Archives

Take It From An Insider by Joseph Carroll

VIEWPOINTJoseph Carroll shares his thoughts on the semi-annual nature of furniture markets in the US and the trends he observed in recent and over the past 39 years.

I’ve atteattended everyevery High Point Furniture Market since April 1970.

That amounts to 78 markets. Americans like to do everything in a big way so while most countries have one national market a year, the US has two annual national markets: High Point in April and October. Not to be outdone, the markets in Las Vegas and Tupelo follow suit with two annual shows as well. Years ago, I asked our editor if he thought we needed two events a year. After all, it costs manufacturers a lot of money to rent space, bring their samples and people to the show. Our editor’s reply put things in perspective. He said a market was more than just an opportunity to sell furniture, it was a gathering of old friends, an opportunity for buyers to meet with executives of the manufacturing companies they purchased from, a chance to show most of their line in one place in beautifully decorated settings, a time to provide training and product knowledge to the sales representatives. Most of all, it provided manufacturers with a second chance to come up with new designs to replace those that did not fare well the previous Market.

Will the US join the rest of the world and only hold one annual market? I can only repeat the reply of John Christian Bernhardt, the venerable founder of Bernhardt Furniture, who told the American Home Furnishings Alliance at a meeting in 1992: “I have been coming to Markets for 62 years and they were talking about one Market a year when I started”.

I’ve been coming to Markets for 39 years and I must agree with Mr Bernhardt that I don’t see one Market a year in America’s future anytime soon. Of course, I am quick to point out that this industry follows no logic so don’t pay any attention to my predictions.

In a recent book called ‘The Furniture Wars: How America Lost a 50 Billion Dollar Industry’, author and former furniture executive, Mike Dugan, refers to our leaders as being either “insiders” or “outsiders”. The outsiders were, for the most part, either corporate managers brought in from other industries, to show the good old boys who had grown up in the furniture industry, how to make the high profit margins they were accustomed to make in their own industries. Or, they were MBA graduates straight out of Harvard or Stanford who would show us how to run our business “by the book”. You’ll have to read Mike’s book to find out why that kind of thinking caused us to lose a 50 billion dollar industry.

I came into the furniture industry in 1970 from having been a college professor of French literature and then an advertising agency executive. I had been given a furniture account to manage and that took me to my first High Point Market that April. I never considered the possibility that seven years later I would enter a third career as Publisher of a trade newspaper serving the furniture industry. How I came to make that decision is another story. The point is after almost four decades in the furniture industry I have come to be accepted as an insider. This, by the way, means a great deal to me, as I cannot imagine doing anything other than being a part of this great industry that has attracted so many good and talented people all over the world.

So what does this “insider” see happening in the industry? It’s a question I get asked quite frequently. I tell people I am no oracle. All I can do is pass along what I hear and observe.

Even though most people want to know which market is going to be the national market in the US: High Point or Vegas, I tell them I believe High Point will continue to be the national Market and Las Vegas will be a strong regional Market for the Western states. Each has both strengths and weaknesses but they can and will, I hope, coexist to serve customers with their own particular advantages. The real issue, I believe, one that you don’t hear discussed, is: What is the future of the Markets themselves?

These recessionary times have caused exhibitors to re-evaluate their costs and return on investment. For the first time in my 39 years of Market attendance I see empty or shared showrooms in some of the major buildings. The exhibitors haven’t gone out of business; many have just decided they can show their new introductions in a smaller space in order to reduce expenses while maintaining a presence at the show. The common wisdom says we will not see an increase in domestic manufacturing - so who is going to fill the showrooms? The answer is either nobody - or they could be foreign manufacturers, particularly Asians, who are just waiting for the US economy to improve so that they can open showrooms and distribution centres in High Point and sell direct to American retailers. It’s also possible that we’ll see more American entrepreneurs, fed up with corporate burdens and restraints, open their own import companies offering custom upholstery, or custom finishes in wood furniture, coupled with fast delivery. They share a common hope: Don’t grow too large, find a niche to fill and just concentrate on being profitable. Personally, I think they have a good future.

What about tomorrow’s consumer? Here are some of the changes I see taking place: The theory that certain age groups prefer certain styles (e.g. middle aged couples buying contemporary to rejuvenate themselves, seniors buying 18th century antiques because they have money and good taste) is no longer valid. Seniors shop at IKEA, just like young people in their 20’s. An interesting development is that young people don’t care about manufacturers’ brands; they prefer to shop at brand name stores, like Pottery Barn, Crate & Barrel and IKEA. They don’t want furniture to be something they have to keep for life; they want to dispose of it every four or five years and purchase something new. This could be one of the best things that ever happened to our industry.

The other most frequent question I am asked is: “How was the Market?” I could give them a quick answer and say it was great for some and weak for others – but that is always the story. Actually most manufacturers told me their business was up ever so slightly over last year this time and that orders were coming in at a slow but steady trickle. It’s not that buyers don’t want to buy furniture; it’s just that they cannot get credit from the financial institutions. As one manufacturer put it: “Instead of coming to the Market and buying deep and narrow, they are buying broad and shallow.” Few manufacturers see customers buying container loads of a new introduction or bestseller. They are buying smaller quantities of more items. This keeps their floors looking filled and they know they can replenish their inventory fairly quickly as most manufacturers offer some type of quick ship programme.

My wish is that out of this economic recession, certainly the most devastating I have ever witnessed, will rise a generation that will seek out quality and value. A generation that sets money aside to pay for their purchases, cares about the environment and sees the value in sustainable furniture, that understands that beautiful furnishings can make one’s home both a place for relaxation and a safe haven from the outside world. I don’t think this wish is overly optimistic. In fact, it’s one of my predictions that I’ll stand by.

Joe Carroll is Publisher of Furniture/Today, the weekly business newspaper of the American furniture industry. He was recently inducted into the American Furniture Hall of Fame. He can be reached at jcarroll@reedbusiness.com.