by High Point Market interviews reveal reaction at market and how this bodes for the rest of the year heading into 2024
HIGH POINT — Conversations with executives at the recently concluded October High Point Market showed a glimpse of strategies and approaches to the business that could determine their success in the new year and beyond.
While no one says that retail store traffic or sales are particularly strong right now, they came to market with aggressive product mixes and some promotions aimed at helping spur business in the months ahead.
The sharpening of price points was one strategy aimed at driving interest and commitments at market, although the hope is that some of that will be finalized in the coming weeks, shaping into orders.
Jay Carlson, president of Nice Link Home Furnishings, told Home News Now that retailers appear to have a decent open to buy position to help update the mix on their floors. But they also are looking for deals that can help them sharpen price points themselves, or at least raise the price on some goods to increase profit margins.
Nice Link brought in more than a dozen new groups from Vietnam that would fall roughly 10% below similar China product when factoring in 25% China tariffs on certain pieces. But buyers also were interested in the company’s quality story out of China given its history of sourcing product there. With some items falling outside the HTS codes on goods facing China tariffs, the company was also able to offer some competitive prices on its China groups, too.
But while Carlson noted that many retailers have seen a drop in inventories, he predicted that some won’t be ready to place firm orders until the first quarter, meaning that goods won’t hit retail until next summer. Until then, it’s offering retailers the best values on goods whether from China or Vietnam to spur business.
“The ones that are committing are saying we will probably order this in the January, February or March period, so we’re looking at the summer 2024 to the fall,” he said at market. “They are taking their notes and are shopping. … There’s no rush for anyone right now.”
He noted that one retailer that came through the showroom expressed an interest in a sectional, wanting total distribution in their market. And while they are committed to the item, Carlson noted, they probably won’t write an order until early next year.
“With everyone that is coming through here, generally the lag is three to four months,” he said, of getting actual orders from some customers. “It’s a process. And there is a lot of follow up, but nobody I know of is writing containers at market.”
Some of the reluctance to place large orders at market could have to do with retailers’ reluctance to rebuild inventory after having whittled it down in recent weeks and months. They also are likely to want to make sure they are buying the right product having seen so much at market.
Bob Bruns, president of Cozzia USA, said that the company has been focused on programs and promotions that dealers can benefit from, starting with its Labor Day promotions in September and are continuing for the balance of the year and beyond.
“We have launched our new promotional calendar for the next six to 12 months, depending on which brand we have,” he said of the Cozzia, Svago and Ogawa brands. This includes allowing the dealer to run premium chairs in the line at $500 off or reducing the overall cost “to make sure their margins are whole,” Bruns said. The company also has offered an entry-level-priced Cozzia chair that had an MSRP of $3,999 so dealers can promote it at $1,999.
“We had some tremendous success on both those promotions over Labor Day and got a nice lift and had a really good month in September,” Bruns said, adding, “We took that same promotion and made it even stronger for Q4.” He noted that the company also is offering a free extended warranty on Cozzia chairs for November and December, adding two years to the original three years for a five-year warranty for the top-end chairs in the line.
“So then the top-end chair has a $1,200 reduction in price, so when the guest comes in the store, the retail sales associate can offer basically a $1,200 discount on the product during the promotional period,” Bruns said. “So what we’ve done is get a lot more aggressive when it comes to promotional activity.”
Micah Swick, president of Bernards, said that one retailer came in saying that he might have to renege on some of his prior commitments after seeing the company’s nearly 70-piece Assemblage collection designed by Stephanie Lena.
“We are not doing any discounting because we are priced so sharply,” Swick told Home News Now at market, noting that he encouraged dealers to take advantage of some of his competitively priced goods to make money. “Our retailers have been really shocked at what we are offering, the values. … I said ‘guys, do me a favor, don’t you dare price based on my price. Go make money. I want to be your favorite, favorite, favorite supplier.’”
For example, a $250 FOB console table could easily retail at $499 retail, giving the dealer a decent margin, Swick noted, but could also retail even higher, perhaps up to $799 given the look.
He also encouraged dealers to write orders at market, using its eclectic presentation to give them ideas on how to show various vignettes on their floor. He said this is important, particularly given the size of the collection and the variety of pieces.
“The group is so big that you have to help the customer understand what they are looking at — it’s got to be easily remembered. So we are writing and getting commitments. Midsized to small dealers are writing orders. … If something is hot, we will protect you and you will get distribution. Or you can wait and the next guy comes in and gives me an order. I have got to follow the money so we are writing orders.”
While Best Home Furnishings offered some promotions at market, they weren’t anything out of the ordinary.
“We haven’t done anything different,” Greg Sicard, vice president of sales and marketing, told Home News Now at market, noting that attendance was up 20% through Sunday of market compared to last October. “We have a lot of new products in all categories — recliners, and motion and stationary. It’s just been well received. Dealers are looking for new product and we have quite a bit.”
In addition to offering a wide mix of product, the strategy also was about getting the products out into the marketplace as quickly as possible, an incentive to those dealers wanting to update their floors sooner versus later. For example, Best had new goods going into production on Monday of market, based on orders written at the event. And while the company was awaiting shipment of new lift mechanisms for its new lift chairs, Sicard said that production will have started by mid-November on everything new that it was showing at market, meaning that product will ship before the end of the year, with turnaround times as little as five days.
“We have always been that way and we pride ourselves in that what we show at market we can build immediately,” he added. “So even for us to be a month late kind of frustrates us a little bit.“
Based on positive dealer response at last month’s premarket, Universal Furniture has also already begun a first cutting on new products shown in its largest introduction to date, with 198 SKUs between case goods and upholstery in its Modern collection.
“We had such a good response to it at premarket, we issued a cutting with the factory right after premarket, as opposed to waiting until now,” Sean O’Connor, president, told Home News Now at market.
With production taking place at the Vietnam factory of company parent Samson Holding, he said that a key goal was to be able to get the collection shipped before the Tet holiday which starts around Feb. 9. Then as that product starts flowing, it could begin layering in a second and third cutting and keep the product flowing into the spring and summer months.
“So our goal is to try to have it hitting the warehouse by the end of the first quarter versus waiting until the middle of next year,” O’Connor added. “Because with the Tet holiday and Chinese New Year … we are hearing that factories are closing for extended time periods, and we wanted to jump ahead of that. And because they are closed for the month of February — our next opportunity is March by the time it’s made and then March becomes April and then it gets on the water. So you’re looking at June before you even have it in the warehouse and July before it is on the stores’ floors and then you’ve lost half a year.”
Luxury case goods and upholstery resource Sarreid Ltd. also had one of its largest introductions in memory with some 200 SKUs shown across both segments. While a small number of pieces didn’t make the final cut, the company is making sure it has an in-stock position on the vast majority of the new items, making sure that dealers and designers alike have immediate access to the mix.
“I want us to be fully loaded in 2024,” said President and CEO Brad Cates. “I know the economic winds are probably not moving in the right direction, but we want to be fully prepared to support that higher-end designer and retail business with an in-stock position.”
He added that the company also offers some promotions but those typically fall around major holidays such as President’s Day, Memorial Day and Labor Day.
“We offer a line-wide type of stimulation, but we try to focus on in-stock product because we know from watching the consumer, listening to our designers and listening to our retail partners that it’s very, very much about investing in stock. I mean Amazon has changed the world. We don’t want to wait for anything. … We don’t want to get into a situation where we take an order in October and they have to wait for it to get there and then they have changed their mind. They found something else where it is going to be a cancellation. We are about immediate gratification as a company and immediate gratification focused on a high-end and good-styled product.”
Other companies found their competitive advantage in broadening their lines with new categories such as the new upholstery line offered at Artistica, a sister company of Lexington Home Brands.
“Artistica was really busy and that was a good thing,” said Phil Haney, president and chief executive officer of Lexington Home Brands, noting that the new upholstery line generated a lot of interest among buyers. “It was a new category for that brand and it just really fits the genre and really fits the genre of what Artistica is.”
Haney also said that Lexington had strong market attendance with strong reaction to the newest Barclay Butera collection, Villa Blanca, which features classic hand-carved elements in a fresh new lightly distressed finish called Polo Mallet White.
“It’s classic styling, and years ago if we did that group with the carvings and the turnings in a dark wood, everybody would have said, ‘well that’s old-fashioned furniture.’ But as soon as you take it white — or I could have done it in black — it just changes it and gives it a little more of today’s look in that finish. … It’s really a soft finish — it’s not a shiny bright white or a refrigerator white. It’s got a lot of richness and depth and if you feel it, it’s got a little suedelike feel to it. And I think that’s made a real difference.”
While he said that the look may not do as well in the New England area, he believes it will sell well in “the whole Southern U.S., where the coloration works really well.”
Turning the discussion back to the economy in general, he said the furniture industry, particularly the upper end of the industry where Lexington resides, has been impacted by travel in recent months, a reversal of the time during the early Covid years when many people stayed at home investing in new furnishings. That largely has shifted in the past 12 months or more as more people spend money on travel and other forms of entertainment.
“The big thing with us is with the absolute luxury consumer, they are all in Europe,” Haney said. “As soon as things opened up, all the affluent people got on a plane and they are all in London, Rome or Paris or somewhere, but they will be back. … And I think as these consumers now return from these really long extended trips they are going to get back and they are going to say, ‘it’s time to do a little more in the home.’ I think Covid is going to give us that long-lasting attention in the home that we haven’t had for years. This has kind of refocused it.”
Hooker Furnishings also took the opportunity this year to expand into new categories. In addition to new collections throughout its line, from Hooker case goods and upholstery to new domestic upholstery in its Bradington-Young and HF Custom brands, the company also had a generous offering of product in its Samuel Lawrence and Pulaski brands, giving customers a wide range of goods at good, better and best price points. It also offered a new artistic and eclectic assortment of furniture and accents through Bobo Intriguing Objects, which it purchased earlier this year and also through new categories such as the dining collections added to its M division, along with a mix of new occasional and upholstery.
“We are going to focus on product as we always have, and we are going to focus on customer relationships and we are going to make sure we are doing everything we can that’s within our control,” said Jeremy Hoff, president and chief executive officer of Hooker Furnishings. “Right now, there’s a lot to be concerned about in the world, and candidly to pray about. … So all we can do is pray about those situations and hope they get better. But you really can’t control it. What we can do is compartmentalize, prioritize and focus and that’s what we are trying to do.”
