In slowdown, chairmaker finds comfort in tradition

By Peter Graff

PRINCES RISBOROUGH (Reuters) - When the rest of Britain's furniture trade headed to China for mountains of cheap leather sofas to slake the demand of a raging housing boom, Edward Tadros had a different plan.

A third-generation furniture maker from a traditional English chairmaking region in the Chiltern Hills, Tadros opened up a high-tech factory in southern England making wooden chairs in old-fashioned styles.

He stuck with traditional designs and a choice of custom upholstery, appealing to an older segment of the market rather than first-time buyers in their 20s and 30s with access to easy credit who thronged showrooms during the housing boom.

So far his has been a resilient niche.

"If people are building houses willy-nilly, it's got to be good for us," he told Reuters. "But just because they aren't building or moving, it doesn't have to be the disaster that people think."

Home improvement chains across Europe are struggling as shoppers cut back on spending amid rising fuel and food costs. Few have been hit harder or faster than the furniture sector in Britain, now largely made up of the sort of importers that once helped put many British manufacturers out of business.

Sofa firm ScS upholstery, with 96 shops, was bought by private equity firm Sun Capital Partners this month for a nominal sum after its shares lost more than 90 percent of their value this year. Shareholders are likely to get nothing.

Land of Leather Holdings Plc have also fallen by over 90 percent since last August and the company raised 15 million pounds ($30 million) earlier this month.

People tend to buy furniture when they are buying a new house, but the housing market has frozen. Mortgage approvals fell to a record low of just 42,000 in May, 64 percent lower than a year before, and are forecast to fall further.

Yet at Tadros's factory, one of the last industrial-scale furniture makers in Britain's old chairmaking heartland, the orders keep coming in.

"We're ahead of the budget. I think we're very fortunate," he said on the factory floor, where workers operate giant computer-controlled machines that saw hardwood tabletops and cut upholstery patters.

"We had an open house in the middle of May. We've sold into the retailers extremely well. We're ahead of our plan."

TOP END HOLDING UP

Although it is still early days in the downturn, retail analysts say the higher end of the market is so far holding up better than the mid-priced warehouse retailers.

"The lower to middle end of the market has been an absolute disaster," said Freddie George, retail analyst at stockbrokers Seymour Pierce. "At the mid-end, your ScS upholstery, your Land of Leather, they're absolutely on their knees."