Crowds gathered for the fall High Point Market with renewed energy and the excitement of many launches. Comfort, cozy and calm are all words used by companies to describe the products they introduced at the world’s largest exhibition of new home furnishings designs in High Point, North Carolina. But “relaxing” is the adjective showing up most often, according to the American Home Furnishings Alliance.
For flooring, there were a number of new area rug launches. Some of note included Karastan's meet and greet with Stacy Garcia for the launch of her latest rug collection and an intimate conversation with designers Drew and Jonathan Scott. Nourison hosted a meet and greet with HGTV's Nicole Curtis for the launch of most recent area rug collection. Jaipur Living also launched a new rug collection Harman Hold with interior designer Kate Lester.
Stump & Company, a privately held mergers and acquisition advisory based in Charlotte, North Carolina, published a quick report on the current state of the market.
Many companies report doing well, with growth rates over 40% this year and margins expanding. On the flip side, some companies are at a breaking point due to inventory surges, too much debt, lack of capital availability, and general weariness of fighting the battles of the day. Stump & Company projects there will be many business failures in this next season and that the strong will be opportunistic and acquire assets and people to propel them forward and capture more market share.
The firm said most companies are now over-inventoried as shipments continued to flow in while orders began to slow. Add to this, container rates have plummeted, now returning to levels below the COVID-19 increases. This is forcing companies to curtail freight surcharges and are now dealing with inventory values with the much higher container rates embedded in the cost of goods. The firm said it will take 3-6 months for this issue to balance out and return to normal.
Most feel that the furniture industry has been in a recession since early summer, with reported orders off 30% or so. The high end would dispute this, as they have lived off large backlogs and many are still continuing to enjoy growth in orders, particularly those servicing the designer trade. With public stock prices low and housing starts dwindling, some fear a choppy rest of 2022 and 2023. Stump & Company said it remains optimistic that the stock market is correcting back into positive territory, that inflation is being curbed, and that consumers will regain confidence post-election. A big unknown is geo-political tensions amongst key trading partners. The company is encouraging its clients to consider a “bridge over COVID” and compare 2019 to 2022 to get a clearer sense of growth without the COVID noise in the middle. Most of the industry is operating well above 2019 levels.