CHICAGO - In a high-end/low-end partnership, Dutch furniture molder Hartman Group BV will gain a U.S. molding foothold through a partnership with Syroco Inc. Hartman, a strong player in European resin furniture but less well-known in North America, completed the agreement during the International Casual Furniture Market at Chicago's Merchandise Mart. Hartman issued an announcement Sept. 16 during the show.
Hartman focuses on the mid-to-high end of the injection molded outdoor furniture business sold through specialty stores. Hartman chairs retail from $32-$78. Its tables sell for $190-$550.
Syroco, with 40-50 injection molding machines at factories in Syracuse, N.Y.; Siloam Springs, Ark.; and Corona, Calif., is the largest U.S. molder of resin furniturefor mass retailers. Syroco controls about 25 percent of the U.S. market, according to its owner, Marley plc of Sevenoaks, England, which acquired Syroco earlier this year from Syratech Corp.
Syroco's 1994 sales were more than $80 million.
Both companies exhibited at the Casual Furniture Market, an event targeted to specialty stores, which range from mom-and-pop patio outlets to small regional chains. According to industry observers, smaller specialty stores have begun dropping resin furniture rather than attempt to compete with the cutthroat pricing of mass retail.
That trend is alarming to resin furniture molders, who have seen polypropylene price hikes during the past year evaporate what small profit margins they make on stack chairs and lower-end tables. PP prices have been declining recently, however.
The partnership will help both companies, by joining Syroco's strengths in molding and distribution with Hartman's expertise in technical and product development.
``The positioning of Syroco is far different than ours, but that can be a strength,'' said Frank Roos, Hartman's sales and marketing director, interviewed at the Chicago show.
Hartman products will be distributed to specialty retailers in the United States, Canada and Mexico from Syroco's Syracuse facility. Heading the partnership will be Erwin Gremmer, a casual furniture veteran who has worked with Hartman, the former joint venture between Alli-bert SA and Rubbermaid Inc., and Grosfillex Inc.
Hartman, a family-owned company based in Enschede, the Netherlands, has tried unsuccessfully for several years to gain North American molding. Two years ago, Hartman and Canadian furniture molder IPL Inc. formed an alliance, but the deal fell apart after only a few weeks, on the eve of the 1993 Chicago furniture market. Hartman then created its own U.S. and Canadian sales organizations and moved into a year-round showroom at the Merchandise Mart.
Roos said talks with Syroco began about one year ago. The sale of Syroco delayed the final deal, he said.
John Fravel, president and chief operating officer of Syroco, said the partnership will source furniture from Hartman in the Netherlands and do some molding with Hartman molds, but exact details of the molding arrangement still have not been worked out.
