Buyers bring optimism to Toronto
By Michael J. Knell -- Furniture Today, January 4, 2010
In this story:
Buying groups a key
Growing optimism
TORONTO — Like their supplier partners, independent furniture retailers are feeling reasonably chipper heading into this weekend's Canadian Home Furnishings Market.
This optimism is being partly fueled by experts in the financial sector who are claiming that the recession in Canada is over. For example, BMO Capital Markets forecasts that overall Canadian gross domestic product will grow 4.9% in 2010 after falling 4.2% in 2009. This would put the Canadian economy slightly ahead of where it was at the end of 2008.
Furthermore, the bank forecasts a 3.2% uptick in durable consumer spending for 2010 — the category which includes furniture and mattresses — essentially making up for the losses incurred in 2009.
However, one major hurdle still stands in the way of recovery — unemployment. In November, Canada's unemployment rate was 8.6% and no one is forecasting significant improvement in the near future.
Buying groups a key
Although the Quebec Furniture Manufacturers Assn. no longer publishes attendance figures, it's no secret that retailer attendance at TCHFM has been falling off in recent years, driven by two factors: increased competition from other markets, particularly Las Vegas, which has become a draw for independent retailers in Western Canada; and the erosion in the ranks of the Canadian furniture retailing community.
Perhaps more so than at any market in recent years, it's the buying groups that are going to drive business here.
Taken together, Cantrex, Home, Mega and the Dufresne Retail Solutions Group represent about 1,200 of the most important independent retailers in Canada — an estimated 40% of the existing furniture storefronts.
Each of these groups has placed a renewed emphasis on the Toronto market this year, holding a number of important merchandising and marketing meetings as well as social functions for members.
These four organizations also control about 25% of the Canadian market for furniture and mattresses.
Also expected to be found in the halls of the market's International Centre are the buyers for the major national chains — mainly The Brick, BMTC Group, Leon's and Sears Canada — as well as their franchisees. Together, these companies represent at least half of the Canadian retail market for furniture and mattresses.
When the many other important players that attend — retailers such as Lastman's Bad Boy, Dufresne Furniture & Appliances and Tepperman's Furniture — are added to the mix, the market's impact on life at retail becomes even more apparent.
Once retailers hit the show floor, their outlook for business in their own areas is going to dictate their activities.
For example, Andrew Tepperman, president of the four-unit Tepperman's, based in Windsor, Ontario, noted that his region was decimated in 2009 — due mainly to upheavals in the auto manufacturing sector.
“For most of the year, London and Windsor have been suffering high unemployment rates and the highest rates of consumer bankruptcies in Canada,” he said. “We've never seen anything like it before.”
Tight internal controls and a willingness to advertise aggressively kept the family owned retailer in the game throughout 2009. Tepperman is taking a cautious, though optimistic approach to the coming year as well as his buying at market.
Indeed, the independent retailers may have comparatively more room to maneuver on the show floor than the publicly held majors.
“Overall, our members were satisfied with the results in 2009 given the economic conditions,” said Steve Braniff, general manager of the Dufresne Retail Solutions Group. “We certainly outpaced the larger retailers whose results are public.
“Our members managed their inventories and expenses extremely well, and while traffic was down at the store level, our sales per (customer) increased.”
Earle Laird, Cantrex's regional director for furniture and appliances in Ontario and Atlantic Canada, said that while 2009 was a challenging year for his members, their attitudes are becoming more positive with the recent upticks in the Canadian housing market.
“I believe that they will be coming to market with a larger open-to-buy for early 2010 than in 2009,” he said.
He added that Cantrex expects growth “will be slow in the first quarter but will gain momentum as the year progresses.”
Growing optimism
Mega Group members also rode out 2009's economic storm, paying careful attention to inventory control and buying only what was needed — when it was needed.
“This upcoming market should be reasonably good and probably better in terms of buying than last year,” said Mic Lafreniere, vice president of member services for Mega Group.
“In the last quarter of 2008, there were some dramatic declines at retail that certainly impacted the show last year. We're not seeing that trend this year, so our view is optimistic.”
Most independent retailers in Canada estimate that 70% of the merchandise on their floors is sourced from the base of manufacturers and distributors that participate in TCHFM every year.
In some categories, that figure is even higher. In upholstery, for example, it's not unheard of for TCHFM exhibitors to account for 80% or more of a typical retail store. For mattresses, it's 100%.
For many Canadian manufacturers, TCHFM is the only market in which they show — making this the one occasion retailers have to see the depth and breadth of their lines.
“It's still imperative that we go to Toronto, since that's where most of our Canadian suppliers show,” said Don Jordon, owner of Jordon's Home Furnishings in New Minas, Nova Scotia.
“I think it's very important to go to market, and the January market in Toronto is the only market I go to,” said Ted Reimer, president of Madison's Furniture, a single-unit retailer based in Regina, Saskatchewan.
“It's the most important market of the year,” added Alain Tessier, owner of Meubles en Gros, a two-unit retailer based in the Montreal suburb of St-Leonard. “If you don't go, then you really don't need to be in this business.”
-
Buyers bring optimism to Toronto show
Jan 5, 2010
Featured Company
-
Brandwise Inc.
Brandwise serves a model - not just an industry - by integrating, automating, and optimizing the entire sales channel, from wholesale Suppliers to their Reps and the Retailers they service. In short, our software helps Reps and Suppliers sell more and create... more
VIEW ALL GALLERIES
