High Point Furniture Market Update

The High Point Market came and went quickly and quietly this year. While we saw evidence of many positive steps taken by the Market Authorities (better buses, free water, free parking, a completed transportation hub, and an accommodating attitude), the buyers were just not present. We started our client visits on Friday, but the traffic never materialized the first weekend. On Monday, the first official day, traffic remained light, and by Thursday afternoon, the Market seemed over.

Why? Many folks believe this market was too early (late March instead of mid-April), while others suggested that it was too close to the January Las Vegas Market (just 7 weeks ago), while others said poor retail sales kept people away.

Overall, we believe attendance was down 20-25%.  Our industry needs strong markets, and a strong High Point Market is critical for so many of our industry companies.  Let's figure out how to make this a long-term success!

Deal talk was everywhere, with too much discussion about the troubled companies in our industry.  Our assessment of the industry suggests that many companies are doing very well, and have bright futures and yes they had a terrific market with increased attendance!  These firms get little, if any, press or recognition, but move forward everyday with outstanding profits, offering wonderful careers for their associates and serving their communities faithfully.

Private equity was a hot topic, with Sun Capital's continued push into many segments of the industry.  Many of our meetings during the week were with PEGs seeking a new platform investment, or an add-on to their current holding

Asian influence remains high for the furniture industry, as US players are seeking a permanent partner for offshore sourcing.  We expect to see an increase in Asian acquisitions of US companies in the next 12-24 months.

Retail credit issues still consume a lot of our discussion time. Furniture vendors are concerned with retail credit, and we believe the economic slowdown has hurt many of the captive and independent retailers across the country.  Keep an eye on your credit policies, your A/R agings, and consider listening to your factor’s credit advice.

Change: We believe there will be more change in the next 5 years than in the past 5 years. Companies that can accept and embrace change will be fine.  However, those slow to accept change or refuse to acknowledge the shifting tides will be washed away.

We welcome the chance to review these ideas with you on a confidential basis and assist you and your company as we all seek to survive and thrive during these changing times.