By Warren Shoulberg
Reports of the death of the furniture business are premature, but as the industry gathers here for next month’s Las Vegas Market, there remains no shortage of concerns about its overall health.
While there are some encouraging signs that the worst is over and that a recovery, modest as it is, has started, the furniture business remains acutely keyed in to the housing market which continues to sputter along. Estimates are that anywhere between 10 and 20 percent of all furniture sales are tied in someway to a housing-related activity. The industry knows that until housing regains some momentum furniture will remain a troubled sector.
“Let’s get the bad news out of the way,” wrote Jerry Epperson of Mann, Armistead and Epperson and the industry’s leading guru. “We had some hope that the worst was behind us in terms of furniture sales but June was the worst month yet.”
He does put that into perspective, noting “June and July are historically the weakest two months seasonally for our industry.”
Epperson said a major concern is the overall mood of the industry. “Not only are consumers not buying furniture, we sense the entire industry is discouraged and disgusted with the entire process,” he wrote in his monthly newsletter.
However, the signs that the worst may in fact be over would seem to indicate that the timing of the September show here could be advantageous as dealers start to see some business returning to their stores.
“We think Vegas will be OK,” said Phil Haney, president of Lexington Home Brands, which was one of the first higher end brands to open a showroom here in February 2008. “We see that the international and designer registration is up and it looks like attendance from regular dealers should be even.”
While conceding that the first half of the year was “disappointing,” he said that there were signs in the first part of June and the latter portion of July of a little uptick in business.
Haney remains convinced that the best way to drive business is with new product, so Lexington will have one major new introduction plus will show two collections from the April High Point Market that will have their regional debuts.
“Our contention is that new product drives business,” he said noting the introduction of San Tropez, plus the first Western showing of Black Ice and Island Estates, the new Tommy Bahama group from April.
Lexington does not premarket in High Point so the overlapping of the Las Vegas show with that event this year is of no concern to Haney. He was not in favor of the shift in the Vegas date from July to September, but he was hopeful that it would all work out right for the industry.
Lexington does work with its dealers to get their input on new product, but it happens much further in advance. “We don’t think you can effectively do it (make changes based on premarket) 30 days before market. We do it nine months ahead of market.”
One interesting newcomer to the World Market Center’s Las Vegas Design Center this time around is the debut of an Ethan Allen Design Center, the first time the retailer has opened a store in a wholesale showroom facility.
The 10,000-square-foot space will be used during market times as a showroom for perspective licensees but the rest of the year will be open to the general public and designers.
“This gives Ethan Allen a unique opportunity to be part of a design-focused destination that fits perfectly with our business model,” said Farooq Kathwari, chairman and CEO of the company. The new space will also give Ethan Allen “the ability to offer our clients in the Las Vegas area design expertise and a diverse and eclectic range of home furnishings,” he added.
Robert Maricich, president and CEO of the World Market Center pointed to the Ethan Allen move as a big plus for the complex, “Our business platform is much more than just a furniture market or traditional design center.”
While these are all encouraging signs for the Las Vegas market, the success of the show will ultimately come down to the question of whether the consumer is ready to start buying furniture again.
Epperson said the timing could be right. Business, he said, “historically has turned up in mid-August and we hope the same holds true this year.”
