Business on an upswing
Retailers looking for fresh looks, true values
By Clint Engel -- Furniture Today, April 17, 2010
HIGH POINT —
Sales are finally on the upswing for many furniture retailers in town for the High Point Market, and they're hoping to fuel that long-awaited improvement here with fresh looks priced as true values.
Most retailers contacted for this story say they definitely have seen a turn for the better in business, and some say that this time it may be sustainable.
With that in mind, they plan to shop aggressively here to keep that momentum going. While some said promotional and starting prices will be important for the consumer who is just now venturing back into stores, more said they were focused on finding truly fashion-forward and innovative goods to freshen their floors.
Several retailers have contemporary styles high on their list. While upholstery has been driving sales for many retailers during the recession, the case goods business is finally picking up — so bedroom and dining room will be important categories to shop as well.
Buyers also say they've heard about the probable price increases resulting from higher materials and fuel costs and they appear ready to pay more — at least for new product — if the value is clear.
Indianapolis-based Kittle's repositioned itself in its markets last year — as the go-to furniture store for increasingly value-conscious consumers — and has been enjoying double-digit sales increases since last summer, said President Eric Easter. He said he's ready to shop across a broad price spectrum here.
“If it differentiates us and looks like a great value at whatever price point, we're going to jump on it,” Easter said.
In the past several months, Kittle's has seen its fabric and leather upholstery business growing, and in the past 75 days or so has also has seen a nice uptick in case goods sales, especially bedroom.
“We'll certainly be looking very hard to add to our bedroom assortment, freshen and expand our offering both in terms of breadth of style and price point,” he said.
During premarket, the retailer was impressed with new product from Legacy Classic, Universal, Vaughan-Bassett and Homelegance. Bernhardt's new Vintage Patina collection was one of the most exciting things buyers saw, Easter said, adding that Kittle's already has committed to goods from most of these suppliers.
Chuck Nader, president of Gardena, Calif.-based Nader's La Popular, said he's coming to High Point in part to look for new sources to replace lines that are tired and suppliers that have been slow to deliver. Like Easter, Nader said case goods sales have come on strong in the past two or three months, so he'll be looking for what's new across the categories.
“Traditional will be replaced with more contemporary, more mainstream, urban type looks,” Nader said. “Those looks have become more popular with the younger people and they're the ones who have been doing the buying today.”
For Miami Gardens, Fla.-based El Dorado Furniture, business through the end of March is up about 15% over last year.
“I do believe the worst is over,” said Carlos Capo, vice president of finance and merchandising.
Like many in the industry, El Dorado has had trouble getting shipments from China because of a shipping capacity crunch. Now that problem is easing, but Capo and others are hearing that product prices will be increasing because of rising fuel and materials costs.
“Some vendors are saying they can't hold out any longer,” he said. On newly introduced merchandise, Capo believes the increases will be built in and easier to swallow.
“But I believe if they (raise prices) on old goods, they will force themselves into losing some market share,” as retailers replace the items with something else, he added.
At market, El Dorado will shop for styles including contemporary. Its stores are doing more business in that category, but Capo said it's still difficult to find product that sells in Florida. Too much of it seems geared for European markets, like beds that are often too low to the ground. Capo is hoping to find more that appeals to American consumers.
Mike Forwood, president of Louis Shanks of Texas in Austin, Texas, said business for the high-end retailer has been “very sporadic” and that he's here looking “for excitement, something to put some punch into the mix.”
“I'm not looking to nickel and dime (sources) or someone who brings me the next Louis Philippe for five dollars cheaper,” Forwood said. “I'm looking for someone who can bring me stylish products.”
He's looking forward to seeing Lexington Home Brands, which he said came out with a nice new Tommy Bahama line in Las Vegas and is promising a step-up in price points with its Regents Row introduction here.
He also likes samples he's seen of Councill's new 18th- century mahogany bedroom, dining room and occasional furniture.
“I have no idea what it's going to cost,” he said. “It's going to be expensive, but it looks like it (should be).”
Jake Jabs, CEO of Englewood, Colo.-based American Furniture Warehouse, estimated that business is up a little better than 10% this year, and said he's in a strong position to buy new goods both from domestic and overseas sources.
Jabs said bright colors in upholstery — sofas with orange and yellow cushions, for example — are selling well, so he'll look for more along these lines.
AFW also has done well with contemporary platform beds and will be looking for more, as well as other goods in similar styles. Youth bedroom is another growing category for AFW, and its buyers will be looking to supplement the goods that are already selling well, from sources such as Ashley.
Price increases are inevitable, Jabs said. He added that he has seen freight rate increases too.
“We're looking a little more domestic,” because of the struggles AFW has had getting containers in from China and because Vietnam has become “a bit of a loose wheel.” (Workers at one of the factories AFW deals with there are on strike.) “As that happens, it's just harder to import.”
One cure for higher prices, Jabs said, has been bonded leather. He said some of it looks and feels more like leather than traditional leather, and it dramatically reduces the prices on sofas.
Upscale Gorman's Home Furnishings of Southfield, Mich., is looking for “fashion/style, quality and price,” said Chairman Bernie Moray. He's counting on inspiration from some of the suppliers who have done a good job for Gorman's, including Lexington, Stanley, Universal, Natuzzi and W. Schillig.
While the business climate is still tough in greater Detroit, Moray said the retailer has seen sales increases for the past three months. One likely reason is that there are fewer stores to shop in the market than there were a few years ago.
“People are trying to spend their money wisely,” he added. “We see much more traffic than we are closing. People are making two or three visits before they part with their dollars, so close ratios are weak, but the traffic is better. The end result is we're doing better.”