Local furniture companies with connections to China and Asia are gearing up for the potential impact of the coronavirus. The new respiratory virus that started in China two months ago has temporarily closed factories there and restricted travel to the region.
For Craftmaster Furniture in Alexander County, which is owned by China-based Samson Holdings, the virus threatens their upholstery supply, President and CEO Roy Calcagne said.
“Our concern is what’s going to happen if the virus spreads and if it impacts the textile mills,” he said.
The company imports much of its fabric and leather supply from mills in China, which have been shut down for several weeks for the Chinese New Year holiday. The holiday was extended because of the coronavirus. Craftmaster built six to eight weeks of stock in preparation for the holiday. But that stock might not be enough, Calcagne said.
Chinese suppliers have warehouses in the U.S., as well. But if the operation of the mills is delayed, that could cause a ripple effect months away, Calcagne said. In that case, Craftmaster may lean on local suppliers.
“We do buy from local suppliers, as well,” he said. “But it’s hard to make a move to … replace the fabrics from China. It would be very disruptive.”
Some mills are scheduled to reopen Feb. 17, Calcagne said. If they do open, some employees who went home for the holiday may be stuck in cities that are still on lockdown, leaving the factories understaffed and under-producing, said Alex Shuford III, CEO of Century Furniture in Hickory.
Century also receives fabric from factories in China. Shuford worries about the long-term effect of the virus itself, as well as the reaction to the virus, which could include lengthy quarantines. If factories aren’t producing enough material now, that will show in several months when supplies run low, he said.
Century was already planning to buy some material from India. That option is looking more attractive, Shuford said.
He also worries about shipping products, as some ports are denying entry to ships coming from China, he said. Century had one shipment delayed, possibly because of the virus, and Shuford worries there’s more to come.
“All of the supply chain is disrupted,” he said.
Small stoppages and disruptions will snowball into bigger problems, Shuford said. He sees little threat to the world in terms of the actual virus and more from its effect on the economy.
“We talk about a contagion -- it can be the virus itself or it can also be the effect that spreads through the economy,” he said.
Most of Century’s business is exports rather than imports, Shuford said.
The company sells a lot of product to Chinese customers. That business was already waning because of the trade war between the U.S. and China. Now that customers aren’t buying as much with quarantines and travel bans in place, Century could lose more business, Shuford said.
“The business was significantly hurt by the trade war and to top it off it is really that downturn in consumption (from the virus),” he said.
Shuford heard from several Chinese buyers who will not attend the High Point Furniture Market this year for fear they won’t be able to travel into the U.S. or travel back home, Shuford said. “They’re not going to be here and that’s what’s scary,” he said.
Century abandoned several planned trips to Asia, Shuford said. It wasn’t fear of the virus. It was fear of employees being stuck there due to flight cancellations. “The virus doesn’t scare us at all,” he said.
Craftmaster also canceled trips to Asia, Calcagne said. Many companies with ties to China have, as well, he said. “We’re all in the same boat,” he said.
All companies can do is wait and see what the effect of the coronavirus will be, Shuford said. He hopes overreaction doesn’t lead to serious economic damage.
“That would be silly of the world to let that happen,” he said. “But we’ve been silly before.”