September 11,
2006 by in UnCategorized 
By Home Furnishings Business in Motion Upholstery on September 2006
Upholstery producer Berkline/BenchCraft has decided not to move forward with a planned initial public offering.
The company, which had filed paperwork to start the process in April 2005, pulled its documentation about six weeks ago. Bill Wittenberg, president and chief executive officer, said this morning that business conditions didn’t warrant issuing the public offering.
“Business conditions really didn’t improve, and we had a lot of sensitive information out there that anyone could have gotten their hands on,” he said, adding that business needs to improve and consumer confidence needs to shift before the company would reconsider.
“The timing just isn’t good, so we decided to get it out of the public domain,” he said.
The company also requested withdrawal of its debt rating with Moody’s Investors Service. Berkline/BenchCraft’s lenders no longer require the debt rating.
Wittenberg said if the business climate changes, the company may decide to revisit the possibility of an IPO.
“If things improve, we can always go through the process again,” he said. “Conditions were much better back in April ‘05.”
September 10,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on September 2006
Marlo Furniture is marking its 50th year in business with the re-opening of its remodeled Alexandria, Va., store this week.
A mainstay in the Washington, D.C., market since 1955, the retailer just completed a $2.5 million renovated.
“I grew up in this business, and I understand that consumers today are savvy, and style and value conscious,” said Neal Glickfield, president of Marlo Furniture. “I developed a new concept that speaks to the needs of our customers. My vision for 8-stores-under-one-roof allows my customer the convenience of finding the perfect furniture for their home and at affordable prices. I put fun back into shopping for furniture.”
Glickfield said there’s something for everyone.
“We have included a variety of new designers to enhance our existing product line,” he said. “Our buyers travel the four corners of the world for new and exciting pieces, and because we buy direct, we pass the savings to our customers.”
September 10,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on September 2006
Rooms Express will open a store Thursday in La Quinta, Calif.
The 35,000-square-foot store will feature the Rooms Express showroom and a Legacy Gallery Designer showroom.
Linder’s Furniture, Rooms Express parent company, is opening the store in response to the growing community.
“We couldn’t think of a better location for our new store,” said Eric Foucrier, president of Linder’s Furniture. “The chamber of commerce and the City of La Quinta have really applauded our efforts. This has been a great partnership, and the reception from the community has been outstanding.”
To commemorate the event, Linder’s Furniture is hosting a grand opening celebration that includes fun, food and music Thursday. In addition, the retailer will be giving away 50 rooms in 50 days. The giveaway starts Thursday.
“This is the biggest furniture giveaway in industry history,” Foucrier said. “We’re literally going to be giving away more than $100,000 in furniture to the public.”
September 10,
2006 by in UnCategorized
By Home Furnishings Business in on September 2006
Orders for residential furniture of $2.3 billion in June 2006 and shipments of $2.4 billion were about even compared to the same month last year, according to BDO Seidman’s monthly analysis of furniture industry activity. While June order levels were even with May, shipments rose 6 percent.
Year-to-date, new orders remained about even with last year’s first half. Through six months, shipments remained about even with last year’s levels at the same point. With June shipments exceeding orders, backlogs fell 3 percent from May levels, but were slightly higher than June 2005 levels.
Factory receivables for June this year were down 1 percent from June 2005 levels and also down 1 percent compared to May 2006.
“As we have noted before, receivables seem to be in pretty good shape compared to shipments,” said Ken Smith, managing partner of BDO Seidman’s High Point office and director of its Furniture Industry Services group. “We know there are a few customers out there that are struggling with slow sales at retail, but it appears that most manufacturers and distributors are keeping a close eye on their customers.”
Inventories increased 2 percent over May, but were even with June of 2005.
“As with receivables it appears that inventory levels are in pretty good shape overall,” Smith said. “Having been burned in the past by not cutting back production, it appears that most are doing all they can to manage inventories.”
Factory payrolls were down 4 percent compared to June of 2005. This compared to an 8 percent decline in May. Payrolls were up 14 percent compared to May, but this is somewhat normal when comparing May to June as for many, June is a five-week period and vacation pay may also be included for some. Year-to-date, payrolls are down 6 percent compared to last year.
The number of factory employees in June was even with May and down 5 percent compared to June 2005. This decline was the same as in May and previous months.
The latest reports from the Bureau of Economic Analysis indicated that the real gross domestic product—the output of goods and services produced by labor and property located in the United States—increased at an annual rate of 2.9 percent in the second quarter of 2006. This was up from earlier estimates of 2.5 percent, but down from the first quarter’s increase of 5.6 percent.
The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE) for services, private inventory investment, nonresidential structures, exports, and state and local government spending that were partly offset by negative contributions from residential fixed investment and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP growth in the second quarter primarily reflected a deceleration in PCE for durable goods, downturns in equipment and software, and in federal government spending, decelerations in exports and in PCE for nondurable goods, and a larger decrease in residential fixed investment. This was partly offset by a deceleration in imports, an acceleration in PCE for services, and an upturn in private inventory investment.
Looking at leading economic indicators, BDO said five of 10 indicators for the Conference Board’s U.S. leading index increased, but overall the index decreased 0.1 percent in July 2006. From January to July, the index fell by 0.7 percent, but it is still 0.9 percent above the July 2005 level. The coincident index increased 0.2 percent and the lagging index decreased 0.1 percent.
Increasing indicators include average weekly manufacturing hours, vendor performance, stock prices, index of consumer expectations and manufacturers’ new orders for consumer goods and materials. The negative contributors—beginning with the largest—were building permits, average weekly initial claims for unemployment, interest rate spread, manufacturers’ new orders for nondefense capital goods and real money supply.
All four indicators of the coincident index increased in July. The largest contributors were industrial production and employees on non-agricultural payrolls. During the six-month period through July, the coincident index increased 1.1 percent.
Only one of seven components of the lagging index advanced, that being the average prime rate charged by banks. The negative contributors were led by average duration of unemployment, and commercial and industrial loans outstanding.
The Conference Board Consumer Confidence Index fell from 106.5 to 99.6 after increases in July and June. The Present Situation Index fell to 123.4 from 134.2, while the Expectations Index declined to 83.8 from 88.9 last month.
“Consumer confidence lost significant ground in August and is now at its lowest level this year,” says Lynn Franco, director of the Conference Board’s Consumer Research Center. “Less favorable business conditions coupled with a less favorable job scenario have resulted in the largest one-month decline in confidence since Hurricane Katrina last year. Looking ahead, the glass remains half empty as consumers are growing increasingly more pessimistic about the short-term outlook.”
Consumers’ overall assessment of current conditions was significantly less favorable in August. Those claiming conditions are “good” decreased to 26.1 percent from 27.3 percent. Those claiming conditions are “bad” increased to 16.7 percent from 15 percent. Labor market conditions were also less favorable. Consumers saying jobs are “plentiful” decreased to 24.4 percent from 28.6 percent, while those claiming jobs are “hard to get” increased to 21.1 percent from 19.6 in July.
According to the National Association of Realtors, total existing home sales fell 4.1 percent to a seasonally adjusted annual rate of 6.33 million. Single-family home sales dropped 5.0 percent to a seasonally adjusted annual rate of 5.51 million. Sales of single-family homes were 11.4 percent below the rate in July 2005.
The median existing single-family home price was $231,200 in July, up 1.5 percent over a year ago. Prices in the Northeast dropped 2.1 percent, while in the Midwest prices fell 0.6 percent, and in the West, prices were down 0.3 percent. The South was the only region where prices increased—up 3.2 percent.
Sales of existing homes fell in all regions compared to last month and last year. Sales in the West were off 18 percent versus last year compared to 7 percent in the South, 12.5 percent in the Northeast and 10.1 percent in the Midwest.
Sales of new single-family homes in July were down 4.3 percent from June according to estimates from the U.S. Census Bureau. These sales were off 21.6 percent from the July 2005 estimate of 1.4 million. It was estimated that there is now a 6.5 months’ supply of new homes for sale based on the current sales rate. Sales of new homes compared to July 2005 were off 42.9 percent in the Northeast; 35.4 percent in the Midwest; 23.4 percent in the West; and 12.4 percent in the South. Privately owned housing starts in July were 2.5 percent below the rate in June 2006 and 13.3 percent below the July 2005 rate. Single-family housing starts were 2.3 percent below June.
Total non-farm payroll employment increased 128,000 in August and the unemployment rate was little changed at 4.7 percent according to the Bureau of Labor Statistics. Payroll employment grew notably in education and health services while several other industries had modest increases.
The number of unemployed persons, 7.1 million, was essentially unchanged. A year ago, the number of unemployed persons was 7.4 million with an unemployment rate of 4.9 percent.
Advance estimates released by the U.S. Census Bureau indicated that U.S. retail and food services sales, adjusted for seasonal variation and holiday and trading day differences, increased 1.4 percent over June 2006 sales and were up 4.8 percent from July 2005.
Retail trade sales were up 1.5 percent from June and 4.5 percent over July a year ago. Gasoline station sales were up 19.2 percent over July 2005 and sales at non-store retailers were up 15.6 percent.
Sales at furniture and home furnishings stores in July were up 0.5 percent over June. Year-to-date, sales at these stores were estimated at 9.7 percent higher than the first seven months of last year.
Energy costs, which declined 0.9 percent in June, advanced 2.9 percent in July. Within energy, the index for petroleum-based energy increased 5 percent and the index for energy services rose 0.1 percent. The food index increased 0.2 percent in July. The index for all items less food and energy rose 0.2 percent in July, following increases of 0.3 percent in each of the preceding four months. A sharp drop in the index for apparel was largely responsible for the smaller increase in July.
During the first seven months of 2006, the index for energy, which rose 17.1 percent in 2005, advanced at a 25.3 percent SAAR in the first seven months of 2006. Petroleum-based energy costs increased at a 52.8 percent annual rate while charges for energy services fell at a 2.5 percent annual rate. The food index has increased at a 2.1 percent SAAR thus far this year, following a 2.3 percent rise for all of 2005. Excluding food and energy, the CPI-U advanced at a 3.1 percent SAAR in the first seven months, following a 2.2 percent rise for all of 2005.
According to the U.S. Census Bureau, new orders for manufactured durable goods decreased 2.5 percent in July compared to June. This followed two consecutive increases, with June up 3.3 percent. Transportation equipment had the largest decrease at 10.1 percent.
Shipments of manufactured durable goods decreased 1.3 percent also after two consecutive monthly increases. Again, transportation equipment had the largest decrease at 6.7 percent.
Shipments of furniture and related products decreased 2.1 percent on a seasonally adjusted basis. Compared to last year, July shipments were 2.3 percent ahead. Year-to-date, shipments were up 6.8 percent over the first seven months of last year.
“In spite of less-than-stellar results according to our survey, and most of the economic news not being very good, we have heard some reports of business picking up somewhat at retail,” BDO’s Smith said. “On the other hand, listening to the news, the “R” word (recession) is being used as well. This may be more media hype than reality, but it does have an impact on consumer confidence. Hopefully, the hurricane season will be good to us. So far with no serious storms, gas prices have dropped at least somewhat, although remaining at historically high levels. It seems that we consumers have almost taken for granted that we will not see $2 gas, at least anytime soon.”
BDO’s report said news from the war in Iraq and the threat of terrorism continues to drain consume confidence.
“Many of you have complained that we don’t say very much about positive current industry news as it relates to sales,” Smith said in the BDO report. “As I have told those who mention that to me, please give me some positive news to write about and we will certainly share that information. In the meantime, as the summer season slowly fades away and vacations are over, hopefully worries about expensive gas cutting into vacation budgets will now be gone. And maybe, some of those who didn’t go this year saved some money to buy some furniture.”