May 30,
2006 by in UnCategorized 
By Home Furnishings Business in Furniture Retailing on May 2006
New furniture orders in March 2006 of $2.4 billion and shipments $2.5 billion both were up 3 percent from prior-year levels, and, as usual, increased over figures for the short month of February—8 percent for new orders, and 17 percent for shipments.
That’s according to BDO Seidman’s most recent survey of residential furniture manufacturers and distributors.
The report indicated, however, that overall business among industry suppliers remains “spotty.” Positive indicators for interest rates, consumer spending, retail sales and unemployment were offset in March by unfavorable consumer prices, confidence and debt; existing and new home sales, and housing starts; producer prices, automobile sales, capital outlays, durable goods orders, and overall factory shipments.
Forty-eight percent of suppliers participating in BDO’s survey reported increased order rates in March, compared to 53 percent in February and 58 percent in January. Year-to-date, new orders were 5 percent higher than the first quarter of last year; down slightly from the 6 percent increase after February’s report. Fifty-one percent of participants reported increases in new orders for the first quarter, down slightly from 57 percent in February.
As with new orders, approximately 48 percent of the participants reported increased shipments in March, compared to 50 percent for February, with year-to-date shipments up a little under 2 percent.
Backlogs rose 2 percent over last year after a 6 percent increase in February, but fell 2 percent from February 2006 levels.
Factory payrolls fell 2 percent in March 2006 versus March 2005, consistent with the 2 percent decline in February-over-February comparisons. Factory payrolls in March were 13 percent higher than February, consistent with the increase in shipments and more working days. Year-to-date, factory payrolls declined 5 percent for the quarter compared to the first quarter of last year. The number of factory employees was about equal to the numbers in February. Compared to March 2005, the number of employees fell 4 percent, slightly less than the 5 percent reported in February comparing to February 2005.
Looking at key economic indicators, the Conference Board’s Consumer Confidence Index, which increased in April, to 109.8 declined in May to 103.2. The Present Situation Index decreased to 132.5 from 136.2, while the Expectations Index fell to 83.7 from 92.3.
“Apprehension about the short-term outlook for the economy, the labor market and consumers’ earning potential has driven the Expectations Index down to levels not seen since the aftermath of the hurricanes last summer,” said Lynn Franco, director of the Conference Board Consumer Research Center. “In sharp contrast, consumers continue to rate current conditions favorably, although the Present Situation Index also lost ground this month. Looking ahead, the Expectations Index bears close watching, as it is often a harbinger of times to come.”
In housing the National Association of Realtors said total existing home sales fell 2 percent in April from March, and were 5.7 percent below April 2005’s seasonally adjusted annual rate. The seasonally adjusted annual rate in April was reported to be 6.76 million units.
David Lereah, NAR’s chief economist, said the decline was expected.
“Our leading indicator for pending home sales was trending lower, and our forecast model is showing a modest decline for the second quarter with sales leveling out before rising in the fourth quarter,” he said. “Higher interest rates are slowing home sales, but we see this as another sign of a soft landing for the housing sector which remains at historically high levels.”
The decline in existing home sales was evident in all regions of the country, with the West having the largest decline compared to last year at 13 percent.
Sales of new single-family homes in April rose 4.9 percent over March levels to a seasonally adjusted rate of 1,198,000, according to the U.S. Census Bureau.
Privately owned housing starts were at a seasonally adjusted rate of 1,849,000 with single-family housing starts at a rate of 1,535,000. The single-family starts were 5.6 percent below March 2006.
Non-farm employment increased by 138,000 in April 2006, according to the Bureau of Labor Statistics. The unemployment rate was unchanged at 4.7 percent. Industries with notable job gains over the month included financial activities, health care and manufacturing. The Bureau reported that average hourly earnings rose by 9 cents in April. The number of unemployed persons (7.1 million) was essentially unchanged in April.
The U.S. Census Bureau reported that advance estimates for U.S. retail and food services sales, adjusted for seasonal variation and holiday and trading day differences, indicated an increase of 0.5 percent from March, and were up 6.6 percent over April 2005. Total sales for the three-month period ending in April were up 7.3 percent from the same period a year ago.
Retail sales were up 0.5 percent from March and were up 6.6 percent over April 2005. Gasoline station sales were up 17.4 percent from a year ago due to higher fuel prices and sale of non-store retailers were up 13.3 percent from last year.
Sales at furniture and home furnishings stores fell 0.1 percent in April compared to March, but were 8.1 percent ahead of April 2005. In March, sales at these stores were reportedly up 9.6 percent over March 2005. For the three months ended April 2006, sales at these stores were 8.9 percent higher than the same period a year ago. Year-to-date, sales at these stores were up 9 percent over the first four months of last year.
The final March report indicated that shipments in the furniture and related products category increased 9.3 percent for the first quarter of 2006 while March shipments were 9 percent higher than March 2005.
May 29,
2006 by in UnCategorized
By Home Furnishings Business in on May 2006
Same story, different locale.
The German daily newspaper “Die Welt” is reporting that furniture is set to become the next big issue in an ongoing European Union-China debate over anti-dumping. European furniture makers plan to file a complaint to Brussels about cheap Chinese upholstery flooding the market.
Furniture producers are calling for punitive tariffs on upholstery coming in from China, saying Chinese suppliers are shipping sofas for sell in Europe at prices below the cost of making them. Leather sofas are being sold for about 100 Euro in Europe—that’s just over $127.
Peter Mandelson, EU trade commissioner, is reportedly working on a report to be released in September on challenges such as market access, investment and intellectual property. The paper said that manufacturers in southern European countries, Belgium and Germany are being hit hard by the imports. The European furniture industry is worth about 2.5 billion Euro, or just over $3 billion.
May 29,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on May 2006
Last week was Design Week in New York, and Ikea, along with ad agency Deutsch, took some powerful marketing to the city streets.
According to the agency, more than 650 different experiences were offered during the five-day marketing event. Products from Ikea practically blanketed the city. Padded park benches in Union Square, oven mitts on subways, decorated bus shelters and phone kiosks, blankets on theater seats and public hammocks.
The products weren’t just placed throughout New York as advertising props, the companies wanted city dwellers to take the goods.
The blankets in theaters—based on the principle that theaters are always cold—included placements in off-Broadway’s Orpheum for a performance of “Stomp,” and the Village East movie house for a showing of “Tsotsi.” A sensual red bed was placed outside a nightclub in Manhattan’s meatpacking district.
David Rosen of Deutsch said the campaign was fun, but challenging all the same because of the unpredictability of the large-scale, unprotected product placement.
May 29,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on May 2006
Fort Worth, Texas-based The Bombay Co. said it will change the frequency with which it publicly reports same-store sales and total revenue to a quarterly rather than a monthly basis.
The change means that the retailer’s next sales release will be for the quarter ended July 29. In a statement, the company said shareholders will be better served by the revised release schedule as it will reduce the potential for volatility caused by monthly reporting of sales data. Monthly comparisons are often affected by calendar shifts, changes in promotional methods or cadence, and other events, so that meaningful comparisons of the retailer’s performance in the current period with its performance in a prior period cannot be made.
The change to a quarterly reporting frequency will make period-to-period comparisons more valid and will align Bombay’s reporting with the majority of publicly-traded specialty home furnishings hardlines retailer, the company said.
May 25,
2006 by in UnCategorized
By Home Furnishings Business in Furniture Retailing on May 2006
Home Furniture, based in Lafayette, La., is opening a new distribution center that will employ between 75 and 100 people initially.
The center will support the retailer’s five stores and could allow it to expand into additional markets in the next few years.
The family owned retail operation posted 2004 sales of more than $40 million. The company has stores in Lafayette, La.; Baton Rouge, La.; Lake Charles, La.; New Iberia, La.; and Beaumont, Texas.