Toronto: Solid 1st half
Retailers, consumers likely to remain cautious
By Michael J. Knell -- Furniture Today, January 23, 2005
Toronto — Exhibitors at last week's furniture market here are confident business will continue to be solid in the first half, although gains will be incremental as both retailers and consumers remain cautious.
While product remained front and center, executives said the real business of market was developing strategies to assist retailers find new profit opportunities in an environment marked by price deflation and the uncertainties stemming from a strong Canadian dollar.
"The consumer is buying more furniture than ever before," said Jeff Casselman, president and CEO of full-line producer Shermag. "There are tremendous business opportunities out there.
"The issue is: How do we make money? How do we restructure to make ourselves profitable?"
Manufacturers said virtually every buyer was prepared to write business, but perceptions of attendance varied considerably. Most also said that buyers appeared to be holding back, refusing to commit their entire open-to-buy even though inventories generally were in good shape.
Although there were plenty of show specials, many exhibitors de-emphasized them. Instead, they offered programs that allow retailers to earn turns and margin dollars year-round, not fodder for midnight-madness sales.
"We showed fewer specials than ever and focused on programs, whether it's in microfiber, fabric or leather," said Art DeFehr, president and CEO of Palliser Furniture. "If it's well priced, people showed a lot of interest, and there was a lot of enthusiasm for programs that will last all year."
Ron Dennis, vice president of marketing for Simmons Canada, said, "Dealers were looking to us for ideas and promotions. They were largely focused on getting their product lineups in place for 2005. They want service and delivery, and they don't want to carry inventory.
"The fact that we service what we sell ... is what sets us apart," Dennis said. "Our challenge is not to let costs get out of control."
"The traffic was very good," said Claude Dion, vice president of sales for South Shore Inds. "Sales and orders were very good, and retailers were buying a lot of new product from the regular core lineup. They also seemed to be in a good mood. Inventories seemed to be low and they were ready not only to buy but to undertake new projects to create new business."
While it has been a strong undercurrent for several years, the divide between North American producers and importers/distributors has never been as great as it was at this market.
"Even though the China factor was very evident, it was a good, solid market for us," said Laurie Horne, director of operations for Springwall Sleep Products. "Retailers are happy with lineups which have higher price points and better values. We see Springwall as a place of choices — we've got an assortment of product that the retailer can present to the consumer with confidence."
Robert Vlessing, president of leather upholstery maker Coja Leatherline, said, "People are buying domestic programs because they need to be able to customize the product. They also need a balance between what they're importing and what's on the rest of their floors. The consumer and the retailer are both looking for better goods and better values."
Gerry Themens, director of marketing for Berkline Canada, said, "We had the right product at the right price, with a number of covers that simply wowed the dealers. We opened a lot of new accounts and increased our placements with most existing accounts."
North American producers that don't specialize in custom orders or just-in-time systems weren't as satisfied with the market as they have been in prior years.
"The traffic was slow at this show," said Karim Kurji, vice president of sales for Dynamic Furniture. "We're dedicated mostly to the truckload buyer, and the value of the dollar isn't helping us."
Importers said price always will have a place in the market.
"This was the best market we've had since we began showing here," said Al-Karim Chatur, president of Eztia, the Mississauga, Ontario-based importer. "The response was excellent and the reason is bottom-line pricing. We're offering similar values at 30% to 40% less."
He said the challenge is to attach low-price tags to something interesting the consumer will buy. "Our strength is to offer product that's unique," Chatur said. "We have to help the retailer increase his margins."
Jean François Michaud, president and CEO of the Quebec Furniture Manufacturers Assn., which owns and operates the Toronto market, said the association will look for ways to continuously improve the market.
"We want to maintain the quality of exhibitors," he said. "And we also want to attract more foreign buyers."
Many retailers and manufacturers were buzzing about the first Las Vegas market, scheduled for July.
"While we don't know what the impact will be, we have a strategy that will ensure that we differentiate ourselves from whatever they do," Michaud said. "Our focus is on adding value to this show, and we are looking at a number of projects to do exactly that."
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