New High Point Market Authority report suggests industry is "on the road to recovery"
2010 Business Outlook now available online
-- Home Accents Today, 2/4/2010 12:18:00 PM
According to the 2010 High Point Market Business Outloo
k and CEO Update just published by the High Point Market Authority, the next six months could be the best the U.S. home furnishings industry has seen in a while. HPMA President Brian D. Casey said the data, which includes reports from retailers and industry experts, suggests “we are back on the road to recovery.”
“While none of the leading retailers we interviewed sugar-coated their experiences over the past year by any means, we found their responses to be thoughtful and upbeat,” Casey said. Neil Goldberg, chief executive of Raymour & Flanigan, for example, expressed confidence that the economy is turning around and that “the consumer is back.” Goldberg said that over the last few months he’s seen positive trends in all of his 90 stores and store traffic is up.
“Mid-Western retailer Mary Carol Gerrity, owner of the trend-setting Nell Hill’s stores in Kansas told us that the uptick in business she was enjoying in the fourth quarter of 2009 felt like a return to business as usual,” Casey said. “Said Gerrity, ‘I feel like everybody has been on this diet they are ready to get off of it. I am very optimistic about this coming year. We’re finding that people are coming and buying the big pieces. They are really looking at their homes again.’”
“A year ago, consumers were experiencing a tremendous fear that they were going to lose everything,” Gorman’s Furniture CEO Bernie Moray said in the report. “A year later, a lot of people are waking up and saying, ‘Gosh, we survived it. We’re going to be o.k. The pressure is off a bit.’ ”
Highlights from the 2010 High Point Market Business Outlook:
* In November, The National Association of Business Economists raised its growth outlook for 2010 to 2.9%, up from October’s estimate of 2.6%.
* On December 22, the U.S. Commerce Department reported that the economy grew at its fastest pace in two years during the third quarter of 2009, with real gross domestic product moving upward for the first time since the spring of 2008.
* This jump showed a faster rebound than was expected by The Financial Forecast Center.
* Unemployment figures, still a concern, at the end of 2009 were better than expected. Forecasted to rise one-tenth of a point from 10.2 to 10.3, the jobless rate actually fell back to an even 10% in November and held steady at that level in December. If the trend continues, it could dip below 9.5% by May.
* Brighter employment prospects may be having a positive influence on the one indicator that matters most to retailers—consumer confidence.
* Sales of existing homes leapt up a surprisingly strong 10% in October, with about 400,000 more units changing hands than the market had expected. Analysts expected strong sales to continue through November.
* The effect of tax-rate reductions designed to stimulate the economy has been slight so far, but should team with rising consumer confidence to boost retail sales over the first two quarters of 2010.
* According to Retail Forward’s October 2009 ShopperScape™ report, 23% of consumers are “likely” to make a furniture purchase in the next six months and seven percent “very likely.” With regard to purchases of home furnishings/home décor, 30% say they are “likely” and 8% are “very likely.”
“While unemployment figures remain a concern,” Casey said, “the job search firm CareerBuilder released a survey at the close of the year showing that 20% of U.S. employers plan to increase their number of full-time, permanent employees in 2010, up from 14% in 2009. These somewhat brighter employment prospects may also be having an influence on the one indicator that matters most to retailers—consumer confidence.”
The Conference Board Consumer Confidence Index, which had increased in December, improved further in January. “The most promising development, however, particularly for those in the home furnishings trade,” Casey said, “occurred as sales of existing homes leapt up a surprisingly strong 10% in October, with about 400,000 more units changing hands, fueled by consumers rushing to take advantage of the $8,000 tax credit.
“With store floors everywhere starved for new merchandise, and consumers heading back into the marketplaces, retailers are on the hunt for fresh and exciting products,” Casey added. “We expect that to translate into increased activity at the High Point Market this spring, where retailers will find more new product introductions, in every category and style, at every price point, than at any other market on earth.”
The 2010 High Point Market Business Outlook and CEO Update is available for download at www.highpointmarket.org/pdf/Spring2010BusinessOutlook.pdf.
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