High Point furniture market lonely this time

HIGH POINT -- Doug Schock shook his head in disbelief while gazing at the empty bank of elevators, typically full as they shuttle thousands of buyers between dozens of showrooms filled with the latest styles in sofas, bedroom sets, and dining room tables and chairs.

Not this fall at the High Point Market -- the twice-annual home decor and furnishings trade show that sets the scene for what shoppers will see in stores next season.

"Those used to be packed. You used to have to elbow your way into showrooms," said Schock, a territory manager for OneCoast Midwest Home. "I know the economy has been down since 9/11, but the housing slump combined with the weak economy, you have a double whammy."

More than 85,000 industry insiders typically descend on North Carolina for the market, at which thousands of vendors fill 188 buildings and 12 million square feet of showroom space. While the High Point Market Authority wouldn't release attendance figures for this fall's gathering, it was clear from a walk through the market's winding corridors that the industry is the latest casualty of the continuing housing and mortgage lending bust.

While some showrooms remained full of retailers hunting for next spring's best sellers, many more were sparsely attended. Hundreds of sales representatives stood in doorways looking for customers, instead of participating in the traditional dance of hand-holding buyers as they walk though bedroom and dining room displays.

"The furniture market is being affected by the mortgage crisis," said Russ Ortiz, president and CEO of Shine Home, a California-based home furnishings boutique.

Last year, before troubles in the mortgage lending business accelerated the worst housing downturn in more than a decade, the nation's largest furniture stores posted a 6.6 percent increase in sales, said Jerry Epperson, a furniture industry analyst with Richmond, Va.-based investment firm Mann, Armistead and Epperson.

But U.S. consumer spending on furniture and bedding, the broadest measure of industry activity, is expected to grow by just 1.5 percent this year and 2.2 percent in 2008, according to a consensus industry forecast compiled by trade journal Furniture Today. That would make 2007 the industry's worst year since 2001, when sales declined by 0.6 percent.

"No one wakes up in the morning [and] has to replace their sofa or dining room table," said Epperson, who expects a flat to slightly down year in furniture sales, with the growth coming in bedding sales.

There were still new products introduced at this fall's market, including a push by several manufacturers into the trendy marketing of "green" decor -- furniture made from materials that are organic, sustainable or recycled. Vaughan-Bassett Furniture Co., one of the nation's largest manufacturers of wood furnishings, announced a reforestation program under which it will donate a seedling for every tree it uses each year.

But the company also arrived at market with fewer new products than in years past.

Schock said that with fewer people buying new homes, there is simply not enough guaranteed consumer demand for new furniture for retailers to invest in an inventory of the latest designs.

The housing market woes come as the domestic furniture industry continues to struggle with a flood of cheap imports from Asia. After three years of losses and declining sales, Bombay Co. filed for Chapter 11 bankruptcy protection last month. Virginia-based Stanley Furniture Co. has laid off 200 workers and reported a loss in its most recent quarter.

Second-quarter profits at Furniture Brands International, the maker of Broyhill, Thomasville and Lane brands, were off 66 percent. The St. Louis-based company said in April it was closing three North Carolina plants and cutting 330 jobs as it moves production to lower-cost factories offshore. It recently said its third-quarter loss will be larger than previously expected because of the soft business environment and weak orders.