November 3,
2008 by in UnCategorized 
By Home Furnishings Business in on November 2008
Retail orders for new goods from furniture vendors and factory shipments both fell 16 percent in August from the same month last year, the third month in a row of double-digit drops in orders. That’s according to the October edition of Furniture Insights, the monthly survey of furniture manufacturers and distributors from the High Point accounting and consulting firm Smith Leonard.
August order levels pushed the year-to-date decline up to 10 percent for the first eight months. Some 86 percent of
the participants have reported lower orders than the first eight months, and word on the street at High Point was not to expect significant rebounds in orders in September and October.
While August shipments outpaced July’s by 8 percent, that is somewhat normal with the normal three week work month due to the holiday in July. Year-to-date, shipments declined 9 percent from the same period a year ago. As with orders, some 86 percent of the participants are reporting lower shipments than last year, with several down significant double digits.
Backlogs also were down 16 percent from last year and were down 7 percent from July. Backlogs are at seriously low levels.
Receivable levels fell 6 percent from August 2007. While not far off from year-to-date shipments declines of 9 percent, the
decline is not as much in line with the last two months declines in shipments.
“We know there is some extended dating going on, but we are also hearing a lot about delinquent payments from retailers,” wrote Smith Leonard Managing Partner Ken Smith of receivable levels.
August inventory levels fell 4 percent from last year’s levels and were even with July levels. The 4 percent decline was the same as the decline reported in July.
“We suspect that with orders continuing to decline, inventory levels may be a bit high,” Smith wrote.
The number of factory employees fell 3 percent from July bringing the total number compared to last year down to a 13
percent decrease. This decrease was up from a 10 percent decline in July and 9 percent in June.
Factory payrolls in August were 18 percent below August 2007, up from 10 percent last month. Factory payrolls were up 13 percent over July but that increase was due to the shutdown for most companies over the week of the 4th of July.
In summary, Smith noted that the October report’s statistics don’t reflect current conditions.
“October has not been good to the nation in general with the whole financial mess we are in – including the stock market, banking relations and just about all the areas in the financial world,” he wrote. “At least the last week of October brought overall good news to the stock market. The market started the week at around 8,300 and finished off the week at 9,325. According to Bloomberg, this was the biggest weekly gain since 1974. October saw the largest drop in the S&P 500 since 1987, but the rally at the end of the month was certainly some good news among all the bad we have been hearing.”
Smith said the October High Point Market seemed to beat most exhibitors’ low expectations, which admittedly were low, but that orders, which normally drop at the beginning of the month, fell more so than usual.
“We are very concerned over the credit situation for both retailers and manufacturers and distributors,” Smith wrote. “In the good ole days, when the economy was tough, we could talk to the bankers, who understood the big picture and were willing to work with companies until overall business conditions improved. Unfortunately, that is not what we are seeing today. We hope that the government will put pressure on the banks to take some of the money they are putting into the system and push the banks to loosen up. Otherwise, we believe they will force some companies into bankruptcy that really do not need to be there.”
Smith did note good news: lower gas prices, and the end of negative campaigning after the national elections end.
“That has got to help consumer confidence,” he wrote. “When you can’t turn on the TV or radio without hearing everything that is wrong with the nation, the economy and anything else you can think of, it has to bring everyone’s confidence down (mine included). We’ve got a lot to fix in the nation before we will see a good deal of improvement in the furniture industry. Most likely, not all will survive. But for those with staying power, we believe that when times do get better, those survivors will do well. We just need to make sure our bankers understand that.”
November 3,
2008 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on November 2008
According to published reports, Albuquerque, N.M.-based American Home has filed for Chapter 11 bankruptcy protection as part of a restructuring effort.
The company, which has five stores in New Mexico and six in Arizona, released a statement in which it said it’s being affected by the housing downturn and tightening credit policies, according to an Associated Press report. The Daily Courier of Prescott, Ariz., also reported American Home’s filing, but court records could not be immediately found to verify those reports.
The Associated Press report Tuesday cited a company press release that stated the company has no plans to shut stores or reduce its 650-person workforce. American Home reportedly shut a warehouse location in the Tucson area in September.
November 2,
2008 by in UnCategorized
By Home Furnishings Business in Case Goods on November 2008
Executives at Furniture Brands International, which reported a $41.7 million net loss last week, said additional job cuts are planned as the company moves to bring expenses in line with decreased sales.
In a conference call with industry analysts, Chairman and CEO Ralph Scozzafava said planned cutbacks include corporate expenses and a reduction in the company’s employee base.
“Our non-production costs don’t match our projected sales levels, and we’ll make cuts in the coming months to lower those costs,” he said, adding that staff cuts had already been planned as the company phases in more shared services rather than continuing to have the company’s various brands run certain functions individually. “Right now, some functions have duplicate staffing, and those redundant legacy programs will begin to close out in the fourth quarter as our shared services are beginning to come online in a phased approach,” he said.
He didn’t offer specifics on the number of employees who could lose their jobs during the hour-long call.
The company, which includes well-known brands like Broyhill and Lane, said its third-quarter sales fell 17.6 percent to $413 million compared with the same period last year.
November 2,
2008 by in UnCategorized
By Home Furnishings Business in Bedding on November 2008
Furniture Row’s Denver Mattress Company will donate $20 for every mattress it sells from Nov. 1 through Nov. 27 as part of an event officials said will raise up to $150,000 for more than 50 rescue missions and charitable groups throughout the United States, the retailer announced Friday.
The company will also support its direct donation with an awareness effort on behalf of the missions through newspaper and television advertising during the period. Denver Mattress Company, which manufacturers and sells its own private-label brands, is part of one of the country’s largest, family-owned furniture and bedding retail chains. Furniture Row has more than 330 stores in 30 states.
November 2,
2008 by in UnCategorized
By Home Furnishings Business in on November 2008
• Consumer spending on home furnishings, including furniture and bedding, dipped again in September. Home furnishings spending in September, on an annualized basis, was $407.1 billion, down 0.7 percent from August spending. Measured against September 2007 spending, total spending on home furnishings decreased 2.2 percent.
Spending on furniture and bedding also tumbled in September, down 7 percent from this time last year to $79.2 billion. Compared with August spending, consumers spent 1.9 percent less on furniture and bedding in August. September spending on furniture and bedding was at its lowest rate since May of 2005.
The U.S. Department of Commerce tracks consumer spending. Included in home furnishings is virtually everything in consumer homes, including home textiles, consumer electronics, home accents and major appliances. Antiques and valuable art are not included.
• Paralleling September’s sales of existing homes, sales of new houses in September offered mixed results, posting some gains measured against August results, but falling far shy of year-earlier sales.
Overall new house sales in the U.S. increased 2.7 percent in September, to 464,000 houses in a seasonally adjusted annual rate. Regionally, new house sales increased in the South (up 0.7 percent) and West (up 22.7 percent) and decreased in the Northeast (down 21.4 percent) and Midwest (down 5.8 percent).
Compared with September 2007 results, overall sales of new houses plummeted 33.1 percent. All four U.S. regions reported steep declines, down 65.1 percent in the Northeast, 37.9 percent in the West, 37.5 percent in the Midwest and 23.8 percent in the South.
Reflecting the opposite of September’s increase in new house sales, the supply of new houses available for sale, measured in the median number of months on the market, decreased 8.8 percent to 10.4 months in September, compared with August. Measured against year-earlier numbers, the supply of new homes on the market was up 10.6 percent. New house sales are tracked by the U.S. Dept. of Housing and Urban Development and the U.S. Census Bureau.
Weekly Review of Economic News (WREN) reports are summaries of recently-released economic statistical data that affect the home furnishings industry. WREN reports are compiled by HFB Research Editor Janice Chamberlain.