Ragazzi shuts down Canadian production

Quebec-based infant and youth furniture manufacturer Ragazzi stopped its domestic manufacturing operations to focus on its importing activities on May 1, citing "today's economic realities" in a letter sent to dealers from company president Armando Dinucci.

The company, corporately owned by D&F Furniture/Les Meubles D&F, said in the letter it would fulfill all outstanding orders received by May 12 for authorized dealers under the conditions that the retailer would pay in full any outstanding accounts; pre-pay for the shipment, which would be discounted 20%; and make all payments by wire transfer.

The 34-year-old company is among one of the largest youth manufacturers of high-end furniture and a top vendor for many independent retailers. It is unclear whether Ragazzi plans to become an import-only company or shutter operations completely, though it did recently form a subsidiary company, Bambino Reale, which imports furniture from Chile.

Mitchell and Jerry Schwartz, who handled the design and distribution side of the business, were unaware of the decision.

"We have always been loyal to our retailers and we feel terrible about this," Mitchell Schwartz said. "It was a corporate decision and it will hurt a lot of retailers. It's a sad day for retailers and for the industry."

Mark Lazar of Lazar's Juvenile Furniture in Lincolnwood, Ill., said that though he had "no inkling" this was coming, Ragazzi was facing many obstacles. The increasing strength of the Canadian dollar made Ragazzi's product more expensive in the U.S., it has been competing with offshore manufacturers, and "since 2000 business has been weird and a lot of retailers haven't been paying their bills."

Ragazzi's news obviously will affect each retailer differently, but Lazar said there's also a bigger issue to consider.

"Ragazzi changed the industry when it entered the market," he said. "Yes, they had a quality, high-end product made domestically, but what really changed things was that with Ragazzi you didn't have to stock merchandise."

Retailers carried floor samples and Ragazzi promised delivery in four weeks; this, Lazar said, changed the way business was done.

"They changed the industry coming in and going out," he said. "There are less than a handful of domestic manufacturers left that offer the breadth of product (nursery and youth) in such an extensive selection."

Lazar still orders from the company daily and said he's always had a good working relationship with the Schwartzes.

Ken Goore of Goore's in Sacramento, Calif., said Ragazzi's decision has had little impact on his business.

"We're big enough that it hasn't impacted us at all," he said. "Though I'm sorry to see the company fold, we made plans immediately to cover ourselves."

Other retailers weren't so lucky.

Dave Laub of Room to Grow in Cincinnati, Ohio, said though he's a member of Ragazzi's million dollar club, he found out about the closing after three sales representatives from other manufacturers called him.

"Ragazzi was a major manufacturer for us," Laub said. "The effects are more long term for us though because our customers bought the line thinking they could come back for additional pieces as they needed them."

Laub floored seven cribs, one bunk and five twin beds in his store. His hope is that his customers will understand the issue is with the manufacturer, not Room to Grow.

"I think the closing was handled poorly," he said. "We didn't have a chance to work with our customers and transition them to another product."

Calls made to Dinucci were not returned.