Restoration Hardware Shifting Nearly All Of Its Furniture Production To China?

If what this alleged Restoration Hardware employee says is true, the home furnishings chain may have just sacrificed its last remaining claim to distinction—high quality, American-made furniture—in an effort to increase profits. Supposedly, shoppers will see the effect of outsourced furniture through lower prices. RH furniture was always known to be fairly good stuff, if not cheap—can we now expect cheap but not good?

The employee writes:

I’ve worked part-time for Restoration Hardware for 3 years and during that time I have been amazed by some of illogical crap we’re supposed to feed our customers. However, they’ve really reached a fascinating new level. The store is now outsourcing all of its furniture to China. This has been gradually happening over the past two years, one product line at a time and they’ve finally decided to take the full on plunge and outsource all upholstered furniture and all but two or three collections of the wood furniture.

This was announced last night at our annual fall meeting. An entire section of the meeting was devoted to why outsourcing to China would not lower the quality of our furniture one bit. Not one iota. It would be exactly the same. 100%. Identical. It would just save the company $10 million. And allow all of us grateful urchins to keep our lucrative $8 an hour careers flourishing (insert threatening glare from management in case any of the political types want to get noisy) And the company isn’t greedy! It will pass these Chinese savings on to the customers—our super fine furnishings will be sold at a lower price point. But the exact same quality!!

All of these years we sales associates were told that the higher prices at Restoration Hardware were justified because our furniture was superior, handcrafted in America at companies with extremely high quality assurance standards that could be openly evaluated and monitored. We passed this information on to the customers and showed them how to evaluate the quality of the pieces, etc. And it turns out, we were big fat liars. All of you previous Restoration Hardware furniture buyers who paid extra money for your “quality” pieces were duped! Because it turns out, it can all just be made on an assembly line in China and you can get the identical quality for a lot less money. Hahahahaha! Dumbasses.

Or wait, maybe the company is lying now. Actually, you can’t get the identical quality furniture made more cheaply in China. It will be a product of lesser quality but the company is hoping really hard that charging a couple of hundred dollars less will mean that people will be blinded by the good deal.

As a sales associate it will be hard to pick which line to go with—the company I work for used to lie a lot but is now honest or the company I work for is lying now but for savings savings savings!

At any rate, I’m interviewing for a new part-time position today. My standards may not be high but they at least exist.

Comments

Edit Your Comment

  1. Coles_Law says:

    Odd choice to do this now-with oil costs increasing shipping from China isn’t getting cheaper. Good information to know though.

  2. TorrentFreak says:

    Nothing like the highest quality “Made in China” to justify higher prices.

    Companies have been getting very sneaky and more stuff gets outsourced overseas and no one seems to be doing a damn thing about it.

  3. InThrees says:

    @Coles_Law: Clearly (if this is true) the rising oil costs are still offset by the vastly cheaper labor.

    And America’s job market takes another hit. I can’t wait for the day when 5 executives are sitting around a boardroom table discussing the various offshore sources for materials and labor and wondering why no one has any money to buy their products. Fun!

  4. Parapraxis says:

    is restoration hardware selling amish heaters?

    because last I heard, the amish weren’t chinese.

    AMERICA… FUCK YEAH!!!!

  5. MercuryPDX says:

    You just wait… it’ll cost more to ship with all the lead additives. ;)

  6. Triborough says:

    Made in China is like a warning sticker that says do not but this potentially dangerous poorly made product.

  7. velvetjones says:

    I have two gorgeous dressers from Resto, bought them on sale back in 2001. I have no idea where they were made but I haven’t seen similar quality there since then.

  8. econobiker says:

    “Supposedly, shoppers will see the effect of outsourced furniture through lower prices.”

    No, shoppers will see the same prices but the company’s owners/shareholders etc will see the effect of outsourced furniture through higher margins plus the extra inspection/return goods shipping cost from shoddy Chinese outsourced goods…

  9. snoop-blog says:

    Great not only will I get lead poisoning from sitting on my couch, my dog’s liver will fail when he eats it.

  10. smallestmills says:

    I used to work for a company that produced all its solid wood furniture in Southeast Asia. While they were nice pieces, about one in fivewould come off the truck with a huge stress crack in it from the change in humidity due to traveling. I do think, as long as the company didn’t lie to me, that it was of high quality using fair labor standards, in addition to using fast growing, renewable, plantation grown trees. I am an advocate of outsourcing and importing, though, so my bias (which worked in the company’s favor) did show through in my sales technique.

  11. socalrob of the 24 and a half century says:

    So I’m not a history buff, and I haven’t been around all that long, but what I’m wondering is has there ever been a government that has said “Hey… yeah no this is BS… Everything sold in this country will come FROM this country and not some other country”?

    Meaning if the U.S. government said that they are passing a law or something that products need to be made in america if they are sold in america?

    I ask because if another government has done this before, what was the effect? Collapse of the economy of that country? Or did it succeed and the country became better for it?

    Personally I like inexpensive stuff, as any consumer because it lets me buy more. But when its been coming to furniture I’ve been learning my lesson. My mother wanted new bedroom furniture and bought it from a local unfinished furniture store where its made with REAL wood and with quality rather than quantity. It cost more but it feels nice to have something that wont chip easily, swell if a cup of something cold is left on it, wont have to be re-bought every few years etc..

  12. Orv says:

    @Triborough: Just wait. People used to say the same thing about “Made in Japan.”

  13. Mr_D says:

    @Orv: And “Made in Mexico”.

    Pretty soon when everything is “Made in India” or “Made in Vietnam”, “Made in China” will be the mark of high quality.

  14. cf27 says:

    @econobiker: Are you suggesting that price has nothing to do with cost? The company may WANT to keep its prices at the same level, but if all of its competition moves to China, they will all reduce their prices. It happened with every other good and I see no reason why it won’t with furniture.

    @socalrob: governments have tried to do that through various means — often by imposing very high tariffs on foreign goods. But, that only serves to make the country poorer, not richer, as it now has to do everything for itself.

    Consider, for example, what your neighborhood would look like if your homeowner’s association decided that only goods made in the neighborhood could be used in the neighborhood. Pretty soon, your neighbor the electrician would have to quit his job to grow corn for the neighborhood, and the plumber would be busy cutting down trees to build furniture. Your neighborhood has lost the services of an electrician and a plumber.

    The effect wouldn’t be quite as bad if your city said the same thing, or your state or the feds. But, in each case, somebody is going to have to stop doing something so they can do a job that had previously been done elsewhere. As a result, there will be nobody doing what they did before.

    In any case, US manufacturing output has never been higher. See [www.swissbusinesshub.com] for some data on US manufacturing. US Manufacturing **employment** is down. US Manufacturing **output** is up — it just takes a lot fewer people now than it used to.

  15. WraithSama says:

    “…the home furnishings chain may have just sacrificed its last remaining claim to distinction-high quality, American-made furniture-in an effort to increase profits.”

    It’s getting harder and harder to buy high-quality *anything* these days. Since everything is now made in China, Mexico, and Indonesia for the purpose of cutting labor costs, the quality of just about every consumer good you can find has gone down.

  16. Dave J. says:

    It will be a product of lesser quality but the company is hoping really hard that charging a couple of hundred dollars less will mean that people will be blinded by the good deal.

    Does anyone actually believe they’ll lower their prices? Hell no, they’ll magically discover that due to increasing fuel costs (I think a shipping container costs 8K to cross the ocean now, vs. 3K a year ago) and etc. that they can keep prices the same but brag to customers that they didn’t raise prices like the competition.

  17. Orv says:

    @Mr_D: It’s kind of interesting the way it plays out in consumers minds, too. For example, among VW owners, anything (parts or a complete car) made in Mexico or Brazil is assumed to be inferior to anything made in Germany. Among Honda owners, cars made in the U.S. are assumed to be of inferior quality compared to cars made in Japan.

  18. BeeBoo says:

    It is absurd to assume that anything made in China will be of poor or even lesser quality. An easy example to the contrary is Lenovo computers. They have been making high quality furniture and other goods in China for thousands of years.

  19. bohemian says:

    Luxury or quality anything is a joke anymore. They just market and present it as such, it will fall apart just as fast as the cheapo option in most cases.

    I will pay more for things that will actually last, I won’t pay for the illusion of such. Restoration Hardware can count me out.

  20. rekoil says:

    And to think I just read this story on CNN.

  21. dulcinea47 says:

    The difference is not (necessarily) in the quality- the difference is in what they have to pay the laborers. Even if they did use the exact same materials and exact same standards, they only have to pay the people that make it a fraction of what they have to pay them here.

  22. cookmefud says:

    @BeeBoo: “They have been making high quality furniture and other goods in China for thousands of years.”

    not for export.

  23. @Orv: on VW: that’s because, in my experience, the quality of Mexican-made VWs is worse than that of the German-made ones, but overall, “VW quality” is an oxymoron so it’s a tough call.

    Anyway, Resto Hardware was and always will be patronized by yuppie tools who think they’re getting something really special and unique no matter where it’s made, and some of the stuff can be found elsewhere for less if you look.

    it’s the same as buying stuff at IKEA, only there you pretty much know what it is (country of origin is stamped on the box) and also know that five million other people around the world also own the same Knuddl Pupsen chair or whatever, and it doesn’t bother you.

  24. meefer says:

    does this mean is i want restohardware stuff, to buy it right this second? I don’t even have my own place yet…..

  25. socalrob of the 24 and a half century says:

    @BeeBoo:
    When was the last time you went to the store and bought anything of quality with a “Made In China” sticker on it? Generally lower priced merchandise (such as that made in china or mexico) is of poorer quality.

    Quality components cost money and quality craftsmanship costs money. A staple gun will hold a drawer together as will a dovetail joint. But which holds it longer? Quality over quantity.

  26. BeeBoo says:

    @socalrob: I gave the most obvious example, Lenovo computers, formerly IBM, still considered among the best quality, if not the best.

    Where do you think iPods and Apple computers come from? Minnesota?

    Did you know that most of the expensive Italian designer handbags are 99.9% made in China, with minimal work such as attaching the handle and the “Made in Italy” tag actually done in Italy?

    Sure, most of the cheap crap is cheap crap, regardless of where it comes from.

  27. oldheathen says:

    Wasn’t there an expose in “Money” or “Forbes” a year or so ago about the already mediocre quality of Restoration Hardware furnishings…super-dark finishes used to disguise poor quality wood, that sort of thing?

    When I find it, I’ll link to it.

  28. @socalrob: That and the reason people go to China is because products can be made cheaply there. They’re not going because the expertise is better, it’s strictly to lower costs.

  29. boxjockey68 says:

    Yuck, no MADE IN CHINA for me thanks! I will certainly remember that while shopping.

  30. ninjatoddler says:

    The reason why companies try to sell the illusion of “saving” money by outsourcing production to China is because their execs want to make a quick buck under them before they jump ship with their resumes of “international” trade experience.

  31. ARP says:

    @BeeBoo: Agreed, you can get good quality stuff in China if you’re willing to pay extra for it. It’s still much lower in terms of labor costs than the US, but the overall price differential (when factoring in shipping costs)isn’t that great.

  32. ZoeSchizzel says:

    Good thing I don’t buy new furniture. Ever. Why would anyone when there are plenty of people on craigslist who purchased it at top dollar a year ago when it was new, and are now divorcing/moving/marrying/retiring and can’t keep it? I like to LOOK at the Restoration Hardware catalog, but I’d never actually buy anything.

  33. ogman says:

    If I want cheap crap, I’ll go to Walmart. This is a huge mistake for RH. I’ll find a new place to look for quality merchandise.

  34. razremytuxbuddy says:

    @ZoeSchizzel: Ditto here. I can’t even remember the last time I set foot in a furniture store. I go into Restoration Hardware once a year or so, to look around if I’m just bored.

  35. ABOMIBOT says:

    On June 18, 2008 Restoration Hardware was de-listed from the NASDAQ and ceased to be a publicly traded company. They were bought by Catterton Partners, a private equity firm specializing in “middle market consumer companies.” They also own:

    Outback Steakhouse
    Archway
    Breyers
    Van’s

    among many others.

    Their “realized investments” (which I take to mean companies they bought, squeezed every drop of potential profitability from, then sold) include:

    Build-A-Bear
    PF Chang’s
    Odwalla
    Case Logic
    Frederic Fekkai
    Wellness Pet Foods

    among others.

    Why do I know this? Because I’ve been trying to find out where my two Brocade Home vases are — after having been lied to twice by customer service who claimed my vases were on the way. One of them even gave me a tracking number! (Brocade Home is a division of Restoration Hardware.)

    Now the web site is completely gone and the customer service number merely plays a message saying they’re “in transition” and to call again another time.

    It seems Catterton Partners are moving quickly to get their latest purchase on the “realized” list. These new owners do not care about the product or the customer experience. All they care about is maximizing profit for their private investors. Cutting Brocade Home off at the neck and moving all RESTO manufacturing to China is merely part of the plan, I’m sure.

  36. bohemian says:

    @BeeBoo: It isn’t “China” that is the issue. It is the relationship between greedy US companies that push Chinese manufacturers to bid as cheap as humanly possible. Then the manufacturer tries to cut corners either so they even can turn a profit or because they are greedy. It is a systematic greed based commodity system perpetuated by both business entities in order to try to squeeze as much profit as possible and will get away with whatever they can to do so. It has nothing to do with China as a country or the Chinese as a people. It is business greed. US manufacturers are there because the laws and regulations are still loose and the currency still favors doing business there. If China dried up as a resource they would all be running to the next country they could do this in.

  37. AlfredaCosta says:

    I worked at Resto for several years, and this has been happening gradually.
    If my memory serves me correctly, the reason they can claim that the
    furniture won’t go down in quality is because the company that Resto owns
    (in Northern CA) completely controls the manufacturing/quality control at
    the factory in China. Same designs, same manufacturing details (dovetail
    joints, cedar drawers, etc.). This is for the casegoods–hard stuff like
    tables, beds, dressers, etc. I’m sure that the company in CA is still making
    some pieces, but you’ll probably have to ask a lot of questions to find that
    info out.

    The kicker is going to be the shipping. When this first started
    (manufacturing in China/shipping to the US) back in 2004/2005, a LOT of the
    furniture was damaged/nicked/dinged. This shouldn’t be surprising to
    anyone–this is massive, heavy furniture and shipping it overseas will take
    its toll. Two big problems with this: one, since it does take a while to
    ship, if you need a replacement piece (say what you want about Resto, but
    their return/exchange policy if you are unhappy cannot be beat) and it’s on
    backorder you will wait forever. The other problem, unless they’ve really
    overhauled everything since I left, is that the tracking systems for the
    furniture are all manual–you are at the mercy of the customer service
    person at the store you ordered from. If they are good, track the progress
    of the shipment, and stay on top of things, you’ll be fine. If they aren’t
    on top of things, forget it. Oh, and watch out for terms like “lightly
    distressed” in the descriptions. That can cover a world of sins.

    I’m surprised about the upholstered items being shipped overseas. Most of
    this stuff was made by companies in the US with design exclusives for Resto,
    and at least one of the companies also made products (different styles) for
    Crate & Barrel and Pottery Barn. I’ve just looked at one of the company’s
    websites that I know used to manufacture for Resto, and I can’t find
    anything that says it’s all made in America. So, if their suppliers are
    going overseas, they probably have little choice in the matter.

    The service at Resto can’t really be beat. It’s one of the few companies
    I’ve ever worked for (retail) that gave front-line employees the power to
    make things right for the customer. The only items that got kicked up to the
    store level customer service/managers were the real problem items: dining
    sets with chairs missing, bad damage, pieces that didn’t match, and so on.
    It really was a good company to work for, particularly at the retail level.

    Former Resto Employee.

  38. backbroken says:

    So, that $69 brass cabinet handle that I laughed at will now cost $64.99 and be made of a copper alloy?

    Yeah, I’ll pass.

    Of course, this is an entirely reasonable course of action for the company. As inflation races ahead of wages and the housing market continues to tank, the segment of the population willing to overpay for household furnishings has greatly diminished. When times are good, you might consider splurging for that $69 brass handle. But when times are bad (and I realize that our definition of ‘bad times’ in this country is having to cut back to one $4 coffee per day) we want discounts.

  39. speedwell (propagandist and secular snarkist) says:

    @ZoeSchizzel: Good for you. Do you pay a delivery service, or do you own a pickup or an SUV?

    I can’t go out and buy a delivery vehicle just so I can save a few bucks on furniture. I can’t afford nice new furniture without taking it up the (ahem) from their finance company or a credit card. I actually like disposable Eurotrash furniture. Ikea for me, baybay.

  40. MrMold says:

    Ha! Historically, Chinese goods were vastly superior to the fakes made in Europe or the US. Fantasies about US whitey superiority should be gone by now. Wake up…China is back BABY!

  41. latemodel says:

    Some of the finest leather couches marketed as being made in Italy, are in fact screwed together in China. The only components still sourced from Italy is the leather. When manufacturing was contracted to a company in China, the cost of labor was so low that it was not a factor in the cost of manufacture, only the added shipping expense. These Chinese guys will make 3 couches a day for $20.

  42. econobiker says:

    @socalrob: Hey man- what you are asking about is protectionist or has been tried with tariffs to increase the cost of imported goods to the same level of domestic goods. It can work in some cases to help the domestic manufacturer (ie Harley Davidson and the over 700cc motorcycle tariff of the 1980’s) get back on its feet. Then it also can backfire in the example of the early ’80s tariffs on imported Japanese cars which both encouraged the Japanese to build domestic assembly plants and the US car dealers to upprice their cars to the level of the Japanse cars versus underselling the Japanese cars.

    That said what you mention about buying quality is correct. Case in point are those cheap $200 black metal futon sets sold at walmart, target, etc. The price point is usually $200-$250. These have crappy futon matresses stuffed with “rag” or “lint” as the best description and the covers usually cannot be easily removed for washing. I always see these broken in the dumpsters during move out times at my apartment completx. Conversely, I have just a high grade futon mattress with removable coverwhich cost about $200 in 1992! that has lasted since then on various free recovered and repaired cheap frames previously mentioned. My plan is to finally get the $400-600 for a quality frame which I estimate will last for decades versus the 3-5 years on the cheap frames. Most Americans do not consider the cost of ownership/replacement- just aquisistion costs…

  43. rodeo40 says:

    Furniture is the biggest sucker deal out there. It’s all crap unless you really buck-up and pay Baker-like prices. The problem is that most people are OK with crappy furniture as long as they can afford their poorly-made 4500 sq foot vinyl-clad house in the ‘burbs and put gas in their Expedition.

  44. parungaj says:

    @ABOMIBOT: Ohmigosh! I also put in an order with Brocade Home during their additional 50% off sale. I placed the order July 25th for bedding and pillows and I have yet to receive the entire order. Did you experience their weird way of charging? Instead of charging your card the correct amount for each item shipped, they charge the up to the 50% mark so as of late my current pillow covers are billed to my card at 70 instead of $35. Now after seeing your post, I’m getting scared and wondering what is going on with brocade home.

  45. mariospants says:

    Restoration Hardware is playing with fire here: they can jeapardize the success of their business if they mess with their formula but if they don’t cut costs, they stand to go out of business entirely.

    As long as the actual pieces that China builds are identical to their American coutnerparts (framing, fasteners, etc.) then brand-conscious consumers will flock to a cheaper Restoration Hardware.

  46. drrictus says:

    RH, kiss your differentiator good-bye.

  47. ELC says:

    Strange b/c in my furniture research, the ONE furniture item that most people have not outsourced (due to shipping costs) is upholstered furniture. Unlike wood furniture, that stuff can’t be broken down into tite boxes for shipping.

  48. Bilibo says:

    @boxjockey68: “Yuck, no MADE IN CHINA for me thanks! I will certainly remember that while shopping.”

    Really? Care to share where the computer you sent your comment on is made?

    Let’s face it, China is currently world’s favourite whipping boy. You seriously think that things made in sweatshops in India or Sri Lanka are of better quality than those made in a Chinese factory? So why China? Well, because they’re the biggest and the most visible. By putting them down certainly appeals to some people’s smug sense of self-importance and superiority.

    There are obviously problems with some of the things made in China, but certainly not the dooms day scenario some people would like us to believe. The sweeping statement that everything made in China is of poor quality is simply not fair. Most of the things I use are made in China and I have yet to have any complaints. You get what you pay for.

  49. narf says:

    @ericole: Actually, Ikea has managed to flat-pack some of their sofas!

    That said, shipping huge objects hasn’t been an issue, but it certainly does increase the transportation cost per unit.

    That said, the bigger issue is the cachet (or lack thereof) of the “made in China” label. They can produce good quality stuff just like you can have shoddy merchandise made in top tier nations. Alas, when most companies move manufacturing over to China, it’s not just for cheaper labor, but also where else can they cheapen it as to seek more profits.

  50. decoitous says:

    Moving production overseas right now is an interesting choice to be making. I’m in manufacturing, and seeing more and more “mothballed” factories being brought back to life as the combination of higher fuel costs, requirements for lower inventories at the OEM’s and Home Centers, and appreciation of Yuan vs. Dollar is bringing more non-commodity products back to the U.S. Interestingly, many of the investors who are financing these re-starts are Taiwanese and Korean — same folks who invested in China over the past 20 years.

    Are you going to see lower quality in product coming from China? Bitch, puhleeze. You already are. Cheaper materials, cheaper coating/finishing processes, less expensive connectors and hardware are building natural product obsolescence into your consumer goods now, and until this most recent price shock (which really won’t hit consumers in full until January 2009) has started to impact our “disposable” culture.

  51. tcolberg says:

    Manufacturing in China doesn’t have to be of a lower quality than work done here in the United States. Many companies outsource work to subcontractors in China and only provide them with a general spec on the product and a target unit price, leaving it up to the factory manager to do whatever he had to do to meet that target price.

    If Restoration Hardware merely wants to take advantage of the labor costs over there and still wants to maintain the same level of quality, they can employ full-time product inspectors to supervise the work being done in the Chinese factory to make sure that the product design and materials are the same as what we would have seen used in the United States.

    Good quality product can be made in China as long as the company desires a good quality product to be made.

  52. InThrees says:

    @backbroken: “So, that $69 brass cabinet handle that I laughed at will now cost $64.99 and be made of a copper alloy?”

    Brass is… uh… a copper alloy. Copper + Zinc, in varying proportions = Brass. I think what you probably meant was that $64.99 Faux Brass will be 89% lead, will be hollow, and will be filled with anti-freeze.