By Nancy Meyer
DALLAS–Buyers combing the Dallas Market for new products found just a handful of introductions, perhaps due to the anticipated lack of audience, but also because January releases are still just trickling in from China, where the majority of lighting is produced.
The troubles facing importers—factories in China shutting down with little or no notice; skyrocketing costs and shortages of materials, workers and containers to ship the goods; and currency devaluation—were the talk of the market.
The buyers trolling the aisles were intent on finding glimpses of creativity, although some are still not in a position to absorb much newness, they said.
Jack Fleischer, principal of Hermitage Lighting Gallery, said that while he’s seen a drop-off in core lighting sales, he’s doing more business at the high end, particularly with oversize furniture pieces from Maitland-Smith and others, which has led him to put in a Waterford Lighting assortment.
“I’m looking at how I can raise the level of what we do,” Fleischer said. He’s also continuing with the RMSA program that has improved his inventory position and buying discipline.
Retailers also worked with vendors on promotional packages, marketing and advertising, as well as co-sponsored events to draw traffic.
Elements, a Long Island, N.Y., showroom, has recently begun running TV ads and hosted its first designer event with more than 100 design firms attending the evening seminar, reception and product preview, said Brian Kleinberg, principal. Joan Kleinberg, his business partner and mother, said it’s crucial to invest in the business now, and that so far the approach is paying off in new business.
Similarly, Connecticut Lighting Principal David Director said that rather than cut back during this slow economy, he’s investing in his long-term employees with pay increases and incentives to retain them. When business picks up, they’ll make the difference for the company, Director said.
The Internet business is one bright spot and e-tailers were numerous this market, seeking the best-selling styles from manufacturers who are set up to service the business properly. Going forward, vendors are banking on e-commerce, as consumers are shopping more frequently online to save gasoline. In response to this, many vendors changed their minimum-advertised-pricing policies to a higher mark-up (to 2.0 from 1.8 in most cases).
International buyers were also prevalent at this market, thanks to major initiatives by the Dallas Market Center.
“I’ve written double the business with international customers than domestic accounts in the past 48 hours,” Martin Shepherd, national sales manager for Minka Aire, said during market.
Nova Lighting, which entered the Dallas Market with a corner spot on the 10th floor of the World Trade Center, also saw a lot of international buyers, said Daniel Edelist, chief executive officer.
Another new exhibitor, Eglo, an Austrian company that imports contemporary lighting from China, showed off its expansive, neatly vignetted showroom in the Trade Mart expansion, in the former showroom of Jeremiah. Jeremiah took the space left vacant by Catalina Lighting, which exited DMC last year.
In terms of product, Elk and Landmark Lighting together had 250 new SKUs, including Trump and Mary-Kate and Ashley lighting; Corbett added to its retro design series and Troy unveiled new outdoor fixtures. At Framburg, a translucent metallic silver River North group was very different, while new Murano glass swirl designs and more elegant embedded-crystal fixtures were also shown. Kenroy Home, which is less than four months under new ownership, stepped out with more than 200 new products, a new catalog supplement and Web site, aiming to return to its showroom roots. And Kichler brought out several very contemporary, edgy designs.
“We’re taking a greater risk with designs, giving customers something unpredictable from Kichler,” said Tony Davidson, company president.
While traffic count was low this market, company principals stressed opportunities that come with hard work.
“I’m not hearing doom and gloom,” said Jane Kieke, owner of the Taylors on Ten showroom. Her sales agents, while in the field, have been shocked at how few representatives are calling on customers. But Kieke maintains that representatives should still be in front of customers, whether or not they’re ordering.
One LiteSource representative was able to help a West Coast showroom with co-op advertising dollars to run ads on competitors’ products and was rewarded with a handsome order once that retailer flushed through the inventory, according to Joel Kent, LiteSource marketing and sales director.
“We need to do whatever we can to help retailers get through this,” Kent said.
Meanwhile, price increases were another reality at this market, as some lighting companies passed along the second or third price gain within a year. Increases ranged from 3 percent on the low end to 40 percent on the most costly items, depending on material and design, vendors said.
“It’s the reality of today’s business,” one lighting showroom owner said. “We understand it and pass it along to the consumer.”
The price adjustments come after nearly a decade of extreme deflation that has kept goods at what might be termed unnaturally low price levels, several executives said.
With such strong economic pressures, many companies are making major cut-backs and explained them to customers this market.
Generation Brands continues to find ways to take costs out of the business: It is folding Murray Feiss’ accounting, credit and information technology departments into Sea Gull Lighting’s Riverside, N.J., facility; closing Feiss’ Bronx, N.Y., distribution center and shipping from Sea Gull’s Burlington, N.J. hub; and reducing sales representative commissions from 10 percent to 8 percent, explained Tracy Bilbrough, chief executive officer.
Similar cuts are happening at other vendors. Thomas Lighting is closing its Louisville, Ky., headquarters and moving to its existing Elgin, Ill., facility, combining functions with other Genlyte Brands, while Genlyte’s corporate offices are moving to new parent company Philips’ facility.
While industry players continue to predict a major shakeout, it’s been slow to come. On the retail side, Signature Lighting and Fan Shack were the latest casualties, while on the supply side, Concord Fan exited. Leaving the Dallas Market Center after this market will be Westinghouse Lighting and John-Richard’s Alexander John Collection, officials said.
Industry conferences are also feeling the cutbacks, but American Lighting Association Conference coordinator Beth Bentley said she was hopeful to register 500 for the September event, as retail guru Paco Underhill will be giving the keynote address and a subsequent workshop. Sharon Davis, executive director of the Accessories Resource Team, was also promoting ART Conference 2008, to be held in August in Charleston, N.C.