Let's all discuss some basic issues
By Carole Sloan -- Furniture Today, October 14, 2001
In the face of the global uncertainty that hovers over this market and all business activities, some critical issues must be reckoned with in furnitureland.
The ability to survive and thrive is the basic issue both retailers and manufacturers must address in the coming months. In the past decade, things were purring along so well that some business basics were ignored, or at least put at the bottom of the pile of things to watch and do.
For 10 years or so, manufacturers at all levels saw opportunities to expand and made major investments in facilities and equipment, mostly for expansion's sake rather than to make existing facilities more efficient.
This, of course, took place with few noticing what now has become very obvious — the enormous growth of furniture making offshore. That turned a number of domestic facilities into dinosaurs, and many of those already have become extinct.
Then there's the phenomenon of retailers and manufacturers vying for the same offshore producer's output, which again puts pressure on domestic facilities in terms of productivity and profit.
On the retail side, we saw a decade of unbelievable store proliferation. And stores got bigger and bigger, often with little or no consideration as to whether the market could support another massive store, who the competition was or could be, and whether the store would be viable in the long run.
Then there were the home-town retailers who expanded outside their core area while keeping existing management in control. One problem: systems that were not updated for multistore operations. Another problem: the ego-driven need to dominate without regard for the logistical necessities required to run today's businesses.
These are issues that need discussion this week, as much as the world situation, the economy and product.
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