Vendors, Retailers Share Issues, Novosel Tells Gathering

March 26, 2007  by in UnCategorized   

By Home Furnishings Business in High Point on March 2007 Furniture retailers will face the same pressures from Asian-owned companies as their counterparts on the vendor side did when North American manufacturers faced competitive pressures from the East.

That was one of the opinions Dennis Novosel, president and founder of Stoney Creek Furniture in Stoney Creek, Ont., shared with members of the North Carolina Furniture Export Council at their regular High Point Market breakfast meeting Tuesday.

“In my mall, I just rented a space to the first Chinese retailer in our area,” Novosel told the group, referring to a 250,000-square-foot design mall he owns in addition to Stoney Creek and Ashley Homestore locations. “They already have four or five stores elsewhere, and they own their own factories (in China). ... We’ll see more of this, and it’s going to be a complicated issue.”

Novosel, who just got back from three weeks in China and Vietnam and a pioneer among Canadian retailers importing directly from China, told the vendors that direct sourcing is far more open than not too many years ago.

“The first time I went over in the ‘80s as a single-store retailer, I couldn’t really buy a lot,” he said. “On this trip, I can definitely buy there. One of my points to you is we should all be afraid. ... I could be in your business and probably very successful within a six-month period for an investment of $200,000. ... It’s already happening, and it’s happening all the time. What are we going to do as retailers and manufacturers to solidify” relative to such competition.

One thing vendors can do is maintain the integrity of their brand when it comes to distribution.

“Don’t demand, demand, demand, and then go outside your normal distribution--I do not believe manufacturers can play in all the distribution channels,” Novosel said, adding that vendors should weigh the effect on long-term business of short-term sales gains. “Those of us who have beautiful stores and present the product properly will find other vendors ... Our options are a lot different than before.”

Novosel also gave a Canadian perspective on the Las Vegas Market relative to High Point.

“After attending High Point for 25 to 30 years ... and Las Vegas for a couple of shows, I see a change,” he said. “My opinion is that as North Carolina manufacturers and North Carolina distributors, your strength will come from the East (in Canada). My Canadian compatriots in the West are buying into the Las Vegas Market, and also buying into West Coast manufacturers and distributors. Las Vegas is easier for them to get to.”

When asked about his activity with Ashley stores, Novosel pointed to the vendor’s logistical excellence.

“The Ashley model is something most manufacturers should be analyzing a lot,” he said. “The Ashley model is not about getting (inexpensive) furniture, it’s about logistics. ... It’s the best logistics company I’ve ever found.”