Kitchen & Bath Design News

NOV 2018

Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.

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" WE ARE SEEING slight price increas- es, which we are willing to take on to make it a more fair balance for the overall American economy. I don't see it affecting our sales or profit margins. Manufacturers have price increases anyway this time of year. I do think it will level the playing field with other manufac- turers abroad. I feel this will point more people to American-made products, which typically are better quality anyway." Jason Swiger Design Kitchens & Bath, LLC Damascus, MD " WE HAVE SEEN an increase in the price of plywood. We used to use plywood from China. Now with the tariffs that is not possible. Our supplier is now sourcing it from other coun- tries. It would be so nice to use domestic birch plywood, but the cost is out of sight. We cannot be competitive in the market with domestic birch. This has impacted our profit margins. We have passed some cost on to the customer, but have absorbed most to stay competitive." Don Wall, owner Freedom Valley Cabinets Freedom, IN " I BELIEVE IT will affect the countertops and ready-to-assemble cabinets more than any- thing, but may force [improved] quality. The problem is the market is price-driven and I'm afraid the market will see a downturn." Cierra Shupe, designer Kelly Bros. Home & Design Covington, KY " WE CONTINUE TO source high-quali- ty products from the U.S., Canada and Europe that will not be as greatly affected by the tariffs. Our hope is that there will be progress in negotiations that will result in a trade deal that will soften the affects on pricing and still accomplish an evening of pricing. We believe that some of the low-cost private label products in the fixture industry, for example, will go away, which will enhance our domestic manufacturers' ability to compete. We are hearing from the majority of sources that they will be raising prices an additional 25% on January 1. While this will have an affect on our clients' project costs, it does not raise their cost by 25%, so it is not as drastic as it seems. It is our responsibility to be prudent about the products we source. We support some form of this trade situation but remain hopeful that it will stimulate a reasonable outcome." David Hawk, president Owner Builder Supply, Inc. Littleton, CO " I HAVE ALREADY received letters from two countertop vendors with 25% price increases on Chinese products. As a result, I have pulled all Chinese items from my dis- plays. I feel that if my clients know something comes from China, the perception is going to be that it is overpriced." Sandy Tyler, owner Kitchen Cabinets Reno Reno, NV " I FORESEE LITTLE reason for impact, since we specify domestic plywood from our suppliers and source our lumber from 20 miles away. We implore our suppliers to keep production in the U.S. and purchase as much as possible from North America manufactur- ing. This has been our policy and will continue to be our policy. We are in favor of the tariffs, since they seek to level the field and even pun- ish the dumping practices of the last decades. At the same time, the immediate rise in prices for domestic materials at the supplier level is irritating and uncalled for, leaving us disap- pointed at the lack of fairness from domestic suppliers. Shame on them for the obvious greed! We are giving push back on the rising prices through any channel that we can." Timothy Mundinger, president Warsaw Custom Cabinets, LLC Warsaw, IN " THERE WILL CERTAINLY be short- and long-term impacts [from] the newly imposed Chinese tariffs. It will not hit the industry in full force right out of the gate, but over time I believe there will be shift in the way a design business operates. It is possible a sense of urgency will be created in the consum- er to build or renovate now because of uncer- tainty around how much prices will increase in the coming months. At my company, we are already experiencing the repercussions of the Chinese tariffs with immediate price increases on cabinetry, quartz and building materials. Plus, we know there will be a more significant price increase effective with the new year. Overall, I see a negative impact on products in our industry. Many of the products our industry uses are sourced and manufactured in China. The actions we can take on behalf of our clients are staying in the know about price increases with our vendors, researching equivalent prod- uct that can be sourced elsewhere and creating pricing projections for upcoming projects based on forecasted increases. Some options we are exploring are providing price ranges to clients instead of fixed contracts, including escalation clauses in our contracts. We know costs are going to be driven up in the short term, but it is impossible to predict the long-term effect this will have on our economy. Ultimately, we know the price increases will be passed to the client, making an already luxury-priced product more expensive. Our responsibility is to be our client's advocate by researching alternative products and manufacturers while maintaining a high level of quality." Kirsten Gable, kitchen and bath designer Anthony Wilder Design Build Cabin John, MD " I DON'T SEE this impacting our business at all. Since most of our products are sourced in the U.S., the pricing will not change." Amanda Forrest, designer Lifestyles Kitchen & Design Roswell, NM " FOR JOBS CURRENTLY in the design and estimating phase, the result will be higher costs to the homeowner and the potential of either a few lost jobs that were on the bubble because price was a primary factor, or we're going to be cutting our margin to hold costs down to try and sell the job. For jobs that are already sold and had materials quoted weeks or months ago, we'll be looking at lost profit dol- lars because we're already in contract and can't go back to the homeowner for more money." Monica Miller J.S. Brown & Co. Columbus, OH " MATERIALS ARE MORE expensive already. We are dreading the tariffs. We are going to have no choice but to increase prices. I support tariffs but not on the necessary goods and services we need to operate our country." Lynne Sands, owner Decorated Bathroom Las Vegas, NV Dealers & Designers Discuss Tariff Issue WHAT DO YOU THINK? Email your feedback, contact information and the subject, 'Market Pulse' with your message to How do you anticipate the imposition of Chinese tariffs will impact the kitchen and bath trade? How, if at all, do you see this impacting your profits and prices? What, if any, actions are you taking in reaction to their imposition? 6 Kitchen & Bath Design News • November 2018 MARKET PULSE READERS' OPINIONS ON INDUSTRY-RELATED ISSUES

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