New River closes outdoor furniture division
Cinde Ingram -- Casual Living, December 2, 2011
New River Furniture Company closed its outdoor factory in Brazil, leaving casual furniture dealers who placed early-buy orders without that furniture resource.
Michael Mettendorf, vice president of sales and marketing, said he was contacted Tuesday night and told the factory owner had informed more than 100 workers Monday that the outdoor furniture factory in Medianeira, Brazil, was closed.
Reasons cited included the unfavorable exchange rate between the Brazilian currency and the U.S. dollar as well as Brazilian inflation in the cost of raw materials.
"I was just very shocked by it because we had just spent money on photography, new product development, samples, the show, advertisement - just a host of marketing materials which probably was over $100,000," said Mettendorf, who began sharing the news with sales reps and dealers on Wednesday.
The news was also being shared with Virginia Beach-based customer service, warehousing, finance, marketing and other personnel. "At this time of the year and in our economy, it's going to be very difficult to find something," Mettendorf said. "It would have not been my choice to end it this way."
The company entered the U.S. market in 2005, primarily by offering rockers made of Brazilian cherry and Brazilian maple wood. Its line expanded over the past six years to include eco-friendly, water-based Reve finishes and full deep seating collections.
The company had 600 dealers at closing, but had lost some of its largest customers because of pricing issues.
Mettendorf described this year's early-buy response as better than last year's. "The early buys will not be shipped, unless they can be satisfied with some existing inventory in the warehouse," he said. "Nothing new is coming from Brazil unless is in on the water. We have some merchandise in Virginia, which they will deplete and then close that warehouse. The bad thing about that is, you're talking about claims and warranty issues and you're walking away from that."
"It's bittersweet," Mettendorf said. "It's never easy shutting something down that you've invested in. You build something, you're part of creating a brand and making it worthwhile and you have people depending on you - not only your reps but your dealers. Obviously, the exit in itself is trying to the dealers. I would like to thank our dealers and everyone involved for their efforts in multi-years."
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