Attendance light at Toronto show
Michael J. Knell -- Furniture Today, January 21, 2013
TORONTO - Light attendance coupled with reasonably strong order writing has been declared the "new normal" for the majority of furniture industry executives exhibiting at the Canadian Home Furnishing Market, which ended its annual four-day run at the International Centre here early last week.
When the final numbers are tallied, Canadian furniture store sales are expected to end 2012 at about $9.6 billion, a year-over-year uptick of only 1.8%. The forecast for this year is that their sales will gain another-mediocre 2% to $9.8 billion.
Home furnishings stores - which sell everything from floor coverings to lamps and lighting, wall art and other decorative accessories - aren't expected to outperform their cousins as they have in previous years. For these merchants, 2012 sales will probably be in $5.7 billion range, also up 1.8%, and 2013 will also see 2% growth and sales of $5.8 billion.
These forecasts were given more credence at market, with exhibitors continually expressing disappointment with what they perceived as a lack of traffic walking the five exhibit halls of the International Centre. Many industry exhibitors also noted traffic patterns for TCHFM - Canada's only national furniture industry event - have changed in recent years.
This was mainly attributed to what appears to be a growing desire on the part of many independent furniture retailers from the four western provinces (Manitoba, Saskatchewan, Alberta and British Columbia) to attend the winter market in Las Vegas. Several execs also said that in recent years, many large independent retailers have evolved their product acquisition strategies to the point where TCHFM isn't as critical, or doesn't require as long a visit.
"For us, this market is more about eastern Canada. There seems to be less traffic in the halls but we're still seeing who we need to see. Las Vegas is going to be well attended by western Canada," said Jason Harris, vice president of sales for contemporary upholstery specialist Stylus, Made-to-Order Sofas, which is based in Vancouver, B.C.
"The traffic patterns have changed. Eastern Canada drives the traffic but the majors are still supporting this market," added Christa Albrecht, vice president of sales for Canada and the eastern United States for case goods producer Magnussen Home.
Most executives said they believe attendance at this market - as it has been for the past several years - is driven by the influence of the buying groups. Three of the big four groups - Cantrex Nationwide, Dufresne Retail Solutions Group and Mega Group/BrandSource - use TCHFM to launch their merchandising, marketing and promotion programs for the year.
According to the Quebec Furniture Manufacturers Assn., the owners and operators of TCFHM, there were about 325 companies participating in the 2013 market, about the same as last year. Of these, 40 showed for the first time.
Even though the consensus among exhibitors - the QFMA doesn't publish actual attendance figures - is that traffic continues to trend downwards, they also agreed that those retailers walking the halls were there to do business. Among independent retailers in particular, two buying trends were gaining momentum: the need to floor better quality and better priced goods, and especially in upholstery, a move away from imported goods.
This year’s Quality Canadian Furniture Trends Display was
inspired in part by the 2013 Pantone View Home + Interiors
color forecast. Here is the display’s interpretation of the
Connoisseur Palette, featuring the Seine sofa and ottoman by
Palliser, vases by Le Présent and a rug from Carnival.
The Ludovica loveseat, armchair and tables from Continental
Furniture illustrate Pantone’s Glamour Palette for 2013. The
lighting and mirror are from Gen-Lite and the rug is from
Several senior executives said business for most independent retailers in most of Canada was tough in November and December, although sales perked up considerably during Boxing Week. But this only prompted retailers to go from "cautious" to "careful" when it came to buying decisions. They still needed a reason to buy.
"People were buying things that are unique, things that are different from what they already have on their floors," Harris said, pointing to a 46- inch-deep sofa new to the Stylus lineup that received a lot of attention at market. "This was driven because of the sameness coming out of China. There was not a lot of talk about price."
Independent retailers seem to be focusing on increasing their average ticket.
Solid wood specialist BG Furniture came back inside the International Centre after spending several years in an outside showroom, a move company President Adam Hofmann said was more than worthwhile.
"We saw a lot more traffic other than our regular customers, so for us it was worthwhile coming back inside," he said.
Retailers were demanding new goods, he added, such as BG's new collection made with ash, an open grain wood. BG also broadened its occasional assortment, adding a number of entertainment centers, sideboards and similar pieces with Dimplex fireboxes.
"I had a lot of retailers tell me the imports weren't working anymore. They were telling me ‘I need to trade up' and ‘I need to rebalance my floor,'" Hofmann said. "Retailers really seem to like us doing unique things."
Independent retailers also were looking for simplicity - particularly when it comes to flowing the goods. For Magnussen, this meant strong, growing interest in its Quick-flex program, which allows retailers to bring in goods by the cubic foot rather than buying an entire container, Albrecht said.
"We are very happy with this market. Retailers wanted better price points on their floor," she said. "They want better goods because they don't want to fight where no one wins."
"It's been a good market. We will do as much business as we did last year," said Kevin Sisson, vice president and chief operating officer of bedding major Sealy Canada, saying retailers were buying Sealy's show specials in force. He added that the company's new zoned pocket coil/gel hybrid My Cloud collection also generated a lot of buzz.
"Traffic was sparse but the orders were there," reported Ronnie Mehta, president of Worldwide Homefurnishings, an importer based in Toronto. "They were definitely looking for better quality goods. The volume they sell isn't going up so they need to get their key price points up."
He also noted one other disturbing trend: "A number of dealers told us there were closing their doors because the furniture business isn't as exciting as it used to be."
"For us, the show has been good even though the traffic was down," said Faizel Sunderji, president of the Calgary, Alberta-based upholstery producer Dynasty Furniture, which launched 100 new fabrics and 20 new frames this market.
"We are still getting market share away from the importers - a lot of business is coming back to North America," he said.
Coming out of market, not one industry executive is looking for 2013 to be a banner year at retail. Many point out there's little or nothing either in the news or in the economy to suggest this is going to be a good year. But the attitudes expressed by retailers were not as glum as would be expected.
"I would call it hopeful," Sealy Canada's Sisson said. "This is the new normal. Retailers are seeking new ways to grow their business, which explains the rising interest in specialty bedding."
"The first half is going to be a continuation of the last quarter of 2012, but I'm very positive for the second half of 2013," Worldwide's Mehta added.
"They seem to more confident about their business in 2013 but not bullish," BG's Hofmann said.
The next edition of the Canadian Home Furnishings Market will be held in Toronto Jan. 11-14, 2014.
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