HD Expo Recap

Our team finished working the High Point residential market 10 days ago, then quickly shifted gears to the hospitality industry and the annual HD EXPO (Hospitality & Design) at Mandalay Bay in Las Vegas.

Similar to High Point, attendance was down due to fewer international guests and a general 'wait for a tariff deal' mentality. This market gets better in its physical set up each year with better seating, speaker venues, and functions for entertainment. Many exhibitors expressed frustration with the smaller crowd and the constant tariff chatter (more on this below) impacting work.

Key Topics

Tariffs

As of this writing, a short-term tariff deal with China has been achieved. Current understanding is a 90-day reprieve with the effective China rate down to 30%.

This is certainly welcome news to just about everyone. Even domestic producers were grumbling about the paperwork and administrative burdens of dealing with this issue. One client discussed the quick shift from China to Vietnam. Others were eager to hear about Mexico production opportunities. One company was offering a zero percent financing plan to assist customers with navigating tariff price increases.

We will continue to monitor this situation and hope a longer-term deal is achieved before the 90-day deadline expires.

Freight Rates

Many of our discussions centered around the potential cost increases of containers once they start flowing again from China. The longer this goes, the more impactful it may be.

HD vs BDNY

Numerous exhibitors and attendees were vocal about the cost and time involved in having two markets and expressed interest in how to consolidate into one larger annual event. Similar to the High Point vs Las Vegas debate, and Neocon vs Design Days (just around the corner next month in Chicago), Furniture Market Expos and Shows remain in a constant state of evolution.

M&A

Our team remains busier than ever with a balance of buyers and sellers. International buyers want access to the USA market. PE owners are anxious to “roll-up” their portfolio positions or sell assets they have held for 5-10+ years. Baby boomers are ready to retire and exit their ownership stakes. Banks are in a strong capital position and generally open to lending. And as the tariff picture becomes clearer, we expect a quick ramp up in announced transactions. In particular, we expect to see domestic upholstery manufacturers for sale. Call us if you are a buyer.

Hospitality remains a bright spot in the furnishing’s world, as residential players are still awaiting the long-expected housing starts and office players grapple with continued return to work announcements.

Final quote: “Now is the time to make a move,” reflected one CEO of a bigger player, as he described the economic landscape. “Strong players win in times of uncertainty.”

On a personal note, Las Vegas is a perfect jumping off point for seeing the great west of the USA. We took a few extra days and toured Zion and Bryce Canyons. Stunning. Give it a try next year.

Call us and let's talk.