Horizon Home expands upholstery offerings by capitalizing on Mexico production

PHOENIX — The word is out that Horizon Home is back in the upholstery business, and the company shows no signs of slowing, exhibiting five new frames in the upcoming High Point Market, in addition to two it featured at Las Vegas in January.

“Now the word is out, people know that we’re in the upholstery program business,” said Felipe Orozco, vice president for sales, adding, “Product is going out the door, initial shipments are hitting retail as we speak.”

Given the demand for upholstered furniture, the company has not been as affected by supply chain issues because their upholstery suppliers are all located in Mexico.

“Because we work with the Mexican upholstery market, which is not as vibrant as U.S. market, there is supply. We’re being proactive, so if we need to bring product in from Asia we can do so as well,” said Orozco.

The fabrics Horizon Home uses for its U.S. products are geared to the middle to upper end. These fabrics are used for higher-end products in Mexico where there is less demand at that price point. Orozco said that as the company’s requirements go up, it will ask their partner mills to bump up production. The company plans to talk with key accounts to reserve fabric for them.

The company improved frame construction and is now using self-decking on all its frames. This did not correspond to increased production costs because the company was able to realize savings on the labor side. Self-deck on the fabric costs less to stock and involves one process less to complete, according to Orozco. Even though the company spends more on the covers, the other price-savings make up for the difference.

Orozco noted that in Mexico’s cities, there is a big competition for labor. “For us, when we looked at this program, we went with a labor pool that is one hour outside of the city. In Mexico, people don’t commute that far, and they rely on public transport only. This factory is located outside the city—it’s a captured labor pool,” said Orozco.

“Our location allows us to expand our labor pool as we grow and gives us a favorable labor rate because the cost of living is less.”

With so many manufacturers nearshoring in Mexico, freight is still very volatile right now, according to Orozco. Demand is greater than the supply for transportation.

Horizon Home has a logistics department in Mexico that has become more involved daily to control transport costs. “We’re looking at transloading at the border on goods that won’t have impact if they’re touched at the border.”

Currently, the company is working with owner-operated transport as Horizon Home has found it to be a less expensive alternative to working with larger shipping concerns.

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