FEBRUARY 11, 2022
FROM: THAYER COGGIN
To Our Valued Customers:
During the last 18 months, the U.S. economy has seen levels of inflation not experienced since the 1970s. Every category of our raw materials, including hardwood lumber, metal, foam and packaging has increased 70 to 100 percent. Transportation costs have risen to the highest levels in our history, led by container costs that are up 4 to 500 percent, and with oil prices increasing from $30 to $90 a barrel, all related petrol chemicals have escalated by 100 percent or more. Additional costs in labor, insurance, and energy are having a compounding effect on our operational costs.
We were hoping to see this unprecedented inflation rate begin to abate; however, it continues to escalate unfortunately. Consequently, Thayer Coggin finds itself once again having to face the reality of making the very difficult decision of implementing a price increase of 10 percent, effective March 7, 2022.
This decision is necessary for us to maintain the prudent, financial health of our company and to preserve the integrity of our premium brand of classic modern furniture. While some companies have implemented a value-engineering strategy to mitigate price increases, Thayer Coggin will not compromise our quality for which our highly respected reputation has been earned over the past 69 years of our company’s history.
Please know that we are, as always, most appreciative of your business but most importantly of the personal relationships we are so honored to have with you. We will continue to do everything possible to earn your trust. We certainly all look forward to a future where business will return to normal.
Thank you for your continued support and understanding.
AUGUST 23, 2021
One of the best detailed descriptions of what is happening in the Industry today and why. (REPRINT)
I am confident that this question is something that many of your customers and their clients are asking daily and I am
hoping that this is not something that is keeping you up at night.
I have been immersed in our industry since 1984 and have had the pleasure of working in many various aspects of our business
which has given me a well-rounded perspective.
What is currently going on in the home business reminds me of my Econ 101 class in 1982 at UC Santa Barbara.
We have a big disconnect between Supply and Demand.
Amidst so much economic hardship for so many industries, as we all know, Covid-19 has provided a tailwind to the home industry.
1. As people were cancelling events and travel, spending so much more time at home, energy, money, and time were all
being spent on improving their homes and in many cases buying new ones.
2. Americans bought a lot more goods when Covid-19 prevented them from buying services.
The reality of our situation is that with unprecedented demand, supply has just not been able to keep pace The owner
of a Top 100 Retail chain was recently quoted:
"We sell thousand of pieces of furniture every year, " he said, adding that orders are typically delivered in a
two to ten-week time frame. Now 75% of our orders are taking six to eight months. "It's kind of nutty right now.
Every single day we're hearing more bad news."
I would like to provide a high-level recap of "Why" we ( the home furnishings industry) are in this conundrum and
experiencing so many delays:
1. Covid-19 outbreaks domestically, health and safety protocols such as physical (social) distancing has reduced the
number of people in factories (both stateside as well as overseas) resulting in tremendous labor shortages.
2. There have been many factory and port closures as well as complete shutdowns in China, India, Indonesia, and
Viet Nam (the four biggest furniture producing countries).
As overseas orders are finished, there are problems with getting the product to the ports and when the merchandise
does ship and then arrives in the US, there is significant congestion and even more delays:
1. Too many containers on container ships that are stacked up way off the coast
2. Not enough (foreign) labor on the ships
3. Due to Covid-19 health and safety protocols, these workers are not being allowed to disembark,
therefore less people want these jobs.
4. Not enough (domestic) labor to unload ships
Once these containers get cleared and are in the ports, there becomes a new set of issues to deal with:
1. A significant shortage of truck chassis (what the trailers/containers hook onto)
2. A significant shortage of truckers to haul the product.
The reality is that many of the truck drivers have collected more on unemployment than what their wages are and
just don't want to go back to work.
When the containers get delivered to the US based Vendors (over99% of the vendors that most of you are getting
product from are based in the US),
In many cases , we have been back to square one with closures, Covid-19 outbreaks, labor shortages, and health and
safety protocols such as physical (social) distancing reducing the number of people to get orders shipped.
In too many cases, getting product out of factories can take weeks as opposed to just a few days. Goods are being sent
to staging areas and can take up to several weeks for trucking companies to pick them up.
Pre Covid-19, cross country shipping used to take about seven days and now because of consolidation at several warehouse
along a trucking route, coupled with shortages of containers, truck chassis and drivers, we have seen shipments from
North Carolina take as long as eight weeks to get to CA.
Even domestic (made in the USA) Vendors usually rely on parts/components from overseas in their manufacturing
processes as it truly is a global supply chain.
For many of you who recently ordered upholstery, we are dealing with everything that I have mentioned and
adding a global foam shortage. I have detailed some of the overseas issues which is where so much of thee foam that is
used in sofas, chairs, mattresses, etc. comes from.
The domestic foam supply chain is still catchi8ng up from February, when Winter Storm Uri hit the Southwest;
this took several of the main plants that make the chemical ingredients for foam offline.
This was at a time when demand was peaking and production needed go up, but unfortunately, went down instead.
We are now seeing many of the top upholstery vendors playing cat up and quoting lead times of 24 weeks.
Not only is all the above factoring into what we are all dealing with daily, but prices are going up as well.
As demand has steadily gone up and supply has been choked (globally) , back to Econ 101, prices everywhere have increased
and are continuing to.
Just some factors:
More expense in raw materials
Less available labor resulting in increased wages
Less available containers forcing higher costs
Less available labor to off load containers
A shortage of available chassis (trucks) drivers, and factory workers.
I have often said that patience is a virtue, and something that I am always working on. However, there are just so many
factors out of our control, and we are all caught in this together. "It is what is is" comes to mind, and hopefully, once
educated, your customers and clients will understand. We are in the perfect storm and like everything,
this too shall pass. For anyone that has recently tried to buy a new car or new appliance, those industries are experience
even more delays than ours.
If this has shed even a little light on the "Why" question, than I have succeeded in my intention and I thank you for your time.
AUGUST 18, 2021
DESIGN DAILY, BOH
Natuzzi Americas has transformed its High Point showroom into a multi-tenant exhibition space for curated Italian home furnishings, which is set to debut with a grand opening ahead of this year’s Fall Market in October. Rebranded as Casa Italia, the space will feature Natuzzi Italia and Natuzzi Editions on the first floor, along with eight new exhibitors housed in the remaining spaces, including the Calia Italia, Calligaris, Connubia, Ditre Italia, Gamma Arredamenti, Luceplan, Nicoletti Home and Tomasella brands.
August 16, 2021
From Thayer Coggin
To Our Valued Customers:
First of all, many thanks for your strong support of Thayer Coggin during these changing and challenging times. We are incredibly grateful for your most valued partnership.
The residential furniture industry continues to experience extraordinarily strong demand for our products. Forecasts predict this demand to continue throughout 2022 fueled by historically high monetary liquidity combined with very low interest rates. While sales are at an all-time high, the disruptions to the supply flow and shortages of various raw materials has continued to drive a level of hyperinflation never experienced for many of these commodities.
On a weekly basis we continue to receive raw material price increases that are relentless and non-negotiable. Hardwood lumber and plywood costs as well as foam costs are now more than 100% greater than a year ago. Metal costs have increased 60% and the most egregious of all has been the exorbitant container costs that have increased 300-400% from pre-COVID levels. Most other raw materials have increased 30-40%. In each case, we are forced to incur these costs immediately. Most concerning is the reality that this degree of inflation will remain more permanent than “transitory” as defined by the Federal Reserve and the US Treasury Department.
As a result, we must regrettably notify you that effective August 15, 2021 we will be increasing prices by 8% for all products other than the Sit Tight collection which we must raise by 10% due to its concentration of raw materials in foam and plywood.
In addition, due to additional labor requirements COM pricing will move from grade 4 to grade 5/6 and COL pricing will move to grade 7/8. These are very difficult but prudent and necessary decisions that have to be made in order for us to continue to maintain the integrity and quality of our premium brand of Classic Modern furniture.
Please be advised that we will accept customer sold orders at current prices through the end of the day on Tuesday, August 31. However, we will not be able to honor current pricing for any stock orders. Thank you for your cooperation and understanding.
In closing, we want to assure you that everyone associated with Thayer Coggin is working diligently each day to improve the existing circumstances and to achieve longer term stabilized conditions.
INDUSTRY INSIDER | JUN 21, 2021 |
Lumber prices are finally falling—here’s why
By Marina Felix
It’s no longer news to the interior design trade: The global supply chain is a mess. But among the historically long delays and backlogs, there came some brighter headlines last week—lumber prices are falling.
Over the course of the last year, the price of softwood lumber—the type most often used by homebuilders for framing—has been steadily rising, owing to a multitude of pandemic-era factors. The clearest culprit is the boom in home renovations and building, whether it’s an ADU in the backyard or a full-blown new build. By early May, the price hit an all-time high of $1,711.20 per thousand board feet, the standard metric for lumber (compared with $412.53 on June 21 of last year, and $344.24 at the start of 2019). To put this in perspective: New homes cost an average of $34,000 more as a result of the lumber market, reports Forbes.
This week, however, the market opened at a price of $897.90 per thousand board feet, down more than 45 percent from May’s peak. “The rapid decline suggests a bubble that has burst, and the question is how low lumber prices will fall,” writes commodities reporter Ryan Dezember for The Wall Street Journal. If you’re asking John Dupra, co-founder of Rochester, New York–based hardwood flooring company Revel Woods, there is still a ways to go before we return to normal: “Softwood prices are starting to break—I would not say ‘plummeting,’ but I would say it’s more like a fever breaking.”
Many in the lumber industry felt the fall was inevitable, but examining the trend over the past year and a half, the price of lumber was an indicator of the market’s overall volatility. Like many other businesses, when the pandemic set in, mills shut down and dealers sold their inventories. It wasn’t long after lockdowns eased that the housing boom arrived—with nowhere to go, Americans collectively felt a vigorous interest in the comforts of home, and many channeled that interest into remodeling projects, while others took advantage of low mortgage rates in suburbs and yet others began building outdoor spaces. In a flash, plywood and lumber were snatched up off the shelves, adding fuel to a frenzied fire of demand in the U.S. By the time sawmills resumed operations, however, demand was so great that the supply couldn’t keep up—and as a result, prices jumped. Now that prices are on the decline, what does that mean for designers?
That depends on what kind of project they’re working on. The two main categories of lumber are softwoods and hardwoods. As a rule of thumb, softwood tends to mean a new build, while hardwood typically is used in remodels. And though there is increasing optimism in the lumber market, it’s important to note that analysts are focused on softwood.
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“Softwood prices are starting to come down,” says Dupra. “Hardwood prices have not. But typically speaking, where softwood goes, hardwood follows, so it does bode well for the future on the hardwood side.” And while softwood is of more interest for those on Wall Street, design projects will be affected by the prices of both types. “We don’t see any evidence that [the price of hardwood] is falling,” says Don Finkell of Dalton, Georgia–based EF Floors & Design. “Hardwood prices go up and down more slowly, but we’ve seen the same, not as rapid, movement as softwood prices go up. We’ve seen a steady increase in hardwood prices over the last 18 months, and 18 months ago, we were probably at the bottom with fairly inexpensive pricing—most of it has gone up 50 percent or more.”
Even though the market is breathing a sigh of relief, designers likely won’t feel the change immediately. For those working on new builds, the delays will get shorter, and budgets will be able to stretch a bit further, leaving more dollars for the design side; for others specifying custom hardwood furniture and flooring, the skies have not yet cleared. On the market side, higher prices for raw materials have left analysts worried about inflation, reports Bloomberg, but the downward change in price means that supply is on the rise, and while the lumber industry is still far from business as usual, things are heading in the right direction.
Homepage image: ©Melena-Nsk/Adobe Stock
THE NEW MARK OF AFFORDABLE LUXURY
August 4, 2021
To All Dealers
As we move forward in this “post pandemic” period we still have some bumps in the road to deal with. Delivery Schedules are still very erratic across all channels of our operation, from foam suppliers to shipping deliveries both raw materials and finished goods. Currently, some fabric suppliers are experiencing unbelievable backlogs to work through. One of our suppliers Sunbrella has notified us that they are on a 65-week delivery cycle on new orders received. With this in mind, Lazar had decided to suspend new orders for Sunbrella fabrics until lead times line up with industry parameters. We are trying to resource fabrics that can ship in average 10-12 weeks. We will advise you when Sunbrella gets back to more realistic turnaround times.
Lazar Industries, LLC