Thu, May 16, 2019 - Page 11 News List

Coaster to avoid higher US tariffs

FACING HEADWINDS:The furniture dealer said it would expand its customer base by promoting sub-brands such as CoasterEveryday, CoasterEssence and CoasterElevations

By Kwan Shin-han  /  Staff reporter

Furniture dealer Coaster International Co (客思達) on Tuesday said that it is considering sourcing more goods from Southeast Asian countries instead of China to avoid higher US tariffs.

The company sources about half of its furniture from Chinese suppliers and the rest from Southeast Asian countries, such as Vietnam, Malaysia and Indonesia, with the US its most important market, a company official told the Taipei Times by telephone.

“We might lower the proportion of Chinese products next quarter, as we are still evaluating the effects of the 25 percent tariffs,” said the official who asked to remain anonymous.

On Friday last week, the US raised tariffs on US$200 billion of Chinese goods to 25 percent from 10 percent.

Coaster said it would raise the prices of its Chinese-made products to reflect the tariff increase and might import more products from Vietnam to avoid tariffs.

“However, Vietnam’s conditions, such as infrastructure, customs and efficiency in general, are still less favorable than China,” the official said. “We are conservative for this year’s outlook, as uncertainties remain and changes can come at any moment.”

Facing the headwinds, the company said that it aims to improve its management and increase delivery efficiency this year.

The company said that it would also expand its customer base by promoting its sub-brands, including CoasterEveryday, CoasterEssence and CoasterElevations.

Coaster last quarter returned to the black with net profit of NT$11.82 million (US$379,942), from net losses of NT$101.85 million a year earlier, when it conducted large-scale product adjustments, which led to higher operating expenses.

While revenue decreased 1.54 percent to NT$2.96 billion, gross margin improved by 7.33 percentage points to 29.04 percent and earnings per share reached NT$0.16, thanks to a better product portfolio and improved marketing channels, it said.

Coaster has engaged with about 8,000 small and medium-sized US furniture companies in an online-to-offline supply chain, and cooperated with major e-commerce channels operated by Inc, Wayfair Inc, Walmart Inc and Lowe’s Co, the company said.

However, it is not eager to boost its e-commerce contribution, as that would hurt sales at brick-and-mortar stores, which contributed 79 percent to revenue last year, Coaster said.

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