Haverty Furniture Companies Inc. Q1 2010 Earnings Call Transcript
We have several ocean carriers available to use from all our major Asian ports which helps ensure that our merchandise will get on a ship when requested. This allows for different transit times from these major ports to even out the arrival of merchandise into our distribution centers.
Many of the factories in China did have fewer workers return from Chinese New Year than they expected and they experienced a tougher time getting ramped up back up for production.
These issues seem to have improved slightly with most of our suppliers now increasing production and shipping sooner than originally planned. We have had a few supply interruptions due to factory closures but for the most part we are in the larger and stronger facilities in Asia and have worked through most problems.
Our merchandising team is frequently in Asia working with these suppliers and several of our executive team will be visiting throughout the next few months. We are adjusting to the realities of relying on Asian production for the majority of our goods.We are adapting our ordering patterns by factory and group to the changing environment in Asia to minimize stock outs. By analyzing each factory's performance and individual criteria such as quantity minimums and lead times we can adapt our ordering patterns accordingly. We focus on leveraging the better performing shorter lead time merchandise which helps us be in stock and to better serve our customers. I wanted to review some of the merchandising trends from the recent market. There continues to be a shift to having more function in furniture. One example is built-in storage and wooden case goods. The storage is hidden in many places in the furniture pieces giving the customer as much spatial functionality as possible. Other examples of higher function are in the home office where features include tilt desks that gave the customer the option of setting customized comfort positions for working at home. And the most obvious example of function in furniture is the reclining motion built into upholstery. In many cases the product has been designed to hide its ability to recline. Read the rest of this transcript for free on seekingalpha.com
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