At Paladin Industries Inc. in Hiddenite, about 110 employees cut, sew, stuff and shrink-wrap sofas, love seats and ottomans for customers in high-end boutiques along the East Coast.
When owners Tim and Elaine Bolick opened the custom furniture upholsterer six years ago, the economy was recovering from a recession and furniture jobs were fleeing overseas.
The Bolicks were optimistic that their specialty niche would protect the business, located 50 miles northwest of Charlotte.
Fast forward to 2008, and Tim Bolick says he remains thankful for Paladin's relatively narrow customer base. Well-heeled customers still buy his products, which retail for $1,299 to more than $8,000, he said, despite his having to raise prices this spring for the shops that sell his furniture.
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“The furniture industry right now, it stinks,” he said. “Furniture is not something that people have to have. They can sit on that sofa for an extra year or keep that chair until things get better.”
“But at the higher end – we're a little more insulated.”
In April, the company raised wholesale prices by 5 percent to cover the cost of raw materials, which had risen 5 percent to 10 percent, Bolick said. Anticipating further increases in the cost of leather and fabric, Bolick said he may raise prices another 5 percent in October.
The manufacturer had been growing quickly, named by Entrepreneur magazine in 2006 as one of the country's fastest growing businesses. The growth has stopped, but sales are on track to match last year's, Bolick said.
Paladin saw a worrisome change at the end of 2007. One big-volume customer, a high-end retailer, went bankrupt, Bolick said, costing the company $4.5 million in sales volume.
To cope with an uncertain future, the Bolicks are scouting cheaper fabrics and leather for their furniture. The company may go after business on the untapped West Coast.
“We're making up that business slowly but surely,” Bolick said. “It's an overall slowdown. It's very, very tough.” Kerry Hall