. But he sees that tide turning as companies are realizing the benefits of producing closer to the end consumer (Innova’s factories sit just a few miles from the Arizona border) while also mitigating the growing labor shortage in the U.S.

“The U.S. furniture industry continues to be pummeled by a lack of skilled workers combined with rising wages,” says Bass. “It’s very competitive to keep a steady workforce domestically, and I see that leading more companies to Mexico.”

Getting operations set up in Mexico, however, can take several years. That’s an investment of time and money that not all brands are in a position to make, leading many to plunge ahead in the U.S. despite increased cost and the potential scarcity of workers. Luxury kitchen and bath fabricator Italkraft and trade furniture brand Sherrill have both opted to expand their American manufacturing. The former opened its first U.S.-based manufacturing facility in Miami in December, and the latter spent $2.96 million to convert a 140,000-square-foot former warehouse into a new facility for custom upholstery production.

Sherrill’s endeavor is set to create some 90 new jobs, though Dax Allen, the vice president of marketing, admits that the labor shortage is a real challenge for the North Carolina–based company. “Being at the higher end, you do need a more skilled workforce,” he says. Sherrill has taken to offering signing bonuses to attract new talent, and the competitive job market has led the company to highlight benefits like health insurance and paid time off, which it has always offered but never previously felt the need to market. The brand is also partnering with the Catawba Valley Furniture Academy in Hickory, North Carolina, offering scholarships to help build up the region’s talent pool. “There’s a good living that can be made in the furniture industry,” says Allen. “We’re trying to attract people and help them understand that this is a solid career where you can have a nice lifestyle.”

The American labor shortage hasn’t stopped e-commerce home goods brand mDesign from its reshoring efforts either. While CEO Stacey Renfro acknowledges that some of the company’s partner plants have had to reconfigure shifts to make up for a dwindling workforce, she says this hasn’t impeded production—and certainly didn’t keep the company from moving an additional 10 percent of its plastic manufacturing from China to Ohio in 2021. MDesign previously worked with three U.S.-based plastic factories to produce its assortment of affordable storage, decor and furniture, but its manufacturing partnerships more than tripled in 2021. Renfro says the company plans to move other material production, such as wire, to the U.S. in 2022. “Until last year, it would never have been cost-effective to move operations like these out of China,” she says. “I do think it’s a larger trend across every industry—not just reshoring in the U.S., but getting out of China generally. I know other companies are looking seriously at Mexico. It’s not just about the cost anymore. The goal now is to get production closer to distribution and meet the surging demand. Every company wants that capability.”

Homepage photo: A CNC machine in a furniture factory | ©Romaset/AdobeStock

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