Look for more deals this year
Ray Allegrezza, Editor in Chief -- Furniture Today, January 20, 2008
Whoever said, "May you live in interesting times" must have been speaking to our industry. Like it or not, we are in the midst of some of the most interesting times I can remember. And I'd be willing to bet they are going to get even more interesting as this year unfolds.
I think we will see continued consolidation, both at retail and on sourcing side of the business. Moving forward, this consolidation will accelerate.
One of the key drivers of this consolidation, as is usually the case, will be financing. In 2008, a company's success rate will be directly attached to the depth of its pockets. You had better have deep pockets or at least have access to someone who does.
Even so, I think we may see a flurry of aggressive investments in the business, particularly in domestic upholstery. For openers, the cost to float a container is up anywhere from $300 to $400. Globally, furniture sources also are facing some stiff price increases in terms of raw materials, including foam and fabric. Lastly, China shines brightest when making long runs of tightly edited furniture.
When I look at all of those elements and factor in the number of domestic factories that can be bought for a song, along with a workforce of trained workers waiting for someone to turn the lights back on, I think that leaves the door open for financially solid companies to take a shot at either making more upholstery domestically, or at least doing much more cut-and-sew activity here.
While holiday sales across many retail sectors may have been off, the fact of the matter is that consumers were still out shopping and buying.
Here's my wish for those who may roll the dice on such ventures: May you find strategies even more interesting than these interesting times!
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