Categories: Market, News & Events, Stump & Company | Published: May 2nd 2021
Our team is excited to be back on planes and traveling!
We kicked off our return to in person markets with the Las Vegas Market, April 11-13. We expected a 50% crowd, but what we observed was probably less than that. It was disappointing to see the empty spaces in all 3 buildings, but there was great activity and energy on the lower floors. We also liked the new welcome center, check-in process and temporary spaces in the Expo Center.
The clients we met with over our two days in Vegas were upbeat. Those in attendance welcomed exuberant customers (a majority of whom were west coast based) and major national Top 100 retailers who were excited to be back to market and ready to write orders.
As one industry friend put it, “The people who were here, were here to do business!”
Two weeks later (April 26-27) we headed to PreMarket in High Point, and again most industry players (exhibitors and attendees) were very upbeat. Similar to PreMarket last Fall, we believe this was in fact THE MARKET. Retailers were anxious to meet their suppliers again and talk about future product introductions and trends, as well as locking in product and inventory. With surging home furnishings sales growth, the industry is seizing the moment and didn’t want to wait for June - particularly given the pervasive frustrations with the supply chain, the foam crisis, container costs, and other headwinds.
Also of note, many exhibitors indicated they are enjoying a more regular High Point presence with their customers, via the First Tuesday initiative and other private meetings at the showrooms. One large international player is hosting customers weekly in High Point for private product introductions, followed by gourmet meals, fine wine, and team building. It is refreshing to see these high fixed cost showrooms generating traffic beyond the bi-annual weeks of market. Clearly our industry is gaining momentum for getting back to business face-to-face.
Going forward, how will the industry adapt to the market cycles - will it remain a quarterly fixture of the calendar?
Other furniture industry sectors are asking the same questions about markets:
- The hospitality sector is challenged with two strong but competing markets, one historically in Vegas in May and one in New York in November. Are two shows needed? Both are “pop up” temporary shows, which were suspended for COVID and hope to return in 2021. And this year, interestingly, the August World Market Vegas Show overlaps with HD-Vegas (at the Mandalay Bay Convention Center), which will allow for some compelling cross-selling opportunities. Indeed, this is in line with the blurring of the once traditionally distinct hospitality and residential sectors, similar to what we’ve seen between the commercial and residential sectors – ‘resi-mercial’ – over the last several years.
- The commercial/contract market is rethinking NEOCON and the Merchandise Mart as the destination, with Teknion, Herman Miller, and Knoll exiting to their own private buildings in Chicago, allowing for easier customer visits year-round.
As noted above, the Commercial sector is likewise experiencing a blurring of channels – highlighted most recently by the acquisition of Knoll by Herman Miller. With Knoll doing almost 30% of their annual revenue in the home and Herman Miller investing in its Direct-to-Consumer e-commerce presence, it clearly sets up these two behemoths to play in the residential market in a new and aggressive way. This blockbuster transaction sets the stage for major industry disruption going forward.
The broader M&A market is also very brisk. Strategic players that are thriving are looking for acquisitions to continue to expand capacity, product offerings, and sales channels. And Private Equity and Family Offices are anxious to deploy capital that sat on the bench for much of 2020 due to COVID-inspired uncertainty. The result is a frothy pool of prospective buyers excited for new deals.
We are busy and experiencing first-hand the pace and energy of our exciting furniture industry.
Call us and take part in this exciting M&A season!
UP NEXT AT A GLANCE
- Domestic upholstery manufacturers
- International manufacturing facilities
- E-commerce companies, both wholesale/B2B and direct-to-consumer brands
- Hospitality manufacturers and importers
Correction: May 3, 2021
An earlier version of this article incorrectly stated Steelcase was leaving Merchandise Mart. This has been corrected to say Teknion, not Steelcase, is exiting Merchandise Mart.
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- Let’s go to the Market(s)!
- Q1 2021 Update
- A Furniture History Lesson
- BRAXTON CULLER, INC. IS ACQUIRED BY CLASSIC HOME, INC.
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