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rdmBlueBackgroundBY RICHARD DE MELIM


Upholstery giant Natuzzi announced a new business plan is on the way to mitigate the impact of tariffs imposed on China-made goods arriving into the U.S.

 

As we reported yesterday (see related), the imposition of tariffs is hurting the company, which has manufacturing in China along with other locations such as Romania and Brazil in addition to its domestic plants in Italy.


It is considering "alternative manufacturing strategies," which could mean anything from building a factory in the U.S. or elsewhere or even partnering up with another producer.


The U.S. is clearly an important market for Natuzzi, but then so too is the U.K., with the producer responsible for a sizeable proportion of the circa £90 million worth of upholstery that landed on British shores in 2018.


It won't have escaped your attention that the pound is currently worth about €1.08, a far cry from the €1.44 it briefly traded at in the heady days of the summer of 2015. There is nothing to suggest the pound has hit the floor yet.


This is impacting the cost of many raw materials imported into the country by U.K. furniture makers, but it is also not good for E.U. producers such as Natuzzi wanting to export to Britain.


Brexit looms large. Not just on the value of the pound but on potential tariffs for furniture products arriving into the U.K. market, given the shape of Britain's impending exit remains ill-defined.


Not all producers consider the U.K. market too big to ignore. For some, protectionist policies such as stringent flammability regulations have already been enough to put them off wanting to sell here. Others may choose to focus on other markets if trading here becomes onerous.


But for some, Natuzzi included, the U.K. will likely remain a key cog in the global distribution network.


How low would the pound have to go, or how big would the custom tariffs have to be, for the likes of Natuzzi to decide to acquire or build its own manufacturing facility in Britain?


Related Story

— Natuzzi seeks 'alternative manufacturing strategies' amid tariff challenge



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