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Hearth & Home September 2016

Richard Wright
Hearth & Home Magazine

China, Nebraska
& the Egg

Our lead story this month concerns China, and its ongoing effort to reinvent itself. It may be difficult to believe, but the population giant of the world (1.4 billion people vs. 316 million U.S.) is experiencing a worker shortage.

In an effort to create a manufacturing economy in inland areas far beyond its south coastal region, the government put up a number of high-speed rail systems, highways and factories. That effort worked, but as a result it allowed what had been a large migratory work force to stay at home in the more rural areas and still make a decent wage.

Which in turn has created a worker shortage in the main manufacturing areas of the South.

Will this have a negative impact on the patio furniture industry in the U.S? Not yet, but manufacturers do have to be watchful. Right now the European economy is far from strong, and thus is doing less business in China. When the downturn ends, that will change, and there will be a greater difficulty in finding available skilled workers.

Beginning on page 14, writer Tom Lassiter updates a report he did on China back in 2010. To help you understand the China situation, he spoke with Bob Gaylord (Agio), Margaret Chang (Treasure Garden), Albert Lord (Patio Renaissance) and Tom Murray (NorthCape).

Dallas & NFM

Try to imagine how you would feel if a retailing colossus, in the business of selling patio furniture and grills, built a 560,000 sq. ft. store in your city. In addition, prior to opening the company, a spokesman predicted they would break the billion-dollar revenue mark in the first year.

Knees shaking? Cold sweats? Trying to choose between flight or fight? That might have been what local patio dealers experienced when they woke up at night, but during the day they kept an eye on the new competitor, and adjusted their offerings and strategies throughout the season. They listened to shoppers. They watched Goliath’s pricing, as well as their own.

It’s been a little over a year now since Nebraska Furniture Mart (NFM) opened in Dallas. Berkshire Hathaway owns NFM, and the fellow who made that billion-dollar prediction was Warren Buffett.

He was wrong. They didn’t reach the billion-dollar mark. A best guess is they ended the year around $750 million.

And what about the local patio retailers? Of the four companies we interviewed, only one noticed a slight dip in revenues; the other three did very well (see “Buffett Does Dallas”).

Passion for the Egg

Hard to believe, but it’s been over 30 years since Ed Fisher introduced his Big Green Egg to the U.S. Since that time, the company’s growth line has been both steep and steady. Six years ago, Fisher stepped back a bit and Ardy Arani became CEO and managing director.

Apparently that change occurred as seamlessly as a well-executed hand-off in a relay race. What began as a thought in Fisher’s mind is now a strong business with over 4,000 dealers in 50 countries, and legions of passionate Egg owners (see “Egg-cellence!”). Here’s a tip of the hat to Ed Fisher, Ardy Arani, and all the others who form the extended Big Green Egg team!

See you at Casual Market Chicago!

More Stories in this Issue

China Reinvents Itself

By Tom Lassiter

As China remakes its economy, patio furniture manufacturers must cope with a shortage of workers and much higher costs of labor.

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Buffett Does Dallas

By Tom Lassiter

One year after the Oracle of Omaha brought his Nebraska Furniture Mart model to the Lone Star State, most local patio shops are still enjoying banner years.

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Blowin' in the Wind

By Mark Brock

Collaboration is the answer for Greg Voorhis and his team as it leads to a “Shift” in Sunbrella styling, and demonstrates the capabilities of performance fabrics.

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By Lisa Readie Mayer

After three decades, Big Green Egg maintains its leadership position and shows no signs of slowing down.

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Sitting Pretty

By Richard Wright

Annual conversations with top executives on wide-ranging matters and issues.

It was a good year, not a great year, for patio furniture manufacturers, but no one is complaining.

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YOU Be the Judge!

By Lisa Readie Mayer

How tapping into the world of competition barbecue can help you grow your business, and have fun doing it.

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Tapping New Markets

By Bill Sendelback

Some hearth retailers are finding new, and lucrative, sales opportunities in fields such as commercial and hospitality.

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H.E. Fireplaces, Go!

By Bill Sendelback

With a boost from the EPA, manufacturers exit the R&D department with certified, high-efficiency, wood-burning fireplaces that are rapidly gaining acceptance and sales.

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2016 July Business Climate

In early August Hearth & Home faxed a survey to 2,500 specialty retailers of hearth, barbecue and patio products, asking them to compare July 2016 sales to July 2015. The accompanying charts and selected comments are from the 212 useable returns.

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