SHANGHAI, PRC — China has property problems due to a real estate meltdown according to Ricky Lu, owner of Beijing Euroart Co. here, a 15-year-old retailer to the interior designer and distributor to 200 other strong wholesalers in major Chinese cities, he says. Euroart is considered to be one of the top wholesalers of upper end lines in China today with many of the top Western editeur brands in Lu’s three showrooms including 500 square meters in Beijing, his headquarters, and 300 square meters in the Wending Road showroom district in Shanghai. “We work on our relationship with interior designers and we participate in the Andrew Martin Interior Design Awards for China.” Lu promotes Chinese Design Masters to meet with designers in London. “We help to build attention for Chinese designers in Europe; helping them helps us!” He is a big believer in introducing the interior designers to his 200 retailers in major Chinese cities. “Chinese people accept the idea of working with interior designers." He estimates there are 10 million interior designers working in China and he has plenty of room to grow his sales to that market, he says. Euroart is in the $5-$10 million sales range, he admits without naming a specific figure. He sees his mission to build links between his retail partners in China and the designers he serves. “We’re building our relationship with these 200 customers,” Lu maintains. “We give presentations and free training in the products we carry. We haven’t increased prices even though prices are up five percent,” he says. “If your business is flat in 2015, consider yourself doing well. We cannot increase prices right now.” Lu also points out that other Asian countries are starting to compete with China. “All Asian countries are offering cheap labor and good quality. Vietnam is producing furniture for the Chinese now with ‘imported’ furniture nameplates and cheap fabrics on the frame. As a result, better design is more important in China than ever before in order to compete with the Asian onslaught.” Many Chinese fabric manufacturers as well as Euroart have been focusing on selling to the local Chinese market with export getting a little less attention than in the past years. Shrinking demand has hurt export but now the domestic market is also starting to suffer in China. Many companies, which just produced fabric before, are offering complete home packages with fabric, furniture and accessories. (See companion story about Tuscon Wood Products and Babei Fabrics.) “You can’t buy more than two apartments in China using bank loans to finance them. Beyond two, you need to buy with cash. The apartment boom has slowed down to a trickle he says and this has affected the overall fabric business in China. “The demands of the Chinese market are shrinking as a result, Lu admits. “There is no middle class in China and it will develop very slowly in the future; people are very rich or on the bottom. There is nothing in between and it will take time for it to develop,” he says. “US designs sell very well here. The Chinese designers like the American design,” he says. “Many of the brands we carry compete for the same customer.” (On a side note, Swavelle was one of the few American brands showing at Intertextile this year, its seventh year at this show. Swavelle certainly offers American design but many of the products are made in China.) The Chinese want the American design but it isn’t essential the products are made in the USA, suppliers say. His lines include Kravet, Romo, Andrew Martin, Alhambra Group and Kobe. His lines are geared as follows: Kobe-mass market; Villa Nova-middle market; Romo-slightly higher than Villa Nova and Zinc at the highest level. “We have the candy store for the Chinese market when it comes to fabrics,” he laughs while interviewed in his Wending Road showroom in Shanghai. “All of the Kravet brands—at least 20 of them sell very well including Couture at the very top which is very competitive,” he points out. He is an avid shopper at Maison Objet, Deco-Off and Decorex, he says. “Deco-Off is now the key French show for the designer,” he feels. Lu is also Vice Chairman of the Shenzhen Textile Fair held in March where he releases his new lines to the domestic China market. He does not think that Shanghai Intertextile is the place for him to introduce his lines in September and wonders why JAB and Tricia Guild take a stand there. He thinks the timing is better in March to reach the China based interior designer. When you walk into the Euroart, you see 3-meter samples and small memo swatches. “We buy 100 new designs each year for display in our Beijing and Shanghai showrooms,” he says. “My primary business is residential and I don’t bother with contract. Contract/Hospitality is a relationship business and the fabric is secondary. It is a waste of time for us and I am not interested. I like selling original fabrics—not copies.”