Analyst expects furniture sales upturn in spring ’09

HIGH POINT | In the face of a slumping economy and dismal quarterly reports from many furniture manufacturers released in the past few months, the High Point Market opened Monday with some good news for the furniture industry’s future.

“The situation we have now is somewhat severe, but it will be short-lived,” said Jerry Epperson, a home furnishings analyst speaking at the opening day media breakfast.

Epperson, who has 35 years of experience in home furnishing analysis, said he expects at least two more quarters to continue the downward trend in furniture orders and sales.

“The fourth quarter will be down 3 percent and the first quarter next year down 1 percent,” he said after the breakfast. “The second quarter will be flat, and we will see movement upward in the third quarter. If our numbers in the third quarter next year are not better than this year, we are in a pickle.”

During the breakfast, Epperson told the crowd of media members and market and industry leaders he is confident furniture sales will pick up next year.

“The reason I can tell you next year will be better is we are creating numbers this year that will not be hard to beat,” said Epperson, drawing laughs from the audience.

Epperson said no one should be surprised by the lagging sales and orders in the furniture industry, considering what is happening across the United States in the housing market and credit industry. While he said the new home construction market would not be a quick turnaround, he expects existing home market sales and lending industries to improve sooner, which will help furniture sales.

“We will not see a bounce back in the new home industry until 2017, but we will see a bounce back sooner in existing home sales,” he said. “Who got badly burned in the housing industry were people who were going out buying homes to flip. They were taking these interest-only loans expecting to never stay in the homes long. These homes are down in value.”

Brain Casey, president and CEO of the High Point Market, also cast a positive message about market at the breakfast. While the number of registered buyers will not be available until market ends Friday, he said 6,500 new buyers had registered by Monday to attend, and 80 countries are represented among the buyers.

“Despite the economic challenges we all face, High Point Market continues to be in a position of strength,” he said. “… The level of buying that may happen at this market will be at a level we’ve not seen before. Buyers and exhibitors alike will look to where they get the best values.”

The furniture industry continues to have a positive economic impact in the Triad, injecting $2 billion into the three-county region and providing 65,000 jobs, Casey said.

With Epperson’s forecast of brighter conditions for furniture manufacturers and retailers next year, he said there is question about who will survive for the better day.

“I think the manufacturers based here have had their big shakeout,” he said, referring to announced factory closings such as Stanley Furniture’s Lexington plant. “I think you will see us lose a few more retailers, however.”

He also pointed to some positive news in the past year, such as Thomasville Furniture Industries recalling 50 furniture workers to make chairs at its previously shuttered Plant C and Ikea opening a manufacturing facility in Danville, Va.

Last week, Bob Shaak, chief operating officer and senior vice president of sales and marketing for Lexington-based Linwood Furniture, said he wouldn’t gamble to predict how his company will fair at the High Point Market.

“I have no crystal ball,” he said. “I wouldn’t pretend to know whether it would be a good or bad or fair market. We do anticipate a number of dealers coming to see us that we have been in contact with us in the last six months.”

Linwood debuts two new lines by Lexington furniture designer Steve Hodges at this market — Louis Philippe and Charlton House. This brings the company’s total number of lines to seven.

Jill Doss-Raines can be reached at 249-3981, ext. 219, or at jill.doss-raines@the-dispatch.com.

Taken from http://www.the-dispatch.com/