Good years the real anomaly?
Ray Allegreczza, Editor in Chief -- Furniture Today, June 4, 2007
I'm sure you've heard the one about the two furniture retailers who were discussing business over drinks. One, who is having a tough time, says to the other, "Man, business is terrible. The consumer simply isn't buying furniture."
The other, whose business is good, quips, "Oh, she's buying. She just isn't buying from you."
Now, if you happen to be the retailer she isn't buying from, this story is hardly amusing. But the reality is that while business is challenging, some of you are posting some very respectable numbers.
Don't take my word for it. Take a look at our latest Top 100 report in the May 28 issue. What you'll find may startle you. I counted 20 companies that posted double-digit sales gains in 2006. Some grew by acquisition, others by opening new stores, still others by shedding under-performing units. Some grew by a combination of all these tactics.
Another 42 companies, while not in the double-digit club, nonetheless posted gains. Not too shabby for an industry that some see hovering near death's door.
Granted, we are not getting the lion's share of the consumer's disposable income, but as a percent of expenditures, she is spending more on furniture than on major appliances, TVs, computers and peripherals, jewelry, watches and small appliances.
For some time, I've felt that part of our problem is that we've never acknowledged the abnormally good years we had a few years ago were just that — abnormally strong. Morty Seaman of Rooms To Go has an even better description of those robust years of retail prosperity. He refers to them as "an exaggeration."
The Fed had cut interest rates, people were buying and selling homes at record rates, money was cheap and readily available, and home furnishings retailers were well positioned to reap the benefits of this anomaly.
Today, the housing market has softened, money is not as readily available, business is tough and more of that business is being done by nontraditional retailers.
This year is anything but a cakewalk. But as long as she's out there buying furniture, it's up to you to make sure you get your slice.
