High Point, NC, October 24, 2005--Furniture and craft makers at a big trade show this week were cautiously optimistic that their industry can weather uncertain times as higher energy costs and rising interest rates threaten to constrain consumer spending on big-ticket items.
The International Home Furnishings Market, held twice a year in High Point, North Carolina, is an indicator of what may be in store months from now for home furnishings sales since retailers from all over the world arrive to order products for their stores.
"The mood of the market is sanguine," said Robert A. Levin, president of Clay Metal & Stone, a Fort Lauderdale, Florida designer and importer of decorative home crafts. "There are a lot of challenges centered around higher prices due to raw materials going up, and gasoline prices that might limit consumer purchases."
Many attendees said traffic appears lighter at the weeklong October show, which ends on Wednesday. Retailers in the U.S. Gulf states likely stayed away because of damage from recent hurricanes. Others speculated that a new furnishings show in Las Vegas over the summer might have also pulled traffic away from the High Point event.
"My sense is we've seen less people than we certainly would have seen in April or last October," said Paul Toms Jr., chairman and chief executive of Hooker Furniture Corp. (HOFT.O: Quote, Profile, Research) . "But on the positive side, almost everybody we've seen has been pretty willing to commit to our new products and anxious to spruce up their floors."
Retailers at the show are thinking hard about the furniture offerings and not taking a chance on items that may pique consumer interest but not sell well.
"Buyers are not being frivolous anymore," said Saverio Mancina, public relations director for upholstery maker Rowe Furniture, a unit of Rowe Cos. "They're looking for things that they know will retail."
Hurricane-related shortages of materials and a slide in consumer confidence have caused financial woes at some of the best known U.S. furniture makers and cast a pall over an industry already battered by competition from cheaper Asian imports.
Recently, La-Z-Boy Inc and Stanley Furniture Co. pared their sales and profit outlooks, citing uncertainty about consumer spending.
"We're in a soft spot," Stanley Furniture chief executive Jeff Scheffer said. "The question right now is, is it short-lived or for an extended period of time. That's what we don't know."
Levin, the crafts entrepreneur, said companies can weather the tough economic times by aiding sellers of their products. About four years ago, his company started a division to help retailers shave costs by importing accessories directly to their facilities, he said.
"I don't think these challenges are going to stop," Levin said. "You have to stay optimistic, but you have to be innovative, and come up with ways to help retailers."
Hooker Furniture said it is partnering with its major retailers to send direct mail to consumers in hopes of luring them into stores and coming up with ideas to improve store displays.
"More and more now, we've got to try to connect with the consumer and help pull demand through the stores, to educate a consumer on our Web site or through other means on what's available so that when they go to the store, they are kind of pre-sold," said Toms, Hooker Furniture's CEO.
Despite the challenging economic picture, many were optimistic that business will eventually turn around.
"People will still buy furniture if we are able to offer the right product at the right price," said Amy Ng, owner of Goshen Collections, an Atlanta furniture wholesaler.
