Producers watch prices

Heath E. Combs -- Furniture Today, February 25, 2013

Higdon Furniture plans to promote dressers with mirrors that lower to reveal a television at the Tupelo market this week. This dresser is from the Madison collection, and five additional SKUs are available in other bedroom groups.TUPELO, Miss. - Exhibitors at the Tupelo Furniture Market are ready for the heart of tax refund season as checks trickle out a little more slowly this year.
     That is if pricing pressures on raw materials don't spoil the party. Oil prices appear to be increasing the cost of foam slightly, while an improving homebuilding market is doing the same to frames.
     Foam sellers are talking about increases on buns - blocks of foam - and fabricated parts, according to Jim Sneed, CEO of Affordable Furniture, who added that in January he also began seeing price increases on frames.
     "Nobody's certain on it, they're just threatening it. You can't go to market with just a veiled threat hanging over," Sneed said. "You look kind of stupid going to market pricing goods and (after market) you go hand them an increase? That's just not good business."
     Bo Robbins, president of Fusion Furniture, said he has had a frame price increase and expects a foam increase in March. Costs for polyester fiber are also expected to rise, he added.
     Frame hardwood is getting harder to find, which may be due to a projected second quarter gain in housing starts, he said.
     "It's kind of come at a bad time because we've got Tupelo samples done. A lot of these things are going on to High Point. It's kind of got me in a not necessarily knowing what to do position," Robbins said. "To go back and readjust pricing on covers that you've selected - it gets to be a problem."
     Jeff Warren, owner of J&W Frames of Pontotoc, Miss., said prices also have increased for another component, oriented strand board. If housing starts improve, prices could continue rising, he said.
     Howard Gaskin, sales manager for Collums Furniture, said rising fuel prices are likely impacting poly-based items like foam and could eventually spread to freight.
     "Fuel prices are going up. Once that starts, everything starts going up," Gaskin said.
     Retail business is good now and this week's market comes as tax season is heating up, he said. Refund checks appear more spread out this year, which could benefit manufacturers by making it easier to get orders completed, he said.
     Affordable's Sneed said tax season started later this year and refund activity in furniture sales didn't start picking up until the first week of February, about two weeks later than last year.
     Fusion's Robbins said orders were slower this year but the tax season is starting to pick up and he's expecting orders to continue picking up.
     "We've actually had more phone calls lately about what we have got ready to ship and what are some items they can get pretty quick," Robbins said.
     Fusion will concentrate on its October High Point Market introductions here, many of which were introduced there for January delivery, Robbins said. It will also preview some pieces for later this year.
     Bill Bevec, sales manager for Higdon Furniture, said that in general retail is getting better.
     "There's so much negativity out there right now it's hard to tell. If you're looking at numbers, absolutely it's getting better - looking at sales numbers," Bevec said.
     He said Higdon has a strong seller in its entertainment mirror dresser that comes in six SKUs it will promote here. It's also doing well with items like its dollhouse headboard in youth bedroom.
     The novel entertainment dresser - whose mirror lowers like a window to reveal a television - is expected to retail between $399 to $499 and matches bedroom groups. Hidgon has been using promotional videos to show the item.
     "It's been in some other instances in some expensive bedrooms where they're electric and remote control but you're talking $6,000 bedroom sets," Bevec said. "It'll be a big thing for us. We should do a lot of business there just based upon what's happened so far."