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Furniture sales up as High Point Market prepares to open

Furniture sales up as High Point Market prepares to open

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There will be little normal about this week's High Point Market trade show.

The market typically draws between 75,000 and 80,000 attendees for its spring and fall shows, many of whom come from other countries.

Participants will be required to wear masks and adhere to social distancing guidelines. 

Market officials are projecting attendance could be 40% to 50% below those figures with few, if any, international attendees because of COVID-19 travel restrictions.

After having the spring show canceled April 16, the High Point Market Authority announced May 21 the fall trade show would be operated on a nine-day schedule, beginning Wednesday and ending Oct. 21.

The schedule, however, has been divided into three phases: the first runs Wednesday through Friday, while the second will be Saturday through Oct. 18, and the third Oct. 19-21.

Buyers and industry guests have been assigned to one of two geographic regions based on the state in which they are based.

Region B features Alabama, Arkansas, Florida, Georgia, Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. Region A includes the remaining 36 states. Buyers and guests are encouraged to come on days set aside for their regions. 

Still, market and industry officials are cautiously hopeful that they can successfully bring together a limited number of manufacturers and retailers within COVID-19 social distancing guidelines to provide what they expect will be a welcome economic and networking boost. 

"This market is critical for the industry and our state. We need the visitor dollars," authority president Tom Conley said. "The industry has a myriad of supply chain issues which need to be discussed.

According to a 2018 Duke University study, the High Point market pumps an estimated $6.73 billion annually into the economies of all the counties within a 75-mile radius of downtown High Point, including 22 in North Carolina and eight in Virginia.

That includes average visitor spending of $506.3 million and spending by exhibitors of $162.9 million.

"We are really only having one market," Conley said. "We divided it to allow for less density and enhanced safety precautions.

"Our pre-registrations are much better than we expected. We are down about 45% from our all-time high" in the fall 2019 market.

Conley said that about 70% of exhibitors plan to be open, but with less staff.

“We have asked exhibitors to not make any distribution decisions until the end of market (and) after all regions have had a chance to attend and view products,” the authority said in May.

Regional appeal

Manufacturers and retailers facing challenges with meeting in-person over the past seven months has made the fall market more pivotal for communicating and networking, said Jerry Epperson, managing partner for the financial-services firm of Mann, Armistead and Epperson of Richmond, Va.

"In my opinion, the impressive success of the September premarket showed the need for retailers and vendors to work out many issues, not just to seek merchandise," Epperson said.

"This would include many price increases, product availability, tremendous logistical issues, especially overseas shipping and more."

Doug Bassett, president of Vaughan-Bassett Furniture Co. and former authority chairman, said his company expects to see a flip-flopping of sorts between September's premarket event for select retailers and the fall trade show.

"We saw 99 dealers at premarket versus the usual 40-45 dealers, so attendance was up more than 100%," Bassett said.

"At a normal fall market, we normally see 450-500 dealers. At this market, we expect to see between 200 and 250 dealers."

Bassett said that while the fall trade show will be available to all 50 states, Vaughan-Bassett projects most of its attendees will come from within 600 miles of High Point — which roughly covers the U.S. east of the Mississippi River.

"About 85% of our business comes from that region," Bassett said. "We expect most customers to drive in or take private planes with only 10%-15% traveling by commercial airline."

Paul Toms Jr., chairman and chief executive of Hooker Furniture Corp. said that "fiscal July consolidated incoming orders were up 34% compared to a year ago, and backlogs were up 35%."

"Based on this unusually robust order rate for the summer months, we continue to believe that furniture is an advantaged sector during the pandemic-related economic downturn and ‘safer-at-home’ practices, due to pent-up demand, a robust housing market and less competition from other discretionary spending such as travel, dining out and sporting events.”

Sales up

Home furnishings officials have been waiting for sales to pick up for the past 20 years.

It appears the COVID-19 pandemic might lead to such a surge.

The U.S. Commerce Department reported that for August, home-furnishings retail sales were at $10.2 billion in August, up 2.1% from July and up 3.8% from a year ago.

Meanwhile, there was a 38.5% increase in new orders, to $3.26 billion, during July compared with a year ago, according to the monthly report from Smith Leonard PLLC, a financial-services company in High Point.

About 73% of Smith Leonard survey participants reported a year-over-year increase in orders compared with a year ago.

Ken Smith, the firm’s director of furniture services, said the July orders “have shown that there really was pent-up demand out there."

"But most believe staying at home caused many people to take notice of their furniture and make decisions to go out and buy whether they had planned to or not before the pandemic.”

Smith said that when the pandemic began in mid-March, "who would have believed that backlogs would be out the roof and lead times for manufactured goods would be similar to those of years ago."

"The good news is that business has remained strong for most even through September and most are expecting October to continue. Reports from many retailers continue to note that their business remains very good."

Epperson said that "the vigor of the recovery in furniture and mattress sales has been a pleasant surprise, but has put increased stress on every level of our industry."

Ashley Furniture Industries Inc., the nation's largest home furnishings manufacturer and retailer, is projecting "significantly less attendees than past markets, but this is the right plan based on COVID-19 concerns," said Cole Bawek, its director of public relations.

Bawek said the home furnishings industry "has experienced a major uptick since May, and business has been very strong."

"We expect that the shift to the home will continue for the next year, and our supply chain is in warp speed to catch up to demand."

Ashley's supply chain features a 3.8 million-square-foot East Coast manufacturing and distribution facility in Advance, its largest plant overall, where it has spent more than $250 million on capital investments.

It has more than 1,600 employees there and continues to hold hiring events in the Triad to serve new production lines. 

Forsyth spillover

The market’s main economic effect on Forsyth County comes from attendees staying in local hotels and eating at local restaurants.

Typically, many of the hotels in the county sell out their rooms during the two official market weeks.

Smith said the cancellation of the spring trade show "hurt a lot of restaurants for lack of business, plus catering, hotels, rental cars, individuals that rent their homes, and on and on."

Richard Geiger, president of Visit Winston-Salem, said a typical market requires about 8,000 room nights from Forsyth hotels.

This time, Geiger said the altered fall market schedule will create a spillover effort "in the hundreds of hotel rooms rather than the thousands."

"I don't have the specifics regarding just market occupancy tax collections," Geiger said.

"But as a comparison, total occupancy tax collections (not just from the market) in April 2019 were $673,000 compared with $129,000 this April."

Work, study from home

Conley said another pivotal factor has been the expanded work-from-home trend.

"When you are working from home, you tend to need different home furnishings," Conley said. "Kids need different items for home schooling.

"If you are spending more time at home, that old furniture is really showing its age."

Bassett said Vaughan-Bassett is seeing first-hand the surge in consumer demand as retail stores reopened

"Since June 1, our orders have been up by over 70% vs. the same months in 2019, and our shipments have been up by about 50%," Bassett said.

"We believe Vaughan-Bassett is doing better than most of our peers for several reasons: we started this period with plenty of inventory; we can ship quickly and can fill smaller orders; and we are Made in the USA, which is more important than prior to the pandemic."

Bassett said the work from home trend is benefiting the industry in that as more individuals who telecommute are moving out of cities and into the suburbs.

"We are finally seeing housing return to pre-Great Recession levels, which will benefit our industry for years to come," Bassett said.

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