Lane shipping more jobs off shore.

Implications: -Lane, a division of FBN is making a concerted effort to manufacture long runs of soft goods off shore in the hopes of achieving the same I.M.U. gains that all the case goods manufacturers enjoyed in the last 15 years.

Analysis:  

-It is only a matter of time that the majority of soft goods in furniture will be sourced off shore. Lane and motion is the intuitive subclass in a price point that has been tough to source off shore due to the penetration of freight on the C.O.G.S. . . . Motion furniture lends it’s self to being made up of components that will allow the nesting and square foot utilization needed to rationalize full container loads. The components of the motion furniture will nest and stack very efficiently facilitating the value of each container of soft goods to almost double.

-The next dynamic will be to re design and re think the design of sofas, love seats and chairs made up of components (not "solid state") that will fill all the air in the shipping containers. Foam will be vacuumed packed and all covers will be cut n’sewn off shore.

-Domestic capacity utilization will become a major challenge for LZB,ETH,FBN and the other players. With the exception of upper end and artisan/custom/design sofas most soft goods will be produced off shore and assembled in the U.S.A.

-The big domestic manufacturers are going to have to quickly strategize how they are going to divest their manufacturing square footage and mitigate their capacity utilization issues.

-Not all the players are going to survive. The quicker management drops the façade that soft goods are not going to be sourced off shore across all price points and manage their domestic assets towards profitable and creative divesture the better chance they have at survival.

-The future is here and it is not domestic soft goods manufacturing!