Steaming Frustration to Boil Over in High Point

Furniture World Magazine

A potentially bitter tasting Furniture Market stew is slowing steaming on the fires of pent up frustration and likely to boil over from some raw mercantile ingredients: -After taste from Antidumping and its acrid unintended consequences -Rising costs of logistics on imported goods from bad weather, higher fuel costs, concern over security and container scarcity The impact of this thick concoction probably will likely hasten many significant changes with profound ramifications, not the least of which is a greater appreciation and need for a one world-one furniture market. The thinking on the streets of High Point right now is, “Who needs this kind of semiannual aggravation? What are we doing beating our brains out every six months to introduce new products when what we introduced in April is barely, if at all, arriving now for the busiest selling season? The charming antiquity (more like anachronism) of the two market cycle is under rising scrutiny, in a world where virtually all other consumer product industries enjoy the efficiency of benefiting from one major event for formal product introductions. High Point's two market mentality is a costly, inefficient vestige of a bygone agrarian mentality in which furniture farmers bring their furniture crops to market to tantalize the furniture buyers rushing around wanting to fill their empty baskets to the brim with new goods. This is so ludicrous in a fast-paced world and business scene. In reality, furniture retailers don't need a market to buy furniture. Nor do manufacturers who introduce goods all year. Given the actual product development cycle and refinement period, a two-market product introduction causes too many problems and becomes an unncessary burden on achieving efficiency and sustained consumer satisfaction. What's more, the rise of vertically-intregrated retailers (Ethan Allen, Bassett, Thomasville, Henredon, La-Z-Boy, Lane, Norwalk, and many others) may be the biggest threat to the traditional furniture market. Combined with more retailers — such as Havertys and others — buying directly from foreign sources, the need for traditional furniture markets could easily diminish. In case anyone hasn’t noticed, High Point may not be well-equipped to host or be a once-a-year furniture market. The existing infrastructure couldn't accommodate the intense demands for myriad services and hopsitality needs. “In this unsavory stew, all you have to do is toss in a pinch of the yeast of common sense and you’ll see delicious interest rising in some needed changes around here,” says Russ Childress, a respected international product developer and sourcing executive. “By far, this is the biggest mess I’ve seen this close to a market opening in as long as I can remember.” Antidumping. Clearly, the antidumping odyssey-escapade has diminished this Fall market’s effectiveness, transforming a normally weaker October event into a potentially disappointing mercantile bivouac of tentativeness. Without knowing what the expected tariffs will be, what’s the chance that case goods from China will be in indisputed demand next week? If anything, they and other imported goods have become mercantile WMD’s, weapons of market deflation. As part of normal market physics, when the proverbial market water balloon is squeezed at one end, the other end grows. That other end is Brazil, Vietnam, Thailand, Indonesia and the rest of the opportunistic Pacific Rim. Companies producing in those countries are well positioned to enjoy a strong market. While the focus is on importers, the strong possibility exists for well-managed, progressive domestic manufacturers to seize the opportunity and invest in good ole American ingenuity and possibilities. This is not naive thinking. One day, when import prices rise, a new, stronger American furniture industry will arise. The question will be who owns it: Americans or foreign entrepreneurs? Among some of the unintended consequences of the antidumping diversion is whether the customs enforcement agents will carefully and correctly classify spar parts under the complicated disharmony of the Harmonized Tariff Schedule. Despite what the . HTS says, some confusion exits, manufacturers are grumbling. Right now some manufactures are complaining that spare parts and other items from China have been tagged with the tariff. That could man that the antidumping petitioners could end up paying duties on spare parts. Stay tuned. Oh, yeh, the other antidumping activity will be the ingenious cheating that will prevail. All those 198-percenters are working hard to make nice to Section A lower tariff factories. It’s a gamble, with several companies likely to be “outed” and do the “perp” walk of shame into costly world of fines. Logistics. Now that WalMart is glomming all the Far East containers, the scarcity factor is rising. Toss in the backlogs at West Coast ports from the heavy security checks and labor shortages, bigger ships and glut of containers, and get ready for angry exhibitors at Market. The quartet of hurricanes raking Florida and the Caribbean have caused delays in north bound goods from Latin America, giving rising to a real Market mañana syndrome. Some goods supposed to have been in High Point for PreMarket are still in transit. Oh, that bad tasting stew that’s cooking quickly. With the addition of the right ingredients, it could become the just desserts for necessary change. Not only one-market, but ending the two market cycle as a second chance mentality. Perhaps the elixir of real competition and planning might transform a stew into an enriching soufflé that continues to rise. Reprinted with permission: Ivan Saul Cutler www.insidefurniture.com Email: ivan@insidefurniture.com