Furniture Sales Hurt By Slump In Home Sales
STEVE INSKEEP, host:
The slump in home sales is hurting companies that make the things people put in their homes. You don't have a new house, you don't need a new bedroom set. The furniture industry is experiencing a tough year, and September sales were down about 10 percent from a year ago. Furniture makers and retailers concluded the world's largest trade show yesterday, and the mood was gloomy. NPR's Adam Hochberg reports on the semi-annual High Point Market in North Carolina.
ADAM HOCHBERG: With new home sales at a 17-year low and foreclosures at a record high, it comes as little surprise that Gary Walters' business isn't thriving either.
Mr. GARY WALTERS (Vice President, Hickory Manor House): This piece here, it's called a Georgian mantle mirror.
HOCHBERG: Walters is vice president of a company called Hickory Manor House. It makes ornate antique reproduction mirrors that retail for as much as $700. Walters displayed them last week at the High Point Market where furniture makers try to sell their wares to retailers. But he was disappointed with the response.
Mr. WALTERS: The market itself this time is very slow, and I think it's attributed to all of the discussion about how tight things are right now. People are not actually spending their money on buying new homes. They may not even consider remodeling their homes or redecorating, and the market has been very quiet.
HOCHBERG: Sluggish mirror sales reflect a larger trend in the furniture industry, a downturn that's being felt by almost all of the 80,000 people who attended the market. Big companies such as Ethan Allen and Stanley are reporting double-digit sales declines. And some small businesses are fighting just to stay afloat. Greer Johnson(ph) runs a furniture store in Clarksville, Tennessee, where he says two competing stores have been forced out of business.
Mr. GREER JOHNSON (Furniture Store Owner, Clarksville, Tennessee): With the home furnishings market being tied with real estate so closely and with a small mom and pop store like me, I'm desperately crossing my fingers. I don't want to be the one having to close up shop.
HOCHBERG: Johnson says his business has been hurt not only by the housing slowdown but also by the credit crunch. He says he's had to turn away prospective customers because they can't qualify for financing. Furniture industry analyst Jerry Epperson calls this the worst period for the industry since World War II.
Mr. JERRY EPPERSON (Analyst, Mann, Armistead & Epperson): Furniture for the most part is a deferrable purchase. You know, if your clothes washer breaks, you got to get it fixed. But what can go wrong with your chest of drawers? So people are putting off of this purchase, and we're probably not going to see a turnaround until sometime after the first of the year.
HOCHBERG: Epperson says only a few sectors of the industry have been immune from the slump. Children's furniture continues to sell as even the most cash-strapped parents probably won't deny their baby a crib. Home office furniture is doing OK because more people are telecommuting. And at High Point, several vendors were optimistic about accessories, small relatively inexpensive knick-knacks that can complement the furniture you already have.
Ms. NAN FELDMAN (Sales and Marketing Director, Badash Crystal): Come over to the decanters with me for a second.
HOCHBERG: Nan Feldman's company, Badash Crystal, imports vases and other decorative accessories. She promotes them as a way to freshen a room if you can't afford to refurnish it.
Ms. FELDMAN: This is a piece that I call my cheap and good. Even at $10, feel the weight.
HOCHBERG: This is a $10 crystal ball?
Ms. FELDMAN: Right. A woman can put that ball with bath soaps in her bedroom so that it adds a little inspiration to your furniture, to your home decor.
HOCHBERG: Feldman says her company has lowered prices to help spur holiday purchases, a strategy being employed by a number of High Point vendors. But industry leaders can see it will take more than price cuts to reverse declining sales. Twenty percent of America's furniture is sold to people who've just moved into new homes. So it's unlikely furniture makers will start thriving again until the real estate market does. Adam Hochberg, NPR News.
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