Baldwin Forecasts More Donghia Hotel Business

August 29, 2005

NEW YORK, New York — Crans Baldwin has big plans for the growth of Donghia Furniture/Textiles Ltd. and Bergamo which now add up to a $100 million business for corporate parent Rubelli including its other holdings and distribution agreements.

"Rubelli has prospered through a series of acquisitions spearheaded by Favoretto Rubelli, the head of the venerable family-owned company by the same name," Baldwin said.

During the past decade, Rubelli has built a group of high-end fabric companies through acquisition, "and he isn't done yet," Baldwin commented. So far, the acquisitions include 'Bises Novita,' the eclectic color and design driven editeur; 'Lisio,' which reproduces classic Italian documents almost always in silk; 'Dominique Kieffer,' the foremost French editeur which specializes in natural fibers. Rubelli also owns half of Bergamo, acquired in 1997. Baldwin was brought in as president of Bergamo and now also heads Donghia, Rubelli's most recent acquisition.

Donghia was established by designer Angelo Donghia. His cousin Sherri had joined him in 1970 as executive vice president of design and marketing was able to continue the business when Angelo passed on in 1987. She now reports to Baldwin.

Donghia, with 11 showrooms to itself, is Rubelli's first multi-line home furnishings company. Donghia also consistently represents independent lines in its showrooms including Pollack & Associates, Henry Calvin, Brentano, Boyd Lighting and Maya Romanoff. Donghia also represents other lines like Frey-Boussac but not in all showrooms.

Baldwin's mission statement for Donghia is to build it "through profitable internal growth into the leading luxury home furnishings design company." Donghia produces a broad range of luxury contemporary home furnishings including lamps, furniture, accessories and textiles. One obvious area of growth for Donghia will be hospitality. Baldwin expects to build this hospitality sales for Donghia in the same he did it at Bergamo. On the other hand, Donghia is very strong in the residential market. Baldwin feels this will help Bergamo. "The residential market is the largest market for us and also the hardest to pay attention to."

"Hospitality is 1/3 of Bergamo's business today and only 15 percent of Donghia's," Baldwin explained. "Donghia is one of the most popular lines when it comes to hotel specification but in terms of the order, that's another story."

Bergamo had this problem when Baldwin got involved but he said he was able to correct it. Baldwin refers to Bergamo as the low-end of the high-end in hospitality fabrics today. He is selling Bergamo fabrics for $17 to the hotel trade, he said, by re-engineering the original designs. "Our goal with Donghia is to add higher-end, goods in the luxury-end of the market resulting our taking a larger share of the high-end market."

"With Bergamo in contract, we can do our own weave downs. When a printed version of a design is required, we turn to P/Kaufmann, our converter of choice. Designers are saying they want to see what they specified at the hotel project. Through weave downs and print downs, Baldwin expects to give them what they want for both lines.

"Hotels are now claiming seven-star status. After the spa, plasma screen and internet access, you need to provide a beautiful environment to wrap it all up," he said.

"It used to be that hotels were much cooler than homes when I was a kid. Today, houses have mini-spas. It is harder to make a hotel room that is significantly finer than the homes the guest owns. That's why Las Vegas is successful."

"You can't look at hospitality as a domestic business anymore. It's completely international. Editeurs market by territory and distribution agreements but the high-end luxury hotel business is international. Hotels can be designed anywhere if your own geographic restraints get in the way, you are limiting your business. Too many suppliers are behind the client in realizing this. Today, you can have a Mandarin speaking designer in Texas who's working on four projects in China. That didn't use to be normal; it is now."

"We're developing a global strategy for hospitality. Rubelli has reciprocal arrangements with other mills in China/Italy and America. Distribution is no longer the issue. We're vertical globally. We can offer sharper pricing and quicker delivery based on our relationships with our partners." Baldwin also points out that "suddenly, everyone in the U.S. is running 24/7 and the mills in the States are turning away custom work because of the Euro. This creates a delivery problem. If you go to Europe, where the business is depressed, the deliveries are worse. As a result, Rubelli utilizes China to produce extraordinary fabrics at $200 a yard that would be outrageously expensive produced anywhere else today. India has also become much more efficient. In the end, China will be its own niche and we'll be more focused as producers. China will cause other industries around the world to make better products. That's how we will survive."

Baldwin said that wealth is growing worldwide no matter what the geography. "We focus on where the clients are. Why shouldn't someone in Mexico have the same goods as someone in Dallas, Texas? Our goal is to make the best one-of-a-kind 'craft' products; not mass produced. That's why Donghia still makes a lot of its furniture lines in the U.S. Did you know that American made handcrafted upholstered furniture is still the best on this earth," Baldwin added. Baldwin points to the remnants of the high-end of furniture that is still made in Michigan, Western New York, Maryland, and Whittier, California.

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