Daily News Archive
Brought to you by Home Furnishings Business
July 5,
2006 by in UnCategorized 
By Home Furnishings Business in on July 2006
The timing of April High Point market had a lot to do with a 13 percent drop in new residential furniture orders in April, compared to last year, and a 26 percent decrease from March 2006.
That’s according to BDO Seidman’s Furniture Industry Services’ monthly report on order and shipment activity.
In 2005, market took place April 14-21, while this year’s event ran April 27-May 4, with the result of much of this spring’s market orders not being included in April results.
Almost 80 percent of respondents to BDO’s supplier survey reported April-to-April decreases in order. Year-to-date, new orders through April were up 1 percent over 2005, but the report indicated that market orders impacted those results, as orders were up 5 percent through March.
Shipments fell 6 percent in April 2006 versus April 2005. Again some of that decrease may have been somewhat impacted by the late market, although not to the same degree. Almost 80 percent of the participants reported a decline in shipments although not to the same extent as orders.
The April decrease in shipments brought the year-to-date shipment levels to about even with the first four months of last year.
April 2006 backlogs fell to 6 percent from March levels and were 3 percent lower than April last year, with the report citing a lower new-order rate and a smaller decline in shipments.
Looking at economic activity and indicators in general, BDO’s report indicated the following:
* The Federal Reserve’s Beige Book summary report indicated that economic activity continued to expand from mid-April to early June, but showed moderation in four districts: Atlanta, Kansas City, Richmond and San Francisco; while the New York district noted increased concerns about the outlook for the second half. Overall, the reports were for the most part mixed.
* Real gross domestic product increased in the first quarter of 2006 at an annualized rate of 5.6 percent, compared to a 1.7 percent increase in the fourth quarter and preliminary estimates of 5.3 percent. The first-quarter increase reflected positive contributions from personal consumption expenditures, exports, equipment and software, and federal government spending. Imports, a subtraction from the GDP, increased.
* The Conference Board’s U.S. leading index decreased 0.6 percent in May, while the coincident index increased 0.1 percent, and the lagging index increased 0.2 percent.
The leading index decline was the third in the last six months. The largest negative contributors were initial claims for unemployment insurance (inverted) and the index of consumer expectations.
* The Conference Board Consumer Confidence Index, which decreased in May to 104.7, increased slightly in June to 105.7. The Present Situation Index decreased to 132.7 from 134.1, while the Expectation Index increased to 87.6 from 85.1 last month.
* Sales of existing homes slipped 1.2 percent in May compared to April to a seasonally adjusted rate of 6.67 million units, and were 6.6 percent below the 7.14 million-unit level of May 2005.
* The national median existing home price was $230,000 in May, up 6.0 percent from May 2005.
* Single-family home sales fell 1.5 percent to a seasonally adjusted annual rate of 5.82 million in May, from 5.91 million in April, and were also 6.6 percent below May of 2005. Sales of single-family homes increased slightly in the South and West, but fell 3.8 percent in the Midwest and 4.2 percent in the Northeast.
* Sales of new one-family homes rose 4.6 percent above the revised April rate, reaching a seasonally adjusted annual rate of 1.234 million according to the U.S. Census Bureau. This rate was 5.9 percent below the May 2005 rate, similar to the sales of existing homes. The median price of new homes sold in May was $235,300.
* Non-farm employment rose by 75,000 jobs in May. The unemployment rate was 4.6 percent according to the Bureau of Labor Statistics. Employment continued to trend up in some service-providing industries and mining, while retail trade and manufacturing lost jobs.
* Retail trade sales were up 0.1 percent over April and 7.5 percent ahead of last year. Gasoline stations were up 21.9 percent over last May, and sales of non-store retailers were up 14.1 percent.
* Sales at furniture and home furnishings stores were 0.5 percent down from April on an adjusted basis, but were 7.4 percent above May 2005. Year-to-date sales at these stores were reported 9.3 percent ahead of the first five months of last year.
* The Consumer Price Index for All Urban Consumers increased 0.5 percent in May before seasonal adjustment and was up 0.4 percent on an adjusted basis.
* Energy costs continued to advance--up 2.4 percent in May. Within energy, the index for petroleum-based energy increased 4.8 percent while energy services fell 0.6 percent.
* New orders for manufactured durable goods decreased 0.3 percent in May. This was the second consecutive monthly decline, and followed a 4.7 percent decrease in April. Excluding transportation, new orders increased 0.7 percent. Excluding defense, new orders decreased 0.1 percent.
* Shipments of manufactured durable goods increased 2.6 percent. Shipments have now been up three of the last four months and marked the highest level since the series changed the basis for measuring in 1992.
* According to the final report for April, shipments of furniture and related products fell 3.6 percent in April from March and were 4.8 percent higher than last April. BDO concluded that “related products” must be doing better than the “furniture” piece of this category. Year-to-date, shipments in this category were reported to be up 8 percent.
BDO’s latest forecast after actual March results indicates a pretty flat first half of the year, even though April was worse than the latest forecast. The second half of the year is expected to improve over last year by about 5 percent. It appears that 2006 is somewhat a reversal of the 2005 results, when shipments were up 5 percent in the first half of 2005, but only up 1.5 percent in the last half. This year, the opposite appears to be happening.
The final results of BDO’s annual operating statistics report indicate that operating profits for all companies reporting fell from 5.26 percent of sales to 3.69 percent. Case goods companies fell about 1 percent while upholstery companies fell about 1.8 percent. Most of the decline in upholstery was attributed to higher material costs as a result of higher costs of petroleum based products caused by the hurricanes.
July 4,
2006 by in UnCategorized
By Home Furnishings Business in Case Goods on July 2006
SLF announced Monday that it has secured 15,600 square feet of showroom space at the on the 12th floor of the World Market Center’s second building in Las Vegas.
That building is set for completion in time for the January 2007 Las Vegas market, when case goods importer SLF will make its Las Vegas debut.
SLF’s successful launch of two new categories this year--home office and youth bedroom--necessitated a big initial commitment in Las Vegas.
“Positive customer reaction to our recent entry into these new product categories prompted us to have a showroom that allows us to showcase existing product lines, along with room to display these new growing categories,” said George Revington, chief executive officer of Phoenix-based SLF.
Las Vegas’ proximity to SLF’s Phoenix headquarters also played a significant role in the decision to show there.
“We are growing our warehouse distribution in Phoenix to accommodate our expanding mixed-container program along with the introduction of a piece-at-a-time order fulfillment,” Revington said. “Accommodating our customers’ growing demands is our top priority, so expanding to Vegas just made sense.”
Babs Blair, director of leasing for the World Market Center, said the new SLF showroom is one of the larger spaces in the showroom complex.
“It has a circular entrance off of the lobby area adjacent to escalators and elevators – a prime spot,” she added. “Our buyer base expects trend-setting companies that exemplify the finest in new product introductions, and SLF is an important company to our growing mix of permanent tenants.”
SLF is a globally integrated, design and marketing company for case goods has three primary divisions--SLF Signature, SLF Select, and SLF Asia.
SLF Signature creates fashion-forward products for upper-middle price-points; SLF Select focuses on bringing value to promotional price points; and SLF Asia is responsible for sourcing, quality and on-time delivery for both SLF Signature and SLF Select products.
July 4,
2006 by in UnCategorized
By Home Furnishings Business in Delivery on July 2006
The third and final phase of regulations for wood packaging materials for products entering the United States goes into effect today.
Those materials include pallets, crates, boxes and pieces of wood used to support or brace cargo, and must meet import requirements, and be free of timber pests before entering or transiting through the United States.
The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) will cooperate with the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) to enforce the regulations.
Starting today, all wood packaging materials (WPM) entering or transiting through the United States must be either heat-treated or fumigated with methyl bromide as outlined in the International Standards for Phytosanitary Measures: Guidelines for Regulating Wood Packaging Material in International Trade. The materials must also be marked with an approved international logo, certifying they have been appropriately treated.
Any goods with non-compliant, unmarked packaging require immediate re-exportation.
APHIS and CBP also will require the immediate reexportation of any marked WPM that is found to be infested with a live wood-boring pest of the families Cerambycidae (longhorned beetle), Buprestidae (wood-boring beetles), Siricidae (woodwasps), Cossidae (carpenter moth), Curculionidae (weevils), Platypodidae (ambrosia beetles), Sesiidae (clearwing moths) and Scolytidae (bark beetles).
Shipments containing WPM that violate the rules may be allowed entry only if the CBP port director determines that it is feasible to separate the cargo from non-compliant WPM. An arrangement to have the noncompliant WPM exported from the United States is required before the cargo can be released to the consignee. All costs associated with the re-exportation are the responsibility of the importer or party of interest.
The first phase of these regulations, which are based on the International Plant Protection Convention standards for WPM, became effective Sept. 16, 2005. The regulations prescribe globally accepted measures to reduce the risk of forest pest introductions via WPM. The United States is one of many countries that have adopted the international standards.
For any questions or concerns regarding the requirements for WPM, visit the APHIS Web site at www.aphis.usda.gov/ppq/wpm/import.html; or call APHIS at (866) 738-8197. International callers who may not have access to the toll-free number may call (301) 734-5346. For additional information on CBP’s enforcement operation, please visit its WPM Web page: http://www.cbp.gov/xp/cgov/import/commercial_enforcement/wpm/.
July 4,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on July 2006
Morris Furniture Co. has raised $50,000 for the Children’s Medical Center of Dayton, Ohio, from its recent vendor-appreciation golf tournament. A matching grant from the Mathile Family Foundation pushed the total contribution to $100,000.
More than 100 golfers, representing more than 72 company vendors and media partners, participated in the event, which resulted in a $45,000 check for the medical center.
“Additional vendor support following the golf outing resulted in an additional $5,000 being raised, for a total donation of $50,000 for this fine organization,” said Larry Klaben, president and chief executive officer of Fairborn, Ohio-based Morris Furniture Co. “The support from our vendors and media partners has been outstanding. The Children’s Medical Center of Dayton is the region’s premier children’s hospital and our community will benefit from the generosity of our vendor partners. This non-profit organization serves our entire community with no child ever turned away.”
Morris also presented vendor-appreciation awards during the two-day event, which included an awards dinner as well as the golf outing, which took place at the NCR Country Club, in Kettering, Ohio, which hosted the 2005 U.S. Senior Open tournament.
The awards presentation was held at Morris newly expanded distribution center.
Jack Gilberg of Berkline was named Sales Representative of the Year.
“Jack was selected because of his dedication, strong work ethic and industry background,” said Morris Furniture Merchandiser Deb Linkhorn. “He is constantly working for his dealers. He diligently works hard to make Berkline one of our top resources.”
Leather Italia U.S.A. was named Vendor of the Year.
“Leather Italia U.S.A. has exceeded their promises and has provided us with outstanding values and great delivery,” said Mike VanAutreve, vice president of merchandising for Morris Furniture.
Flexsteel Inds. received the Partnership of the Year award.
“Morris has been doing business with Flexsteel for over 40 years,” Klaben said. “Flexsteel has changed with the times and continues to provide Morris with quality products, great sales tools and ideas to help us grow our business. Todd Yoder (Flexsteel’s Northeast sales manager) and (sales representative) Larry Olson continuously demonstrate how a manufacturer and partner retailer can work together to achieve sales success in a true partnership.”
Morris Furniture Co., owns and operates two Morris Home Furnishings stores. The company also has two Ashley Furniture HomeStore locations in the Dayton area; two Cincinnati-area Ashley stores; and Ashley store in Columbus. Morris also operates the Dayton area’s only Thomasville store in Centerville, Ohio; and Midwest Clearance Outlet in Fairborn.
Additional store openings are planned in current trading areas.
June 30,
2006 by in UnCategorized
By Home Furnishings Business in Customer Service on July 2006
Home Furnishings Business asked some furniture retail salespeople to share their stories in the hope that their experiences might offer insights on dealing with customer dissatisfaction.
We talked with sales associates from three retailers representing a variety of store types and geographic regions: an independent retailer in the Northwest, a North Carolina “big box” and a contemporary specialist in the Mid-Atlantic.
Retail sales staff represent the front line of overcoming consumer objections and dealing with problems. Not surprisingly, a common thread emerges from these three stories—the need for clear and ongoing communication with consumers.
If you’d like “Tales From the Sales Floor” to be a regular feature in the magazine, e-mail Senior Editor Powell Slaughter at pslaughter@napco.com.
Be prepared to help out with your sales staff’s own stories.
As a publication for and about furniture retailers, the thought is that our readers will benefit from the object
lessons their colleagues have to share.
Here’s a lesson where a store owner backed up a sales associate in need of support with a problematic order.
Sherry Needles has been a sales and design consultant at Furnitureland South in Jamestown, N.C., for 16 years, and her husband, Todd, for 18 years. A graduate of High Point University’s home furnishings marketing program, Needles has rung up at least $1 million in sales every year.
Three years ago, Needles received an e-mail through Furnitureland South’s Web site from a potential customer who wanted to completely furnish a new 12,000-square-foot home in New Jersey. The wife, who was six months pregnant at the time, her husband, mother-in-law and two children, ages one year and two-and-a-half, spent all day at the store for a week, and ended up placing an order for around $300,000.
Part of the package was for a large outdoor kitchen and patio, and when the furniture arrived a granite table top for that area was broken.
“When one of those big stone tops comes through the warehouse, we typically don’t open that carton unless something’s obviously suspicious,” Needles said. “The suppliers use impeccable cartoning for that type of piece, and you stand a better chance of damaging it if you open it, inspect it, and re-pack it.”
Typically, the retailer opens and inspects around 90 percent of the goods coming through the warehouse, with the exceptions being items such as those stone tops where tampering with packaging can increase the chance of damage.
Furnitureland South ended up sending three granite tops in all—all arrived at the customer’s home broken—before the customer decided to go with another table.
“She also chose new chairs, and when I called the vendor, I was told the finish and fabric had been discontinued, but they assured me we could still get what my customer wanted,” Needles said. “When the chairs got to the customer, the fabric was the same pattern, but it was blue instead of taupe, and the finish was nothing like the original.”
The manufacturer “was not cooperative,” Needles recalled. Furnitureland South eventually bit the bullet on $15,000 worth of patio furniture for the customer and started over. Fortunately, winter had arrived, and the family wouldn’t be using the patio a lot anyway.
“I’m from New Jersey myself, so we’d developed a good rapport from the get-go,” she said. “They were very patient, and we let them keep the furniture that was there so they’d have something to use. They were understandably angry, but they didn’t blame Furnitureland South or me. I was more of a sounding board for them to vent.”
Furnitureland South ended up doing an in-home exchange.
“What I did, which I’d never done before, I went directly to Mr. Harris (Furnitureland South’s founder Darrell Harris), and said, ‘I need your help,’” Needles said. Harris and Needles worked with the customer and supplier to resolve the issue.
“My sales manager and I went to the warehouse before the last delivery to make sure every piece—30 pieces of outdoor furniture—was right,” Needles said. “We personally uncartoned and inspected every single piece.”
It was a happy ending.
“That customer has since ordered more furniture from us, and they’ve referred a number of people to me,” Needles said. “Their neighbor bought 16 barstools from me.”
Mike Orr, a sales associate at Gates Home Furnishings in Grants Pass, Ore., represents his family’s fourth generation in the business. Orr has been at Gates for 13 years. With strong back-up in the warehouse, and even a lot of the floor not nailed down, Gates has been highlighting same- and next-day delivery.
That comes at a price for customers, though, and that raises a common objection for Orr.
“My biggest problem with customers is that we had free delivery for what seemed like forever,” Orr said, noting that Gates Home Furnishings has been in business for 60 years.
In the past year, though, Gates instituted a $49 fee for regular delivery, $59 for next-day; and $69 for same-day delivery on orders closed before 2 p.m. for customers in Josephine and Jackson counties, Oregon.
Issues arose, Orr said, when long-time customers complain about delivery prices—it’s not much of a problem with more recent arrivals.
“I’ve had people who moved up from California tell me they can’t believe that’s all we’re charging for delivery,” he said. “We have customers who’ve been coming here for decades, though, and we’ll give a discount for seniors, a $20 flat rate. Those delivery charges are a lot more of an issue for our older, long-time customers.”
Another policy that allays customers’ objections to delivery fees is that Gates offers a two-week in-home “trial period” for delivered goods. Communication on the promotional end also has helped, Orr said.
“We lay out very clearly in our ads what the expectations are,” he said.
Fees for upholstery protection programs are another common objection Orr encounters on a regular basis. Gates Home Furnishings has effectively overcome that buy offering a store credit for unused fabric protection.
“If they haven’t used that protection plan after two years, they get a store credit for what they spent,” Orr said.
Consumer misunderstanding of industry-speak can lead to problems—after all, what in heck is an occasional table? Upholstery is another term that can cause confusion for those outside the furniture business.
If a consumer sees an upholstered dining chair that’s part of what the industry calls a “case goods” collection, they still see a piece of upholstered furniture.
Cameron Poindexter has worked in sales for nine months at La Difference in Richmond, Va., which sells contemporary home furnishings out of a 45,000-square-foot showroom. While still fairly new to the business, she got a first-hand look at how consumers and the furniture industry sometimes don’t speak the same language.
“There’s a particular customer that seeks us out; here in Richmond, we really rely a lot on word of mouth, so you want people to have a good experience,” Poindexter said. “Two guys had decided to create a home for themselves. The first time they shopped our store they didn’t buy. We’re constantly sowing seeds, and they’d received a card in the mail that was promoting our upholstery being on sale.”
The customers picked out a pair of upholstered dining chairs, and balked when they discovered the items weren’t part of the store’s sale on upholstery.
“I was able to talk to our buyer, and she offered 10 percent off on those upholstered dining chairs,” Poindexter said. “Seventy-two hours later, they changed their minds to a leather dining chair. The buyer gave me a resounding ‘No’ on a discount.”
The customers were ready to walk.
“They were pretty upset at that point,” Poindexter said. “They were going to pull their entire sale because the buyer wouldn’t agree to 10 percent off on the dining chairs they wanted.”
It was a tense couple of days, but the sale went through. Poindexter understood her customers’ feelings, though.
“You can’t expect people to understand the language of the furniture industry,” she said. “It’s really important to educate consumers about the language of furniture, and making sure they understand what we’re telling them.” HFB