High Point Market Newsletter

October 2011

We have finished our eight days in High Point and feel very positive about many aspects of our industry. Attendance at this market was up nicely from the spring and there was some optimism that business is improving. Clearly the market authorities have brought stability to the ownership of the core buildings and future permanence of High Point as an international destination furniture market.

Rumors were abundant, given the uncertainty of global economies, geo-political issues, and wide fluctuations in the stock and credit markets. But stronger companies repeatedly told us that their business is growing profitably, and that despite rumors and tensions in the world, they are boldly moving ahead with strategic actions to capture market share and improve long-term shareholder value.

Two large trends emerged that we are focusing on for the coming year:

• Rebalancing of US production:
  Many of our clients are looking to open US plants for manufacturing. We were pleased to broker the Albany Industries acquisition of Vaughan’s Galax, VA plant, where over 350 workers will be hired to manufacture upholstery. We believe we will see over ten transactions similar to this in the next twelve months as global players re-align their manufacturing footprint to address speed-to-market requirements, shifts in foreign exchange rates, rising Asian labor rates, and rising costs of ocean and overland freight rates.
• Strong companies will acquire to gain market share:
  We were pleased to be the exclusive agent for Sligh Furniture in their sale to Lexington Home Brands, and for TM International in their sale to Elements International. Both Lexington and Elements had signaled an interest in growth via acquisition and we witnessed bold, strategic and professional actions in their pursuit of these transactions. Be on the lookout for more of these synergistic deals in the coming months.

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: