Editor's Desk

Despite crisis, we will survive

Considering how quickly things are changing on the economic front, it wouldn’t surprise me if an amended version of the bailout bill is passed by the time you read this.
After all, in a matter of days we went from hearing about how sound the economy was, to listening to the crash of the Dow Jones Industrial Average as it plunged a whopping 777 points after the House failed to pass the initial bailout package.
But since we’re all friends here, let me ask: Was anybody really surprised by this latest meltdown?
For the past few years, I’ve heard more than one economist warn that with our loose-as-a-goose lending practices we were not only playing with fire, but were also running a real risk of having that house of cards go up in flames. But there was money to be made — lots of it. Financiers only cared about flames when they lit $50 bills to light their expensive cigars.
I knew our collective goose was cooked the day I heard a large mortgage lender brag about freely giving out Ninja loans. In case you missed that one, a Ninja loan is given to a prospective home buyer with virtually no income, no job and no assets.
I guess the Ninja loan was the icing on the creative financing cake. Well, a slice of cake can be a good thing. Eating too much of it can make you sick. We ate too much, it made us sick and maybe that’s just what we needed to convince us we were out of control.
I’m not perceptive enough to know if the bailout bill will be adopted, whether $700 billion is enough to fix what’s broken, or if there is a better solution.
What I do know is that even in good times, home furnishings purchases often end up at the bottom of the consumer’s list. I also know that the economy is not likely to turn around anytime soon.
But I also know something else: Over the past few years, we’ve headed to furniture markets directly on the heels of anemic retail sales, wars, terrorist attacks, hurricanes, bankruptcies, gas shortages and massive price hikes of raw materials.
And despite those obstacles, we survived. We took many of the good tools that markets provide: great designs, good values, best practices and innovative merchandising, then brought them back to Main Street.
And we’ll do it this time, and next time and the time after that. Because that’s what we do and that’s who we are.

Casual market: Selling romance

I recently had the pleasure of attending the International Casual Furniture & Accessories Market at the Merchandise Mart in Chicago.

In a word: Wow! Even though areas close to Chicagoland were still flooded, no thanks to Hurricane Ike, the mood was upbeat, the halls were busy and exhibitors, for their part, brought a storm of their own, flooding the show with well-designed, upscale introductions.

I had been away from this show for some time, and it was at once refreshing and gratifying to revisit this segment of the home furnishings market.

One of the things that floored me was the large number of better goods that were aggressively shopped by a diverse group of merchants that included Top 100 furniture stores, pool and spa retailers, catalogers, hardware stores, discount and mass merchants, architects and landscape designers.

That appetite for better goods, by both exhibitors and retailers, caused me to wonder why we haven’t taken a page from the casual segment’s playbook.

How is it that suppliers and retailers in this arena don’t blink, break into a sweat, or even breathe hard when evaluating a table set to retail for $2,499?

For me, the answer came in the hour I spent with Art Thompson, who has run Laneventure since its inception in 1989. Thompson, who is turning the company’s reins over to Gary McCray, looked around the showroom and asked me to tell him what business he was in. I looked around and saw tables, chairs, umbrellas, outdoor beds and more.

Before I could answer, Art said, “Ray, let me tell you what I see. I see us as being in a business that brings people together; a business that sells romance, promise and possibilities.”

Looking at the showroom through Thompson’s eyes, I saw the same thing. When a dream merchant looked around that showroom, there were no commodity goods in sight. Instead, there were unlimited opportunities for aspirational selling.

And while Thompson is that dream merchant, he has his feet planted on terra firma. “What motivates a consumer to buy is not simply that she can get $100 off,” he said. “What truly motivates her is providing her with the tools to allow her to create the lifestyle she envisions.”

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Industries:

Plan now for emissions rule

When The National Weather Service attempted to warn residents in the path of Hurricane Ike about the imminent danger headed their way, the agency warned that if they did not evacuate, they could “face certain death.”
Strong words, but necessary when trying to convey a life-or-death situation.
With that in mind, I sit here trying to choose the right words that I hope will serve as a warning of another storm that will touch down in our back yard.
Earlier this year, I wrote a column warning readers about the ramifications from formaldehyde standards adopted in California and set to take hold on the first day of 2009. (Read earlier column)
The new rule, to be implemented in phases, will restrict formaldehyde emissions from composite wood products like plywood, particleboard and MDF, common components in furniture. Beginning Jan. 1, retailers in that state will have 18 months to clear their shelves of all non-compliant furniture.
Any California retailer found to be selling non-compliant furniture will be asked to stop selling those items, and non-compliance could result in fines.
Among the many challenges with this initiative is that to date, only a handful of facilities exist — either domestic or offshore — that are certified to test composite panels for formaldehyde levels.
In addition, while the regulations only apply to goods sold in California, most suppliers are not anxious to segment their production into California and non-California inventory.
Last week, an importer told me how one of his suppliers wanted a hefty price increase as a result. The importer said he would pay the increase provided the factory sent the proper certification.
This is the first time I’ve ever repeated a topic in my column. But this issue has the potential to make Hurricane Ike feel like a soft summer breeze.
I’m not an alarmist. But I am a realist who is telling you again that January will be here before you know it. I hope you have a plan in place for when the clock strikes midnight.