Outlook uncertain for Toronto market
By Michael J. Knell -- Furniture Today, January 6, 2008
Toronto — Resources showing at this weekend's Canadian Home Furnishings Market are confident that those retailers who turn out will be here to do business, but the question remains just how many buyers are going to sign in and how much open-to-buy will they have?
Most executives agree that retail has been soft throughout the country in recent weeks. And forecasts for 2008 are mixed at best — even the prime minister is taking a cautious view of the country's economic outlook.
"Although the fundamentals of the Canadian economy are strong, although we have taken our budget actions very early this year to position ourselves, the fact of the matter is Canada — as an open trading economy — cannot be immune from the growing uncertainty we see in the U.S. economy and the global economy," Stephen Harper told the Globe & Mail. "There's likely to be a more challenging economic year ahead."
Clearly, 2007 also was "a challenging year," said Mel Kemp, president of ready-to-assemble specialist Canwood. "Our Canadian business has been alright. The West is still quite strong economically, driven as it is by commodities. But the East seems to be struggling.
"Our U.S. business has been impacted by the dollar and economic conditions, which aren't favorable."
At Palliser, Executive Vice President John Phillips said company officials are optimistic about 2008. As for 2007, "it's been a difficult year although we've gained some momentum over the past six months."
"Basically, the good retailers are saying they're better than last year, but not much better and they're generally looking to 2008 for more of the same," said Ed Farquharson, vice president of sales and marketing for full-line importer Eztia.
Most executives maintain that buyer attendance at the Toronto winter market has declined in recent years. There are fewer furniture stores across the country than there were 15 years ago and the role that markets play has changed significantly. Nobody expects to see this situation change in 2008, and many execs worry that CHFM is in danger of becoming a regional market, attended only by retailers from central and eastern Canada.
"Attendance will be about what it was last year," Phillips said. "We can't expect many dealers from the West."
"I think attendance will be reasonable from Ontario and Quebec and it will be excellent from Atlantic Canada, but we're not getting a lot of commitments from the West," Farquharson added. "And they're giving us just one reason — Vegas."
"Our audience in the West is going to Vegas," agreed Canwood's Kemp. "They seem to be opting for a closer, warmer and more convenient market."
However, many execs find this preference difficult to understand. A majority of independent retailers in Western Canada buy upholstery from Canadian suppliers — whether regional producers or one of the big names participating in the CHFM. With a few exceptions, these producers mostly exhibit in Toronto, not Las Vegas.
But this doesn't mean exhibitors are cutting back on their plans for new products, collections and programs here. This may be one of the most active markets in this regard in several years — from the re-introduction by Distinctive Designs of the Kroehler brand of case goods, which has been absent from the Canadian market for more than 15 years, to the launch of dizzying array of eco-friendly goods.
A few fresh faces also will be exhibiting here. The most prominent is Saloom Furniture, a casual dining specialist based in Winchendon, Mass.
While expectations concerning attendance have been lowered, the other pressing issue is will those retailers who sign in have any open-to-buy?
"There's always some open-to-buy, the question is where is the dealer going to spend it?" Phillips noted.
"The good retailers are low in terms of inventory but they're going to be very careful in their buying and they are cutting back on the containers they order," Farquharson said. "They are looking for something that is truly different and they're tired of racing to the bottom."
The deflationary crisis caused by the surge of imports from China in recent years has bottomed out and Canadian manufacturers are expecting to see renewed interest in their offerings.
"Retailers realize that choice is more important than initial first cost," said Phillips. "(Imported goods) are not the product solution that some people thought they (were) two or three years ago."
Executives are also expecting that buyers will have considerable interest in new product.
"I don't think retail inventories are high," Kemp said. "And I believe the dealers that we are going to see will react favorably to the product we are going to show."
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