Saint-Georges, Quebec, Canada — Victor Group said will begin a structured withdrawal from the residential fabric market, with a gradual phase out of their Residential Business Unit taking place over the next two quarters and termination by end of first quarter, 2014.

The company continues to experience growth in its Contract Business Unit, and plans to invest additional capital and resources in further expanding in this area for the future, Duval said. 

“This was a difficult decision because we have invested much time, effort, resources, and capital into this business unit but the reality is that this business is simply not sustainable in the future. This decision will allow us to focus on market segments that align more closely with our core competencies and long term strategic plans,” said Alain Duval, President and CEO of Victor Group.  

Since Victor’s entry into the residential fabric market in 2007, It has worked to establish a position of leadership in design and service in this arena, Duval said.  Despite these efforts, this has proven to be a challenge due to several major factors that have negatively influenced its residential business unit, he said. First, the complexity of the product mix required to satisfy the market needs put a strain on both their operations and their supply chain. More significantly, the landscape of the residential furniture market has changed significantly with less demand for the more traditional, mid to high-end fabrics that they produce, as well as a shrinking customer base for these type products.

As a result of these influences, Duval said that Victor simply has not experienced the growth and return on their investment that had been projected.  Therefore, the decision has been made to phase out of this market, with operations for this business unit ceasing by the end of the first quarter of 2014.