Qualita Assurance – the Latest from Lithuania

Buyers looking for a fresh take on living and dining cabinet are in for a treat when the January Furniture Show (finally) comes around this month and Qualita takes the stage. Following up on our in-depth profile in January’s issue, we caught up with MD Andrius Miničius to learn more about the benefits of working with his Lithuanian manufacturing powerhouse …

In January, Furniture News was given an access-all-areas pass to cover the background and latest developments of Qualita, the UK cabinet brand and Lithuanian manufacturing powerhouse.

We revealed how Qualita had secured the production and distribution rights to Winsor Furniture’s popular Stockholm collection, after the latter’s Vietnamese factory was destroyed in a fire, and looked at the significance of Qualita being selected to represent all of Laura Ashley’s cabinet sourcing and manufacture.

Now the postponed January Furniture Show (24-27th April, at the Birmingham NEC) is finally upon us, Qualita’s new UK retail lines – and Stockholm – are still set to wow visitors to stand 1-D40. But what has changed since we last caught up with Qualita’s founder and MD, Andrius Miničius?

What progress has the business made so far this year? 

January Furniture Fair was moved to April, which delayed the launch of our new Stockholm collection under the Winsor brand. However, instead of waiting for the show to happen in April, the agents took it upon themselves to hit the road and convince retailers to recommit to the range from Qualita.

We set up the display at the old Winsor warehouse and invited retailers to come and visit. Some of them did, and some asked the agents to bring them a sample bedside table so they could check the quality.

And while it was just a soft launch, the agents have done a fantastic job so far, and secured display orders from around 50 stores. The aim was to get around 80 stores at the NEC in January – so we are headed in the right direction, and we believe we will reach our goal at the April show. In general, the market has responded really well to Stockholm.

As for Laura Ashley cabinet furniture, the sales are strong with Next, and now John Lewis has made a selection and is launching a few ranges across the bedroom, as well as its dining and living departments. Laura Ashley bedroom at John Lewis Partnership will launch this month, whereas the dining and living ranges will launch in autumn/winter this year.

Other Qualita ranges with UK retailers have held their ground, and we envisage growing our distribution further at at the January Furniture Show this April.

What exactly are you bringing to the January Furniture Show – and has the selection changed at all based on recent developments/feedback?

The plans have not changed. Other than presenting the Stockholm range in the flesh – which we are sure most of the committed retailers will come to see, as most have bought their displays after seeing sample bedsides or just photography – we will also have a good selection of the other products that Qualita is best known for.

This will include dining tables with various legs in wood and metal, and cabinet furniture in oak and walnut in different finishes, as well as some new occasional products such as shelving units, and side, coffee, nest and console tables that we plan to stock and make available on a shorter lead time. We didn’t have this proposition at Qualita before, as most of the products were made to order.

Can you outline any new styles/colours/materials you think are going to prove popular this year? How are you responding to these demands?

Oak will continue to be the most popular solid wood in 2022. However, the price of solid oak and oak-veneered furniture may see a substantial rise, as the war in Ukraine and sanctions against Russia and Belarus mean that Europe will suffer a huge supply shortage and raw material cost will sour.

Ukraine is one of the largest oak suppliers into the EU. The country also exports ash, beech and birch, so costs for these timbers will also rise. On top of that, chipboard, MDF, plywood and other materials that are used in furniture production are also imported from Russia and Belarus, which, given current economic sanctions, will incur shortages and price hikes.

Prices for furniture will rise in general, but oak may see the highest jump. Black American walnut is also becoming a bit more popular in the UK, but its appeal is still quite limited in comparison to oak. We have seen a few more retailers starting to look back to pine and the resurrection of pine furniture, even if in a different distressed, brushed, washed and weathered look. Pine and spruce are materials that are more widely available, and given the growing cost of other hardwood timbers, it is likely that more companies will focus on creating new products and ranges in these cheaper woods.

Qualita sources and manufactures furniture from oak, ash, beech, birch and black American walnut, and has even started making some pine ranges for Laura Ashley. The company has strong ties with various suppliers, and we are sure we will be able to offer the market whatever the consumers demand.

What would you say to anyone planning to visit JFS and thinking of visiting your stand?

I would say it is a smart decision! I believe that we have been in the market for long enough – we supply many retailers with white-label products, we have exclusive licenses to supply products under the Laura Ashley brand, plus we now offer Winsor’s Stockholm collection. And we are working on bringing other brands into Qualita’s portfolio.

We not only have our own manufacturing facility, but we also buy products from various other suppliers in the EU and further afield. We have a well-structured business, guaranteeing stability and consistency. We have offices in Lithuania and the UK. We are working very closely with retailers in order to offer products that are demanded by consumers.

We work in many European markets and notice the trends, and are able to quickly introduce changes within our company. We strive to offer our retailers a good customer service and, given our current position and history in the market, I believe that anyone we have worked with can say that we’re a reliable partner – and this is what one needs in the current turbulent market.

Taking a step back from the show, how has your service offer evolved to meet current demand?

Qualita is known for supplying larger retailers with private-label products, as well as smaller independent shops with products on a MTO basis. For years we have also been making bespoke products to customers’ exact specifications, and have offered this service to shops, interior designers, architects and various contract customers.

However, at the end of 2021 we made a decision to completely stop manufacturing bespoke, one-off pieces. Signing up the license to manage Laura Ashley’s cabinet furniture portfolio, getting the license to make and supply Winsor’s Stockholm collection, as well as making a decision to introduce some products that would be stocked and delivered to retailers on a shorter lead time, meant that our manufacturing, engineering and admin capacity is going to be exhausted and leave no room to continue offering a completely bespoke service.

Can you tell us a bit more about your manufacturing operation in Lithuania? 

The factory in Lithuania was set up in 2003. It currently employs around 250 people. We make products from solid wood as well as all sorts of boards, and we finish in oil, lacquer and paints. The scope is large – we have all the machinery necessary to make any kind of cabinet furniture.

The factory operates what we call a zero-waste production. All timber offcuts are shredded and processed into briquettes that are used for heating the factory in the winter, and the surplus is sold to local households. All the materials we use come from sustainable sources, and we carry out annual ethical and technical audits in the factory that are performed by a certified third party, such as Bureau Veritas or another.

We also have a sister company that is called Industrial Robotics Company, which works alongside our manufacturing business and helps automate various repetitive processes. We have robots in the factory that produce cardboard boxes, robots that sand, spray, and also – working with a number of tools positioned around them such as routers, blades, drills and sanding belts – process small wooden parts.

We aim to automate as many processes as we can in order to offer our employees a better and safer working environment, grow their skillsets, make production more efficient and consistent, and allow employees to earn more while doing less manual work. Robotisation also ensures stability and helps with quality control.

As of early March, has the invasion of Ukraine affected how you do business? 

It has. As mentioned above, supply and the cost of raw materials is going to become a big issue in the next few months. We also have subcontractors in Poland who employ a lot of Ukrainians, and they have now left Poland to go back to Ukraine and fight. This will inevitably increase lead times and may raise prices, as the factories will need to cover their fixed overheads with less throughput.

Many Ukrainian citizens are going to seek refuge in Poland and Lithuania. We hope that some of them will find permanent residency in our countries and will add to the labour market, which is currently depleted.

It is next to impossible to find young people in our countries that are willing to do manual work in factories. Everyone wants to work in an office, use a computer or trade crypto currencies. An influx of manpower into our countries may actually benefit the manufacturing industry. We don’t need cheap labour, we need people who are willing to work.

Do you see demand for your product here in the UK changing much this year?

It is difficult to foresee. For the last two years, demand has been solid – and growing. Those supplying from the Far East faced issues with their supply chains, from manufacturing to logistics. Costs have increased everywhere, so many wholesalers and retail chains decided to look for products closer to home. This all stimulated demand and helped grow our business, while pushing the prices for raw materials and labour up, of course.

This year looked like it was no different – until the war broke out. It is very likely that costs will continue to rise and, depending on how the conflict progresses, it may actually encourage people to wait and see what is going to happen, how the situation is going to resolve.

On the other hand, suppliers of less expensive furniture, such as IKEA, JYSK, etc, who are more affected by the supply chain issues due to the war and sanctions, may suffer more from shortages of raw materials and could actually be out of stock more often – which, in turn, may stimulate the growth of sales in the mid- to higher-end category.

It is a big unknown at the moment, but, as always, when the markets are turbulent, there are companies that deal with the issues better than others, and losses for some are opportunities for others. Qualita has weathered all the difficulties relatively well so far, and each crisis proved to be a big opportunity for growth. We hope that this year will prove no different.

Finally, what else is in the pipeline for 2022?

Growing our manufacturing capacity by way of acquisition is definitely on the radar. We are considering various options in Lithuania and abroad. We are also keen to find opportunities among various wholesalers and do more deals that are similar to our licensing agreements with Laura Ashley and Winsor.

We are currently working on a licensing deal with a very prominent brand in London. While they don’t have a furniture category at the moment, they are a well-known name that could do well with a selection of products distributed across the right type of retailers.

We are also keen to partner with or acquire businesses that fall in line with what we do and which could help Qualita grow by offering more products to our existing customers, or help us open more retail doors with products that we have not got in our portfolio at the moment.

We see the next five years as having serious growth potential for Qualita, and we will be actively looking for opportunities in the market.