Top 25 list's stability provides ray of hope
Jay McIntosh, News editor -- Furniture Today, May 11, 2009
We'll present our annual look at the Top 25 Sources for the U.S. Furniture Market next week, and the picture won't be a pretty one.
Our market research department is still compiling the figures, but it looks like for the companies that wind up on the list, the median change in U.S. sales from 2007 to 2008 will be a decline of 10% to 15%. Only about four of the Top 25 had increases.
One thing that strikes me about the list is how stable it has been. Sure, companies rise and fall in the rankings, but nearly all of the big players that were on the 2008 list are still among the leaders in our business. The only one we know will drop off is DeCoro, the upholstered leather furniture maker that closed its big China manufacturing operation after suffering sales declines. It had lost some big retail customers, including Levitz and Wickes.
Maybe the stability of the Top 25 is a sign of how our industry can weather the bad times, at least up to a point. Double-digit sales declines could quickly sink a company that can't adapt to such a wrenching change by adjusting the size of its operations or otherwise cutting expenses.
I guess that's one of the benefits of not having a unionized labor force — it's easier to downsize quickly if necessary, and companies are probably less likely to be saddled with ongoing costs like pensions or retiree health benefits.
Also, the up-and-down nature of the business has given many of our leaders the skills and fortitude to get through a tough period, with the confidence that it won't always be this bad.
Listen to the comments of Ashley Furniture's Ron Wanek at a High Point Market roundtable hosted by our editor-in-chief, Ray Allegrezza. He recalled the days of 20%-plus lending rates and 12% unemployment in the late '70s and early '80s, and said the economic climate was worse then than what we're going through now. “This is not the toughest time I've seen in my business career,” he said.
Nobody broke out singing “The Sun'll Come Out Tomorrow,” but there was some optimism. Sealy President CEO Larry Rogers said he thought the industry would emerge from the crisis in a “new place,” where sales may be lower but will not be artificially inflated by credit that was too easy to get.
To read a story on the roundtable or listen to a podcast, go to furnituretoday.com and search for “roundtable.” It has plenty of other comments from some of the industry's top executives on how they're dealing with today's economy.
