Glass half full for first half of '03
December 23, 2002,
As the industry concludes what can best be termed a challenging year for both suppliers and retailers, a host of lingering issues ranging from the possibility of war in the Middle East to volatile consumer confidence make projections for 2003 little more than guesswork.
"Retailers seem to have spent more time and put more thought into spring 2003 resets than in prior years," said Bill Kilbride, president of rug maker Mohawk Home. "Some of the results are dramatic new looks and styles."
"My outlook for the first half of 2003 is great," said Louis Ragy, senior vp, marketing and sales, Trade Am. "Inventories are down, and retailers are impatient to be back in decent inventories."
Some new sales opportunities may also come in the form of retail expansion, an appealing thought for suppliers that have suffered in the wake of widespread retail consolidation.
"We're very bullish; we believe our momentum will continue," said Alan Gladstone, president, specialty retailer Anna's Linens. "We're going to open 20 new stores in the first six months of the year."
Several manufacturers pointed to the continued emergence of home as a key sales driver and a prime reason for optimism moving forward into 2003. The category has continually outperformed other core retail categories such as apparel and hard goods.
"We are bullish on the first half of the year," said Loren Sweet, president of Brentwood Originals. "The 'home' will continue to be the focus of consumer spending. We think this to be particularly true of decorative accessories such as pillows, window [treatments] and throws. In short, we see the current trend continuing into next year."
"Like everybody else, we're cautiously optimistic," said Dave Stewart, executive vp, Sleep Innovations. "Home continues to be one of the stronger categories, and we think that as long as we can find the right product with the right combination of features then business can continue."
Of course, while many suppliers and retailers remain optimistic that the economic outlook is improving, both acknowledge that current political issues could change the retail landscape dramatically within a very short period of time.
"Our outlook for the first half is positive, barring uncontrollable political issues," said Farley Nachemin, president, Hanover Direct.
"I am hoping that the coming year will continue to improve, but, with the uncertain political and economic climate, things could change in an instant," said Michele Duval, director of marketing and advertising, Claire Murray.
"My sense is, leaving aside the imponderables like war, our part of the U.S. economy has stabilized and should probably show some nice improvement next year," said Larry Liebenow, president and ceo, Quaker.
But some suppliers maintain that, despite the potential pitfalls, the right approach will bring about lasting results at the retail level.
"There are, of course, a few wild cards in the political and economic deck at present, but seasoned merchants will look past the variables and find the long-term opportunities," said Ed Vairo, director of creative marketing, Nourison.
Not all suppliers, however, see the economy rebounding in the coming year, some going as far as to suggest that this may be as good as it gets.
"Listen, we all have to get adjusted to one really important thing — the economy you see today is going to be the best economy you'll ever see again," said Leo Hollander, president of Hollander Home Fashions, who added his company is poised to have a very good year in 2003. "We've got to accept the fact that we can't compare today's economy to the bubble of the past five years. That incredible growth, that incredibly strong economy, was an anomaly, something that comes around maybe once in a century. We've all got to get back to reality. It's never, ever going to be that good again."
"The first half of 2003 will be a continuation of 2002," said Barry Leonard, ceo, Glenoit. "The home and apparel sectors will continue to experience price deflation due to lower-priced imports and the reduction of quotas in certain categories."
"We think it'll be as good as 2002, but not a whole lot better," said Andy Payne, vp, sales, Down Lite.
There are suppliers who still maintain that, while a turnaround is coming, it likely won't come until the second quarter, or perhaps later.
"At best, we're expecting to start the year out flat," said Gregg Haft, president, Haywin Textile Products. "Based on booking and projections, hopefully we're looking at a second quarter recovery."
"We think it's going to start out slow and get better as second quarter comes along," said Janie Leonard, Peking Handicraft.
"I think we're looking to stay about the same level through the first quarter at least and then we'll see some buildup about the middle of year," said Gerd Miller, president, Miller Curtain Co.
"The first half will probably not be a whole lot different from the first half of last year," said Tom Muscalino, president, Dan River Home Fashions. "I don't believe we're going to see a significant increase in consumer demand any earlier than third quarter of next year."
Even with all of the economic and political issues facing the industry, there are those who maintain if the product is right, it will sell, regardless of other mitigating factors.
"There's a great deal more effort going on with vendors in terms of product differentiation and product improvement," said Bob Dale, president, Bed and Bath division, WestPoint Stevens.
"Like this year, if you offer the consumer a reason to buy something — what's the newest thing in the universe, the latest print, color or whatever — they will respond," said Dick Fish, vp, dmm, domestics, Wal-Mart.