Archive for September 12th, 2007
Metro stores add lines, remodel in weak economy
Jennifer Youssef / The Detroit News
A weak economy and an even weaker housing market are forcing Metro Detroit furniture dealers to rethink the way they do business.
As a handful of local furniture stores closed shop over the past two years, unable to adjust to a severe downturn in the state’s economy, others added new lines and renovated showrooms, changed the way their sales teams work with customers and expanded their marketing techniques to get customers in the store and furniture out the door.
Warren-based Art Van Furniture is mailing out its first 44-page catalog this month and will begin a broadcast advertizing blitz next month. And Gorman’s Furniture, based in Farmington Hills, has added dozens of new brands to its lineup, including the popular Stickley furniture, which company officials say has given business a major boost.
“In 2006, sales were up slightly and (so far) in 2007, they were down 2 percent, but we still feel lucky when we see other stores going out of business,” Gorman’s President Tom Lias said.
These are tough times for the $85 billion-a-year furniture industry.
Changing shopping habits — customers buying furniture online or from a catalog rather than going to a store — and more competition from other types of stores, such as Wal-Mart, Target and Costco, are to blame, as well as the slowdown in the housing market, particularly in Michigan.
The furniture industry’s woes are not unique to Michigan; nationwide, home furnishing chains made up the largest portion of store closings in the first half of this year, according to the International Council of Shopping Centers. Of the 3,081 stores that closed last year, 22 percent were furniture retailers.
Locally, among the store closings in the past two years are the Grand Rapids-based Klingman’s store in Shelby Township, the House of Denmark Michigan outlets and most recently, the three stores owned by Furniture Express, based in Romulus.
“The last few years have not been good to the furniture trade,” said Mike Pierce, director of the National Home Furnishings.
For furniture stores to stay in business, Pierce says they must have a knowledgeable sales staff, be ready to inform consumers and offer financing programs. And as more customers are getting their information on the Internet, it would be wise to have a Web presence and offer a delivery service.
New sales techniques
Art Van Furniture is exploring new sales techniques and different forms of marketing to stay ahead of the competition, director of communications Chris Morrisroe said.
Salespeople are being trained to use a more relaxed approach when helping customers and the furniture is being arranged in “lifestyle settings” to show consumers how different pieces can be mixed and matched, rather than the old way of keeping different categories of furniture separated in “galleries.”
The company also is launching a new television and radio advertising campaign next month, will update its Web site in November, and has introduced three new lines this year: Michigan H.O.M.E.S, Huntington House and the Cindy Crawford Home collections.
Art Van can’t continue to operate the same way it has, Morrisroe said.
“You have to change and try something new,” she said. “If you don’t change, you will die.”
Focus on customer service
Gardner-White Furniture, based in Warren, “reinvents” customer service to accommodate shoppers and increase sales.
“We can’t do anything about the economy,” said Barb Tracey, vice president of promotions. “The only thing we can do is look at what we’re doing and do it better.”
The company has started sending customers e-mails about special deals and wants to expand its use of the Internet. Upper management meets with store managers once a week and goes to the chain’s seven stores nearly every day to talk to associates and customers to get feedback.
Gorman’s Furniture, once heavily invested in the Drexel Heritage brand, has scored a hit with its new Stickley line, plus more than 100 other brands it now sells. It also is concentrating on hiring top-notch interior designers to help customers choose furniture and decorate their homes, Lias said.
That part of the business is “way up,” he said.
“Some changes are forced on you,” he said. “It’s market dynamics. The furniture industry has always been competitive and if you’re still doing it the way you did it 10 years ago, you already missed the wave and it’s too late.”
Profit margins are slipping
Making a buck in the furniture industry has indeed gotten harder, as the competition from big box retailers and online has forced stores to cut prices.
Profit margins have shrunk over the past decade from 46.3 percent in 1996 to 36.8 percent in 2006, according to a report compiled by investment banking and corporate advisory firm Mann, Armistead & Epperson, Ltd.
The light at the end of the tunnel is the upcoming generation of young adults who will be buying homes in the next few years and will need to furnish them, said Jerry Epperson, the advisory firm’s managing director. “People really can’t do without furniture, and we’ve got a whole new generation emerging,” he said. “They’re the next big wave.”
Linda Hess and her fiance Mark Alexander, twenty-somethings from Sterling Heights who are about to purchase their first house, are an example of how shopping for furniture has changed.
They’re looking at store Web sites to decide where they will shop for furniture, and won’t even go into a store until after checking the Internet, Hess said.
“We don’t have a lot of time to go from store to store, so I just want to see what’s out there and be prepared,” said Hess, an emergency room nurse.
You can reach Jennifer Youssef at (313) 222-2319 or jyoussef@detnews.com.
September 12th, 2007
HICKORY, N.C. — It wasn’t a typical workday for employees at Sherrill Furniture when Earl Charles Spencer, Princess Diana’s brother, came by to see how his furniture line is made.
“He’s making 18 stops in the U.S., and Hickory is the only one that does the upholstery for the furniture,” Buddy Sherrill, chief executive officer of Sherrill Furniture, said of the Monday visit.
“He was amazed to see the work pace of the people. He was surprised to see how the Americans do it.”
The furniture is inspired by Althorp estate in Great Britain, which has been home to the Spencer family since 1508. Spencer started the Althorp Living History line about three years ago, and revenue from the business is used to pay for upkeep at the estate, Sherrill said.
Copyright 2007 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
September 12th, 2007
Clint Engel
Retailer had promoted giveaway tied to Cubs win
LIBERTYVILLE, Ill. — Park Avenue Home Furnishings is going out of business, citing three years of losses.
Gary O’Reilly, owner of the 80,000-square-foot showroom and the former O’Reilly Fine Furniture at the same location in this northern Chicago suburb, said he originally planned to liquidate the majority of his inventory, remodel and reopen, but the high-impact sale he ran didn’t draw the business he had expected.
So this month he began a going-out-of-business sale, run by Planned Furniture Promotions. O’Reilly expects the GOB sale will run for about 90 days and projects total sales between $4.2 million and $4.9 million.
O’Reilly said he believes consumers are still buying furniture. The bigger problems for Park Avenue and the industry, he said, are what he called “the China influence” and online furniture sellers. Imports and the deflation associated with them, he contended, are largely responsible for cutting his annual sales from $7.7 million in 2002 to about $3 million in 2006.
He also said he believes e-commerce operators are stealing 20% of his business, as consumers are coming in with pen and pads in hand, then leaving the store to buy online.
“With the exception of grocery stores, restaurants and gas station, the Internet is hurting (retailers) bad,” he said.
O’Reilly said he was also hurt when the state government stepped in and made him pull his advertising in April for a promotion that offered his customers free furniture if the Chicago Cubs win pro baseball’s World Series. The state called it gambling, he said. (In Boston, Jordan’s Furniture is facing a similar challenge from an individual’s suit, claiming the retailer’s promotion tied to a Red Sox win is an illegal lottery.)
Park Avenue fought the challenge and won, O’Reilly said, but the Cubs played terribly in April, he said, and by the time his advertising was reinstated it was too late.
O’Reilly, who has operated a furniture store at the same location for about 30 years, said Park Avenue is not filing for bankruptcy and all creditors have been paid. He owns the store building and plans to either sell it to a shopping center operator or split the space with another retailer and open a new concept home furnishings store.
Either way, O’Reilly, 55, said he’s too young to retire and will return to the industry with that new concept already in the works, though he declined to elaborate on it.
“I’ve been doing this for 35 years,” he said. When he announced the closing, “People come in with tears in their eyes asking why I am closing.” He asks them if they have bought anything in the last two years. And when they say no, “I say, ‘That’s why.’”
September 12th, 2007
By YIP YOKE TENG
Aspiring and practising furniture designers can flex their creativity muscles again at the MIECO Designer’s Choice Awards 2008 that is back for the second year.
The competition allows even more freedom this time around by encouraging participants to not worry about the commercial aspects of their designs.
“We have taken out the commercial aspect from our judging criteria this year. The designers should just worry about the designs, let the sales and marketing personnel work on selling the products,” said MIECO Chipboard Bhd managing director Datuk Yong Seng Yeow.
He said the move was in line with the organiser’s efforts to strengthen the Malaysia brand and to dispel the common perception that local designers were mostly copycat-minded.
“The awards will also serve as a launch pad to international recognition for their works as it will create opportunities to network with renowned professionals and overseas industry players,” Yong said at the launch of the competition at Menara Multi-Purpose recently.
He said the 2007 winners were given well-deserved recognition for their talents and creativity when they received the awards at the Malaysian International Furniture Fair (MIFF) that was attended by some 19,000 visitors.
He said that winners of the student category would be given scholarship instead of cash prize in order to propel them to greater heights.
The competition received over 50 entries in its first year.
Manufacturers, individual professionals and student designers based in Malaysia are welcome to take part.
There are three categories namely Kitchen Furniture with a limited floor space of 9sq m, Office Furniture depicting the SOHO (small office/home Office) theme with a limited floor space of 4 sq m and Living Room Home Furniture with Zen concept, which focuses on simplicity and clarity.
The designs should give emphasis to new ideas and concepts incorporating modern lifestyle for contemporary living utilising particleboard wood panel.
Winners will be announced during MIFF 2008 scheduled for March 4 to 8, prototypes of finalists’ entries will be displayed at Putra World Trade Centre and other fairgrounds.
MIFF Sdn Bhd chairman and managing director Datuk Tan Chin Huat said the organiser might set up a special committee to work on ways to market the winning designs, citing the possibility of granting the patents of commercially viable designs to those who are interested.
Two members of the judging panel, Majidah Design Sdn Bhd managing director Majidah Majid and Malaysian Institute of Art president Dr Choong Kam Kow, said the judges would look for creativity, originality and practicality in the designs.
The grand award winner for the Manufacturer and Professional categories will walk away with a trophy and RM10,000 worth of prizes while the grand award winner for the Student category will receive a trophy and RM5,000 in scholarship.
Entry forms for the competition are available online at www.mieco.com.my and www.miff.com.my. The closing date for all entries is Nov 15.
For details, visit the websites above or call 03-2694 6233 ext 1856/1865 or email mdca@mieco.com.my
September 12th, 2007
Furniture Today,
Fabric fair had been in Milan area for two years
BRUSSELS, Belgium — Italy’s Scoperta fabric show will move its exhibition location to Como, Italy, for its next event, set for May 6-9.
The decorative textile and curtain trade fair, now in its 11th year, has been based for the past two years at the Fiera Milano exhibition center at Rho, Italy, just outside Milan.
Previously, Scoperta had been held in Chiasso, Switzerland, near the Cernobbio, Italy base of Proposte, the luxury decorative fabric fair which is held at the same time.
Bill Davis, organizer of Scoperta, said at a press conference here that the new site will be 15 minutes from Como city center and 15 minutes from Villa Erba, the Cernobbio home of Proposte.
He also said Scoperta will introduce two new sections: Viva@scoperta and The Style Studio. Viva is a space for products including cushions, bed linens, table and kitchen linens. The Style Studio will be a trend focus area for all exhibitors to show their latest designs.
Scoperta’s new location is five minutes from the highway linking Como to Milan, and show organizers are planning transport links to Milan and Cernobbio.
September 12th, 2007
Hooker Furniture Corporation reported net sales of $73.4 million and net income of $4.9 million, or $0.39 per share (net of $293,000, or $0.02 per share in after-tax restructuring charges), for the quarter ended July 29, 2007.
Due to a change in Hooker Furniture’s fiscal year, the Company’s 2008 fiscal year began January 29, 2007 and will end February 3, 2008. The Company will compare its operating results for the thirteen-week second quarter of fiscal year 2008 with the 2006 three-month third quarter that ended August 31, 2006 (the “2006 quarter”).
Second quarter 2008 net sales of $73.4 million decreased $9.6 million, or 11.5%, compared to the 2006 quarter net sales of $83.0 million. Based on actual shipping days in each period, average daily net sales declined 10.1% to $1.15 million per day during the 64 operating days in the 2008 second quarter compared to $1.28 million per day during the 65 operating days in the 2006 quarter.
2008 second quarter net income of $4.9 million increased $3.6 million, or 301.4%, compared to the 2006 quarter net income of $1.2 million. Earnings per share of $0.39 increased $0.29, or 290%, when compared to the 2006 quarter earnings per share of $0.10. Operating income for the 2008 second quarter increased to $7.5 million, or 10.2% of net sales, compared to operating income of $2.0 million, or 2.5% of net sales, in the 2006 quarter. The primary contributors to the increase in net income, earnings per share and operating income were:
- An improvement in gross profit margin to 31.3% of net sales compared with 28.3% in the prior year quarter, principally as a result of the higher proportion of imported wood and metal products sold and lower delivered cost of those imported products (primarily lower inbound freight and delivery costs) as a percentage of net sales; and,
- a $3.5 million, or 18.9% decline in selling and administrative costs, driven primarily by reductions in temporary warehousing and port storage costs for imported wood furniture products, lower early retirement and non-cash employee stock ownership plan (”ESOP”) costs (the ESOP was terminated in January 2007), lower selling expenses and a gain on corporate owned life insurance in connection with the death of a former executive of the Company, partially offset by the selling and administrative expenses incurred by Sam Moore Furniture (acquired in April 2007); and,
- a $2.4 million, or 83.3% decrease in restructuring and asset impairment costs.
Earnings per share improvements resulting from higher net income were reduced by a net increase in weighted average shares outstanding resulting from:
- 1.2 million shares released to employees in the January 2007 termination of the ESOP;
- partially offset by the weighted average effect of common stock repurchases since February 2007.
“We’re pleased with our improved profitability and operational performance this quarter, even in the face of lower sales,” said Paul B. Toms Jr., Hooker’s chairman, chief executive officer and president. “Our increased profitability confirms the opportunity we’ve seen for some time to improve financial and operational performance even in a difficult retail environment, by realizing the efficiencies of our new business model. Our improved operating margin for the current quarter reflects the cost cutting initiatives we’ve had underway and the absence of significant restructuring charges,” he said.
“While sales this quarter were negatively impacted by the industry-wide sales slump, much of the shortfall is the result of our exit from domestic wood furniture manufacturing, which will have a smaller negative impact on both our top and bottom lines moving forward,” he continued. Net sales decreased across all established product lines including wood, metal and leather upholstered furniture, partially offset by $6.7 million in net sales from Sam Moore Furniture’s fabric upholstery operations, which were acquired by Hooker on April 28, 2007.
“We also are gratified by our continued progress in managing our finished goods inventories and believe we’re adequately inventoried for the sales up-tick we typically see in the fall,” Toms said. “In addition, we’ve been able to generate good cash flow and maintain a strong cash position.” At the end of the 2008 second quarter, inventories of $51.6 million (excluding $5.0 million in inventory related to Sam Moore), decreased 24.3% from $68.1 million at November 30, 2006, and 38.4% from $83.8 million at the end of the 2006 third quarter.
During the 2008 first half, the Company generated $23.8 million in cash flows from operations. The Company used this cash flow and an additional $9.9 million in cash and cash equivalents during the 2008 six-month period to fund: 1) common stock repurchases ($18.4 million); 2) the acquisition of Sam Moore ($10.6 million); 3) dividends ($2.6 million); 4) capital expenditures ($1.0 million, net of disposals); and 5) scheduled debt repayments ($1.2 million). Cash and cash equivalents were $37.2 million at the end of the 2008 second quarter compared to $46.7 million at the end of the 2008 first quarter. The July 29, 2007 cash position represents a 9.9% increase from $31.9 million at the 2006 fiscal year-end on November 30, and a 253.4% increase when compared to the cash position of $10.5 million at the end of the 2006 third quarter.
Business Outlook
“While retail conditions continue to be challenging, we expect the typical increase for furniture sales as we enter the fall,” said Toms. “If we see a flat to moderately reduced sales environment, financial performance for the remainder of this fiscal year should continue to compare favorably year-over-year as a result of our ongoing cost-cutting measures, continued progress in managing our supply chain and the elimination of major restructuring and ESOP costs. We expect continued year-over-year declines in warehousing and distribution costs due to better management of our finished goods inventories and lower temporary warehousing and port storage costs resulting from the continuing consolidation of our domestic warehousing operations.”
Announcements
During the recently completed second quarter, Hooker appointed veteran furniture executive Alan D. Cole to the new senior management position of Executive Vice President of Upholstery. In that capacity, he will oversee the operations of Bradington-Young and Sam Moore. Cole served on Hooker’s Board of Directors from December 2002 to March 2004and has held senior management positions at other leading upholstered furniture companies. “Alan has the expertise in upholstery to help us realize our strategic objective to become a more important and complete upholstered furniture resource,” added Toms.
The Company’s Board of Directors previously authorized the repurchase of up to $30 million of the Company’s common stock. “The Board’s actions demonstrate its continued confidence in the Company’s strategy, growth opportunities and financial strength,” said Toms. “We continue to see the purchase of Hooker’s shares as a wise use of the Company’s cash and a way to enhance shareholder value.” Through July 29, 2007, the Company has repurchased approximately 832,000 shares of Company common stock at a total cost, excluding commissions, of approximately $18.3 million, or an average of $22.03 per share, under the authorization.
Also, the Company’s Board of Directors today declared a quarterly cash dividend of $0.10 per share, payable on November 30, 2007 to shareholders of record November 15, 2007.
Ranked among the nation’s top 10 largest publicly traded furniture sources based on 2006 shipments to U.S. retailers, Hooker Furniture is an 83-year old residential wood, metal and upholstered furniture resource. The Company’s principal customers are home furnishings retailers who are broadly dispersed throughout North America. Major wood furniture product categories include home entertainment, home office, accent, dining, bedroom and bath furniture. Hooker’s residential upholstered seating companies include Cherryville, N.C.-based Bradington-Young, a specialist in upscale motion and stationary leather furniture, and Bedford, Va.-based Sam Moore Furniture, a specialist in upscale occasional chairs with an emphasis on fabric-to-frame customization. Please visit our websites at www.hookerfurniture.com, www.bradington-young.com and www.sammoore.com.
September 12th, 2007
GRAND JUNCTION, Colo. — Damage is estimated at $50,000 after an early-morning fire at the Furniture Row complex in Grand Junction. Police and fire crews responded to the business at about 3:00 a.m. Thursday, and found 25 old mattresses burning outside the building. The blaze blackened the southwest corner of the complex. Crews got the fire under control within a few minutes and went inside the building, where they found 15 new mattresses from Denver Mattress charred by the heat of the flames outside. One man was questioned about the blaze, but later released.
The cause of the fire is under investigation.Furniture Row bills itself as a complex of four specialty stores at one location. The Row includes Denver Mattress, Sofa Mart, Oak Express and Bedroom Expressions. The company is based in Denver, and operates more than 330 stores in 31 states. It also owns and operates a NASCAR NEXTEL Cup team.Copyright 2007 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
September 12th, 2007
Hooker Furniture’s (Nasdaq: HOFT) results may be hard to compare, but it’s easy to see that they’re headed in the right direction. The company changed the date its fiscal year ends, so it is comparing this period, which is for the three months that ended July 29, 2007, to the year-ago quarter that ended Aug. 31, 2006. And despite a sales decline, I see some positives in the quarter.
Since the calendar shift throws things off, the best measure to use is average daily sales. On that basis, sales fell 10.1%, to $1.15 million per day. On the bright side, gross margins improved 3% as the company incurred lower delivery costs. Selling and administrative expenses also fell, in part since warehousing and storage costs declined. These steps all helped the bottom line, and earnings jumped to $0.39 a share, from $0.10 a year ago.
That’s not too bad, with the housing market’s decline and higher borrowing costs both affecting furniture makers these days. Furniture Brands’ (NYSE: FBN) recent sales and earnings results were down, and Stanley (Nasdaq: STLY) has also seen its earnings suffer. At the high end of the market, Ethan Allen (NYSE: ETH) has seen modestly improving sales, but it, too, was cautious in its outlook.
And even at Hooker, projections are for sales to stay flat or moderately decline. But the company is expecting costs to continually decline and is working to efficiently control supply-chain management. So when the cycle turns and sales pick up again, I think Hooker should be well positioned to get right back on track.
September 12th, 2007
It’s not fine crystal, it’s not even glass it’s high-society plastic. It is acrylic furniture, made from the same material fake finger nails come from.
“I try to do some real funky, and some of them real subtle,” designer David Muniz said.
Muniz’s furniture is made from Lucite. The synthetic polymer was first developed in 1928 and sold by a German company. Yet these designs have an island heritage.
Working with Lucite is a time-honored tradition in David’s family. His father actually began the business over in Cuba. Today, based in Miami, David is using his imagination to come up with new and innovative products.
The Lucite comes to David’s studio in sheets, similar to plywood.
“We cut it, we route it with routers, we bevel it and then we have to polish it, all the sides and all the angles.” Muniz said.
Although the angles look delicate, right down to the faux candles, the transparent designs are strong enough to hold humans during dinner and even their predators. The same acrylic material forms the glass tunnel through the Shark Encounter at SeaWorld.
If you do not want to sink your teeth into clear furniture, David can add an array of color and a style all his own.
That’s a look at Your Home.
Scott Fais, Central Florida News 13.
September 12th, 2007
CLEVELAND — Bargain hunters know that the best time to buy holiday cards and decorations is the day after the holiday, but you can actually find great deals for each month on the calendar, reported consumer specialist Angie Lau.
The trick to finding the best buys of any month is to know when stores move inventory.
In July, your best bargains are going to start with indoor furniture.
“New inventory hits the showrooms in August, typically. But, it doesn’t mean all furniture; for example, mattresses aren’t included in that,” said Shopzilla.com’s, Helen Malani.
Malani said July is the time to stock up on arts and crafts for the kids.
“Store owners have to clear their shelves in July to make way for the back to school new inventory. A lot of school teachers go shopping for crayons and all sorts of things,” she said.
August also brings the fall collections of men’s suits, so by July, merchandise is often at deep markdowns.
“Hone in on summer items like swim suits and summer sports equipment and even ceiling fans because, if you think about it, those items have been able to command a lot of shelf space earlier in the year, leading up to summer, but now we’re in July they need to start getting rid of it,” said Malani.
A survey of online consumers shopping on all major search engines shows timing really is everything when it comes to saving money.
“In certain product categories, like men’s suits and indoor furniture, shopping behavior is out of synch with getting the right deal,” said Malani. “Men’s suits, people look in May, and with indoor furniture, most people shop in January. If you can just delay your buying — maybe you can do your research then — but if you can delay the buying you can score some great deals.”
Timing can also come down to specific days in certain industries.
If you are looking for cheap airfare this summer, Wednesday is the best day to buy tickets, and most airlines reset their fares just after midnight, so 1 a.m. on Wednesday can yield substantial savings.
Copyright 2007 by NewsNet5. All rights reserved. This material may not be published, broadcast, rewritten or redistributed
September 12th, 2007
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