High Point Market Newsletter

October 2010

“When you come to a fork in the road, take it,” said Yogi Berra. This sentiment is the position most people felt these past 2 weeks in High Point. Executives are employing 360 degrees analysis, trying to decide how to survive, grow and thrive in this turbulent economy, and are re-evaluating their vendors, customers, employees and business practices. The strong are getting stronger, and the weak are fading away.

With retail sales weak (especially in August–September-October), finding growth will require acquisitions, as well as predatory practices to gain market share from competitors. We heard of aggressive new national account sales strategies this Market, and new sales channel segmentation, as well as a renewed focus on export sales (particularly to the Middle East).

We continue to believe too many of our industry leaders are blaming others for a lack of sales and are too focused on the reasons why business is not strong. Fingers are usually pointed at the federal government, or the “too many markets” theory, or the retailers that can’t generate an exciting shopping experience, or the banks that won’t lend money. But all business owners are expected to grow and make money and there remain many success stories in our industry. Profits and growth can be achieved, even in this difficult time.

Mergers & acquisitions are on the forefront of business owners’ minds now, with strong companies “seeking alpha” and other companies trying to avoid further losses and claims on their personal guarantees. We have several transactions in the hopper, with a wide range of strategic, financial and international buyers, in wood and upholstery, and operating across a wide range of price points. While M&A work has been relatively slow for the past two years, acquisitions in the furniture industry will be strong for many months to come. We are excited to see this trend emerge.

Please let us know how we can assist you and your company. Also, let us know what you think about our ideas presented in this newsletter. As always, our conversations will be held in the strictest of confidence.

Quote of the Market: “Let’s not confuse activity with achievement.”