Shrinking pie at Showtime
December 8, 2008,
High Point, N.C. – The contract market is the only bright spot in an otherwise gloomy environment for decorative fabrics, key suppliers headed to Showtime report told HTT last week.
An indication of how Showtime will turn out from a business and attendance point of view is the fact that far fewer furniture manufacturers went to New York for pre-Showtime fabric showings than in past years. This group typically used Showtime for “catch-up” short visits. This week, they are expected to be paying longer visits per showroom.
And as with many other industries, decorative fabric suppliers are trimming staff, cutting expenses and consolidating.
“Business is generally slow, but contract is growing and good,” said Jeff Thomases, ceo of Swavelle/Mill Creek. Furniture, he added, “is about even with last year, and retail and jobbers are soft. The RV business is the worst decline for us.”
“Buyers are looking for the most perceived value and the ‘jewels’ in a line,” explained Tom Notaro, vp of Wearbest. He is expecting Showtime to be more important to certain furniture suppliers because there was “a definite decline in pre-showings in New York.”
Overall, he added, “Business is holding its own but it’s tough hunkereing.”
“It’s a struggle, but we’re all right,” commented Jack Eger, svp of Craftex. As part of the company’s streamlining, “We are moving from this office (the company’s headquarters in Blue Bell, Pa.) – it’s been too big for four or five years.”
Looking at the various business segments, Eger said, “Contract is terrific, jobber business is mediocre, the product has been selected, but not ordered, and residential business stinks.”
“December is usually a quiet month, but this is not normal,” remarked Tom Hilb, president of Heritage House. “I don’t know anything uplifting.” As part of the firm’s economy moves, Hilb has closed the firm New York office and hopes to close the showroom here.
“It’s very tough,” said Jim Richman, ceo of Richloom. “With the pie overall shrinking, we have to get a bigger percentage of that pie,” he remarked. Looking to this week, he said, “Appointments are lighter for many reasons, especially in the RV world.” And the changing market has affected the non-furniture manufacturing segment as well as the retail over-the-counter fabric business.
“I live in la-la land (Los Angeles) and we don’t feel the economy pressures like they do in Minneapolis for example,” said Jason Carr, president of Softline Home Fashions. “Our volume is pretty much the same as last year, but the margins are down. Still, we’re OK.”
At retail, Carr added, “It’s difficult to get facings, so we’re still in a hungry mode. I see a turnaround as 20 months away.”
“Everyone’s stopped buying; it’s brutal. But contract is not as bad as residential,” said Mike Shelton, president of Valdese. The company has had three layers of layoffs. Beyond that, “We’re doing everything we can to impact the top line,” he said.
The crunch really began in earnest in November for Valdese, he explained: “We had a good October and even made money in November.” Shelton also is concerned about the supply base for the fabric business.
“Business is tough but not impossible; we’re seeing reduced orders from all sectors,” said Robert Lachow, vp of J.B. Martin. “The velvet mill is reporting that their better fabrics are selling well, and there is demand but a lower level than it had been.”