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Ladies and Gentlemen,
While we are busy preparing for the High Point market, I wanted to update you on where we stand relative to tariffs and the expected inflation in our industry. The fluid situation feels a bit like Covid 2.0 unfortunately, in that we expect some turbulence and uncertainty ahead in our industry.
Please know that we are well prepared for the challenges. We are as well-grounded and financially sound as any company in the industry. In addition, our inventory position is solid in all three distribution centers – VA, TX, CA. Our supply chain is also very diverse in that we manufacture our products in Indonesia, Vietnam, China, India, Malaysia, Cambodia, Portugal, and here in the US. We will start working in Mexico again like we did in the past, and continue to bring production back to the US where we can be competitive.
We are hoping the tariff situation is resolved quickly, but we’re operating under the assumption that it won’t be. The new baseline tariff of 10% applies to all imported products and components, plus we have the global steel and aluminum tariff of 25%. For China, we have total tariffs of 145%, making production out of China mostly not affordable. Even on domestic production, some components like swivels, brass knobs, and fabrics are sometimes manufactured in China, and subject to the 145% tariff.
Given all of these tariff increases, we will have a price increase in May. We also expect our fill rate to drop off by summer, from our current 91% rate. Please know that we are doing all we can to avoid out-of-stocks, but we cannot proceed with business as usual on 145% tariff items.
We are very excited to debut Uttermost Outdoor at this upcoming High Point market. This collection is manufactured almost 100% in Indonesia, Vietnam, India, and the US. There are just a few small pieces made in China.
The weeks and months ahead will be challenging for all, but please know that we are totally focused on supporting your business with great product, and keeping our values as strong as possible.
Thank you for your loyalty and your business. We hope to see you in High Point to help celebrate 50 years in business, and the debut of Uttermost Outdoor!
Sincerely,
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