Daily News Archive
Brought to you by Home Furnishings Business
October 31,
2007 by in UnCategorized 
By Home Furnishings Business in on November 2007
In late September, many consumers and businesses alike were surprised when the Canadian loony began trading on a nearly one-to-one basis with the U.S. dollar. The one-dollar coin, nicknamed in recognition of the bird emblazoned on it, has strengthened in the past five years to a position where Canadian consumers are finding U.S. goods and services at very attractive prices.
At the end of 2002, one U.S. dollar had the purchasing power of 1.58 Canadian cents. At the end of 2006, the exchange rate was C$1.17 equaled one U.S. dollar. For U.S. and Canadian consumers alike, the movement of the U.S.-Canadian exchange rates could have profound effects on the home furnishings market.
In that five-year period, the purchasing power of the U.S. dollar in Canada dropped by 26 percent. Simply put, that means that U.S. consumers and businesses alike find the prices of Canadian goods more expensive, while U.S. businesses find it easier to sell their goods into Canada.
One reflection of the strengthening of the Canadian dollar is the influx of Canadians looking to purchase homes in the U.S. Pacific Northwest. In an area, like many others in the U.S. where home purchases are off, the “invasion” of the Canadians is a welcome sight to developers and others looking to sell homes. For Canadians, the strength of their dollar means pricey U.S. homes may no longer be out of reach.
U.S. exporters, naturally, favor a weak U.S. dollar, making their goods less expensive for Canadians, while importers are facing a costlier market. One good example is the changing price of paperback books. Books that were printed several years ago might have the following prices stamped on their covers: US$6.95, C$9.95. These prices reflected contemporary exchange rates.
It’s not just the Canadian-U.S. currency exchange rates that have traders taking careful stock of the markets. At the end of 2006, the U.S. dollar had lost 40 percent of its exchange rate with the Brazilian real. Measured against the Australian dollar, the U.S. dollar was off 29 percent in the same period.
The currencies of other countries have also weakened or strengthened, usually the result of local economic factors or financial policy. But with rare exception, the U.S. dollar has been on the weakening side of the equation.
In the 12-month period from June of 2006 to June of this year, the U.S. dollar has lost ground against many of its trading partners in the furniture industry. Double-digit weakening was experienced in Canada, Brazil and Thailand.
Matched with import and export data, these exchange rate fluctuations can present exciting opportunities for home furnishings vendors on both sides of the U.S. border. For instance, U.S. bedding exports to Australia for the first six months of 2007 were up more than 71 percent, compared with the same period in 2006, according to data from the U.S. Department of Commerce and the International Trade Commission.
How much of that import increase is directly attributable to the strengthening of the Australian dollar against its U.S. counterpart isn’t easy to determine, but the change in the currency exchange equation had to help—maybe a lot.
On the other hand, Japanese imports of U.S. bedding for the first half of 2007 fell nearly 21 percent compared with year earlier figures, as the U.S. dollar gained eight percent against the Japanese yen for the same period.
Over more than a decade, more and more U.S. manufacturers have established themselves overseas, developing outsourcing strategies that allow them to successfully compete in a global economy. A weak U.S. dollar overseas means that goods produced domestically may be less costly than foreign-produced products, giving domestic producers an edge here at home.
On the other side are retailers who have gone heavily into direct importing. They may be more interested now in domestic producers, since currency exchange rates now favor them.
The bottom line is that consumers looking to buy home furnishings are almost always basing a large part of their purchasing decision on price. Customers have been trained over recent years to expect low prices on home goods, and they still expect those purchases to be of acceptable quality and last for a long time.
What are savvy retailers and vendors to do? Make sure that you’re getting the best product for the price, whether that product is made in the U.S. or overseas. Know the value of currency exchange rates and how they can affect your business. And, most of all, develop relationships with your suppliers so they can count on you when you’re counting on them.
October 30,
2007 by in UnCategorized
By Home Furnishings Business in on October 2007
The Consumer Confidence Index fell to 95.6 points in October, off 3.9 points from September’s 99.5 points (1985=100). This is the third monthly decline in a row for the Index. Also decreasing was the Present Situation Index, off 2.4 points to finish at 118.8 points and the Expectations Index, which fell to 80.1 points from 85 points in September.
Six-month buying plans results were mixed, with October figures showing 2.7 percent of consumers planning to buy a home, measured against 3 percent in September and auto-buying intentions increasing to 6.6 percent of consumers from 5.3 percent last month.
Consumer confidence was identified as the number one measure of how the economy was performing by respondents in Home Furnishings Business’ exclusive economic survey, published in the October issue of HFB.
“Consumer Confidence posted its third monthly decline and continues to hover at two-year lows”, said Lynn Franco, director of the Conference Board’s Consumer Research Center. “Further weakening in business conditions has, yet again, tempered consumers’ assessment of current-day conditions and may well be a prelude to lackluster job growth in the months ahead,” she added.
“Consumers are growing more pessimistic about the short-term future and their rather bleak outlook suggests a less than stellar ending to this year,” Franco stated.
The Consumer Confidence Survey is based on a representative sample of 5000 U.S. households. The cutoff date for October’s preliminary results was October 23.
October 30,
2007 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on October 2007
Tre Amigos Furniture and Accessories, a fast-growing retailer based in Tucson, Ariz., has shut four stores in Phoenix in order to concentrate on more productive stores in its home market and its e-commerce site. The company sells rustic furniture and other home furnishings products.
Keith Kramer, a co-owner of the 8-year-old chain, said the company will shut a fifth Phoenix store and its distribution center there by the end of the month to focus on four more productive stores in Tucson.
“With current market conditions, we’ve done our very best to keep all of our stores open, but it’s gotten to the point where we have to cut our deepest losses, and that’s the Phoenix market,” he said.
Kramer said a downturn in the real estate market coupled with homeowners taking on fewer renovation products has led to a sales slump that’s more severe than previous “blips” in the home furnishings market. He said the company’s Internet sales remain healthy as do stores in Tucson where advertising and leasing costs are significantly lower than in Phoenix.
“These things happen,” Kramer said. “I’m going to work a little harder, roll up my sleeves a little higher, and we’re going to make this work. ... We’re going to be better for it when it’s over.”
October 30,
2007 by in UnCategorized
By Home Furnishings Business in Youth, Juvenile Furniture on October 2007
Montreal-based Dorel Industries, which produces juvenile products and various types of furniture, said Tuesday that revenue and net income were up slightly in the company’s third quarter.
Dorel, the parent company of Ameriwood, said sales for the quarter totaled $440.1 million, up from $436.3 million in the same period. Net income also rose slightly to $26.4 million from $25.1 million in 2006.
In home furnishings, revenue decreased 14.5 percent to $122.1 million, and adjusted earnings fell 28.3 percent to $9.3 million. The company said a restructuring program at Ameriwood, which manufacturers ready-to-assemble product, is contributing to a profitability improvement in the home furnishings sector.
“We are very pleased with the most recent quarter and are particularly encouraged that our juvenile segment is maintaining the overall growth pattern of the past three years,” said Dorel President and CEO Martin Schwartz.
October 29,
2007 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on October 2007
Maria Yee, Santa Cruz, Calif., announced Monday that it will reduce the shipping costs of its customers by up to 40 percent after successfully petitioning for its BambooTimbre products to be placed in a lower-cost freight class.
In a year in which sales of Maria Yee’s BambooTimbre home furnishings increased by nearly 50 percent, the company petitioned the National Motor Freight Traffic Association (NMFTA) to place BambooTimbre in a category separate from other bamboo products. Standard bamboo is typically subject to higher shipping rates due to the potential for damage and the inability of shippers to stack heavier freight on top of bamboo products. The new rates for BambooTimbre go into effect Dec. 22.
Developed as an alternative to hardwood, BambooTimbre exceeds steel in tensile strength, according to Maria Yee, and requires a a five-year growing cycle—a fraction of the 60 years required for many hardwoods.
“Developing innovative products to help safeguard the environment has always been a priority at Maria Yee, and by the steady increase in sales of BambooTimbre products it is clearly becoming a priority for consumers,” said CEO Peter Yee. “The NMFTA’s decision definitely helps consumers reach their green living goals.”