If you survived the past decade, congratulations

March 12, 2013

I recently had the honor of speaking to the Nationwide Marketing Group's early March PrimeTime meeting. This was especially flattering since I had spoken to this group before. I feel like anyone can be invited to speak but to be invited to speak again is the compliment.
This was a record meeting for Nationwide with more than 5,000 dealer/members and vendors in attendance in Las Vegas. Before addressing my view of the future, the economy and (do I dare say it?) Washington, I thought I would give my congratulations to all the retailers and vendors in the audience. Why? Considering what we have all shared over the last five years, we are truly winners or at least survivors.
Only five years ago, existing home sales dropped 53%, new home sales collapsed by 80%, unemployment more than doubled, in full panic the banks stopped lending and American consumers stopped spending wherever they could. Let's face it, the home furnishings industry is largely dependent upon housing turnover, consumer attitudes (and employment) and credit to finance our customers' purchases. All three were sucker punched.
The worst post-World War II recession, 1982, had home furnishings sales decline about 7%. This time furniture sales dropped about 17% and mattress sales for a while ran 22% below year earlier levels.
Of course, our government stepped in with debt-forgiving bailouts for the auto industry plus the infamous "cash for clunkers," while housing received the $8,000 tax credit for first-time home buyers, helping these industries move excess inventory. Our industry got jack squat.
In the past 10 years, the Furniture/Today Top 100 furniture store list lost Levitz, Wickes, Breuners, Lack's, Benchmark, Homestead House and 29 others.
Meanwhile, many of our leading furniture brands continued opening their single-branded stores, often keeping independent stores from using their brand power.
Over the last decade, the largest 100 stores went from having 50% of the furniture store revenue to 59%, and growing non-furniture store retailers like mass merchants, clubs, rental, catalogs, Internet and others grew to 42% of all furniture and mattresses sold from 36% a decade earlier.
By our measure, the high end declined from 14% of home furnishings sales to 9%, and imports of wood and upholstered furniture grew to 73% and 42% of total U.S. sales, respectively, from 48% and 17%, all over the last decade. Our statistics show that the aggregate dollar sales of smaller furniture stores is 56% below where it was in 2002. Of course, furniture prices over this time declined 14% while all consumer expenditure pricing rose 22%.
Bottom line? Congratulations on surviving to enjoy what well could be a most exciting and promising decade for our industry.

Posted by Jerry Epperson on March 12, 2013 | Comments (7)

Industries: Furniture Retailing

May 8, 2013

In response to: If you survived the past decade, congratulations
Teiya commented:

You've really hleepd me understand the issues. Thanks.

May 6, 2013

In response to: If you survived the past decade, congratulations
Ali commented:

Ya learn semohting new everyday. It's true I guess!

March 25, 2013

In response to: If you survived the past decade, congratulations
Industry Veteran commented:

Come on Jerry. You certainly are capable of answering my questions #1 and #5. Why the silence? As a financial insider you must have plenty to say about these two questions.

March 18, 2013

In response to: If you survived the past decade, congratulations
Industry veteran commented:

What, pray tell, is so invaluable about telling us everything we already knew if we have been awake for the past 15 years? When will this publication start editorializing about meaningful subjects like:

1. How can the board of directors of FBI sanction the outrageous bonuses given to their executive for destroying their company? Why haven't the shareholders fired all the board of directors? That should be a blockbuster informative story.

2. What new approaches to retail and manufacturing can bring manufacturing back to North America?

3. Why have so many of the few remaining made in USA manufacturers been so averse to change to lean and just in time manufacturing?

4. Why is our industry so production and price driven when it is design that sells its product?

5. What capital venturists might be interested in financing a rebirth of our industry and why?

6. What specifically does Jerry suggest we do to rebirth our North American furniture industry?

March 14, 2013

In response to: If you survived the past decade, congratulations
THOM commented:

Thank you for this information.

So, imports continue to rise, high end is in decline and independent or smaller retail operations continue to still struggle.

We have survived but at what cost? Did we possibly lower the VALUE and QUALITY of our products in order to hit the magic price points? Now we have to sell more quantity to make up for the $$ quality. It is concerning that what we may be setting up the next generation as to what really is GOOD FURNITURE.

Particleboard not solid hardwood, bonded leather not true top grain leather, etc...

The consumers out there drive nice cars, have nice clothing & jewelry, upgrade their kitchens with high end appliances yet they may have less choices for quality furniture in the future.

Sad when a consumer spends more money towards their laundry room or garage vs a den or bedroom.

Everyone has a budget and I understand that, but should we not consider our image? What is it and what do we want it to be in the future?It is something to think about...

March 14, 2013

In response to: If you survived the past decade, congratulations
THOM commented:

March 13, 2013

In response to: If you survived the past decade, congratulations
Steve Walker commented:

As usual, great stuff here, Mr. Epperson. Thank you for continuing to be an invaluable resource for the furniture industry.