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LAS VEGAS — The furniture industry continues to suffer from pandemic hangover, with soft consumer demand and freight-impacted inventory issues serving to impede sales and constrict retailers’ open-to-buy, according to several vendors at the recent Las Vegas Market.
“This is the worst I’ve seen it in the past 35 years,” Aico CEO Michael Amini told Furniture Today. “In the past, we’ve had slow business cycles or a slower economy, but it was not combined with so many other factors.”
That sentiment was echoed widely throughout the market halls, with vendors pointing to the shift in consumer spending from home to travel and leisure over the past two years as a key factor undercutting sales. Coupled with that is rising inflation that’s taken discretionary dollars and forced consumers to reallocate them to basic necessities.
And despite expectations that inventory bought during the supply chain crisis would have moved through the system by now, reports continue that some remain reluctant to clear those goods at a loss to make room for newer inventory.
At the same time vendors noted that the pandemic and its aftermath put myriad factories out of business, further complicating the supply situation.
Despite these challenges, vendors at the Las Vegas Market were bullish, not necessarily on the economy but on the strategies they’re putting in place to meet the challenge and on their ability to hold or gain share at a time of heightened competition.
“The business is there, and people want to write orders,” said Jamie Collins, executive vice president at Homelegance. “The cycle is short right now. People are looking for product on short notice. People aren’t committing to containers, but they are buying; for those of us in the ‘warehouse business’ that’s good news.”
Discussions around business are usually defined by comparisons to past performance, which has become more complicated by the pandemic and its aftermath. Vendors noted that the first half of 2022 was particularly strong, making this year’s first half seem that much weaker by comparison. However, there is a clear sense that things are moving in a more positive direction.
“The second quarter ended significantly better than the first quarter,” said Jim Ziozis, CEO of Powell/Linon. “You have to remember you still had stimulus dollars at play in 2022. There was none of that this year. I’m very optimistic for the rest of this year.”
Bob Bruns, president of massage chair supplier Cozzia, said incoming orders for the first half of the ear were up 4% over the prior-year period, with brick-and-mortar placements and programs driving the lion’s share of the business.
He noted that even better news for the company is its ability to consistently move top-end price points up with the company’s number one selling chair — by dollar volume — now retailing at $8,500, more than double the company’s top selling unit just a few years ago.
Like many, however, Cozzia has had to make adjustments to its mix in response to the economy. This includes beefing up the promotional end of its business and focusing on a more aggressive promotional strategy.
That same focus on the promotional side of the business was the focus of Coaster America’s market, according to Marlene Vidal, corporate sales and marketing manager. “We’re trying to get back to our roots, which is great value and more promotional product.”
She stressed that did not mean compromising on style, hitting key fashion looks or even offering more function, such as with the company’s new performance fabric in its upholstery introductions. But it does mean less time and effort chasing step up product crossing over into mid-tier positioning.
This time around, “promotional” also could be used to describe strategies for moving product, even at upper price points. Classic Home Senior Vice President of Sales Matt Sorensen noted that a key driver for the company this summer has been using B2B “Flash Sales,” a tactic that drove “triple-digit” increases over the same period of 2022.
That same optimism could be found in the A-America showroom, where President Christian Rohrbach said the company was having, “a strong market and a good year,” a result he attributed to having “the right price-value relationship.”
As an example he pointed to four new bedrooms being shown for the first time at this market, all of which he said were going to be cut.
And that type of activity may well prove to be the best sign coming out of this market. Product development activity appears to be returning to pre-pandemic levels. Like A-America, Classic Home showed several new bedroom groups here.
Powell also showcased a wide range of merchandise it had picked up from Lane’s shutdown, which for a period will continue to carry the Lane brand at retail.
Aico’s Amini said while the environment may be challenging, the company is positioning to hit the gas hard as things turn with its largest and broadest slate of new product introductions planned for October in High Point. That rollout will include six full case goods collections, five new upholstery collections, six new upholstered beds, seven new bedroom collections and eight new lighting lines.
“It’s all about positioning,” said Amini. “So when things get better we’re ready to really hit the gas.”
