Quaker Fabric's China Partnership A Strategic Upgrade

Carole Sloan, Staff Staff, January 30, 2006

Fall River, Mass. — The signing of a commercial agreement between Quaker Fabric Corp. and Hangzhou Zhongwang Fabric Product Co. will allow Quaker to recapture a large portion of the American and international business that has migrated to China.

At the same time, Larry Liebenow, Quaker's president and ceo explained, “it opens new opportunities in top of the bed and other businesses.” In recent years, Quaker, once a major bedding supplier, has lost ground to the bedding sourcing programs that have developed in China and other countries.

In the announcement last week, Liebenow emphasized that Quaker will provide “all of the design work, as well as a transfer of technical and technological support to Hangzhou Zhongwang.” In turn, Hangzhou Zhongwang will also become Quaker's marketing arm for the distribution of its U.S. made products to the upper end of the Chinese furniture markets.

“We will work together on product strategy and in marketing,” Liebenow added. The products produced in China will not be products “coming out of our line here. We will not be taking product here and replicating it in China,” Liebenow stressed. “There are different fibers we use here as well as specialty yarns such as spun, novelty and specialty chenilles that we have. We will be using their tools and constructions. But we will ensure our [U.S.] level of quality and service.”

In that regard, Liebenow added, “We will stand by our quality level [both for] the U.S. and international [customers].” Finding a partner that would fill these requirements, he noted, “is why it has taken so long to sort out.” The Chinese-made fabrics will encompass a broad range of constructions and designs. It will not be parallel price points to the U.S. production, “but what customers want to buy there in piece goods, in cut and sew kits as well as in fully upholstered furniture.”

Noting that this is a “long term agreement” but declining to specify a time frame, Liebenow expects to show upholstery fabric product here in the next three months. Delivery is planned for eight to 10 weeks to the United States and China-to-China in four to five weeks. For bedding and other products, “it is not our initial thrust. I wouldn't expect to see product before the back-end of the year.”

At the same time, Liebenow said, “Our product here will continue to evolve. There always are U.S. customers that need a broad range of product, and increasingly more specialized product for the upper middle and upper end customers.”

“We are committed to growing our sales based on our U.S. production. To that end we will be continuing to aggressively develop other products that for strategic and economic reasons are best produced in our Fall River-based manufacturing facilities. These fabrics include both new fabrics for those domestic and international residential customers looking for rapid delivery on custom products, as well as new products for the contract and outdoor markets, both of which place a premium on the technological expertise Quaker brings to the design and development process.”

Quaker, Liebenow noted, “is making a big effort in the jobber market and we're making significant inroads having opened the contract business. And both have appeal globally.”

Last summer Quaker launched its first two imported fabric collections, produced in China and Taiwan: a fine cotton velvet grouping and a flat woven linen-cotton group. At the time, Liebenow said these lines represented product “we don't have the equipment to make ourselves.”

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