Originally created 04/24/98

Furniture industry hopeful as spring market opens

HIGH POINT, N.C. -- Just how much better is business for the beleaguered furniture industry, which has been in the doldrums for years despite high consumer confidence and single-digit interest rates?

Ask Jean Devault of Canadel Furniture, a privately-held firm from Montreal that specializes in dining room furniture. It's been one of the hardest-hit sectors of the industry.

"It's going great," Devault said at the company's High Point showroom on opening day of the world's biggest furniture trade show Thursday. "Business is up 23 percent. What else can I say?"

Asked for his company's trade secret, he said: "You need to think about the consumer and give them what they need. The answer is always, `Yes, yes, yes."' His remarks were the norm rather than the exception as the International Home Furnishings Market began its 10-day spring run.

"There are good times here," said industry analyst Jerry Epperson, who recently revised his 1998 industry forecasts upward from a 5 percent growth rate to 7 percent. "You're going to see people smiling here who, honest to God, almost forgot how."

Epperson, who follows furniture for Mann, Armistead & Epperson in Richmond, Va., said sales improved in markets across the U.S. in the last quarter of 1997 and continue to gain momentum.

"The furniture industry is probably as healthy as it's ever been, but perhaps it's also as good as it's ever going to be," he said.

According to the American Furniture Manufacturers Association, shipments from U.S. companies are up 14 percent through February. AFMA economist Joe Logan is calling for an increase of 6.6 percent to $22.6 billion in 1998.

Epperson is projecting $21 billion in sales, which is about $2 billion more than last year's shipments.

Richard Barentine of the Home Furnishings Marketing Association said the sunny outlook pervades the entire industry.

"I don't think it's hype, either," said Barentine, whose organization sponsors the trade show. "I think it's real."

Epperson pointed to economic trends such as high consumer confidence, strong housing starts and stable interest rates. Reminded that those trends were much the same six months ago -- when the industry was staggering -- he said the change came from the consumers, not the industry.

"If anything, the economy is getting a little weaker," Epperson said. "People already bought their cars and their computers and they ran out of anything else to spend money on. It might as well be furniture."

Epperson said one sure sign of optimism from the manufacturers was the smaller number of introductions at the trade show.

"When business is good, they cut back to the things they do best," he said. "We also will see price increases of about 3 percent this market. They want to sell merchandise with higher margins."

Dealers were hopeful the previously flat furniture market was starting to show a heartbeat again.

"I think it's a little more upbeat," said buyer Paul King, who has owned King's Furniture in Beverly, Ohio, for 39 years. "The place was really humming yesterday afternoon."

King, who comes to High Point every year, said, "This is where it's at. You can find anything you want here."

The trade show, which runs through May 1, draws about 70,000 people from all 50 states and more than 90 foreign countries. Buyers can choose from more than 2,300 exhibitors that fill more than 7 million square feet of showroom space in High Point and nearby Thomasville.

The furniture market pumps more than $236 million annually into the area's economy.

The last time they gathered here for the market's fall run, many furniture executives were puzzled that consumers were staying away from furniture stores.

That brought doubt to the heart of furniture country, where about 75,000 people work at 600 different plants. Many of the nation's biggest companies are located within a four-hour drive of High Point.

Not everyone shares the optimism about furniture's fortunes.

"We are by no means back to the days of wine and roses," said Britt Beemer, chairman of America's Research Group, a retail research firm based in Charleston, S.C.

Still, he said, sales will be stronger this year than they were in 1997.

Beemer said one of the biggest problems facing the retail side of the business is service.

"Consumers ask themselves as they drive by a furniture store whether it's worth their time to go in, whether the store lives up to its advertised image," he said. Some potential shoppers never go inside a store because they are unimpressed with the store's exterior, he said.

For the ones who venture inside the doors, some are greeted with inferior service and products.

"Dirty stores, gaps in product displays, missing hardware on furniture and incomplete groupings send the signal to potential customers that the store might not be there next week," Beemer said.


Trending this week:


© 2018. All Rights Reserved.    | Contact Us