High Point Furniture Market - October 2014
We had a terrific and upbeat six days walking through the International Home Furnishings Market complex, and seeing much of the 12 million square feet of exhibition space spread over 180 buildings, hosting over 2,000 companies and more than 75,000 attendees. The weather was perfect, and the energy was high.
Quote of the Market #1: when asked about how attendance was this market, one CEO suggested we "quit asking that question and start asking how much business is being conducted!" The new normal is that attendance charts and patterns are changing, but High Point has regained its prominence and momentum as the destination global market, and the future appears bright.
As baby boomers recede as the major purchasers of furniture and millennials and the younger generations emerge, we now see the lifestyle looks of softer, transitional and smaller scale furniture become the mainstream fashion, with traditional, 18th century and dark finishes going by the wayside.
We watched with interest the herd of 17 Amazon.com folks make their rounds, conduct seminars, and preach the gospel of one-day and same-day delivery via Internet sales.
Quote of the Market #2: When asked about his company’s Internet strategy, one CEO suggested that "he didn’t have a strategy but was thinking about getting one." We urge folks to get focused on the Internet as a meaningful distribution channel. Most analysts are suggesting that Internet sales today are 4-5% of total furnishings sales, and that will grow to 20-25% over the next generation. Get a strategy!
Deals – Deals – Deals: Lots of talk about mergers and acquisitions this market as the economy gathers steam, as capital becomes more available and as strategic and private equity buyers hunt for growth via M&A. We were pleased to represent Folio 21 in the announced sale to Holland House, and we will present several other deals in the fourth quarter from the residential, contract, hospitality and supplier categories.
The opportunity to sell a good business has been largely closed the past several years due to the 2009-2010 recession, the lack of bank financing, and uncertainty in the global economy. With slow but steady improvement in the US, many strong companies are gaining confidence to make an acquisition. Also, with the retreat of China as a dooms-day scenario for all US manufacturing, we are seeing plenty of re-shoring attempts in many sectors and some consumer sentiment towards "Made in the USA".
Lastly, it’s been 5-7 years since the go-go merger & acquisition climate of 2006-2008, so many owners are ready to sell purely from a stage of life viewpoint, wanting to exit now while there is a market and before the next recession comes calling.
So get your house in order, know what your company is worth, and call us if we can be of assistance.
Quote of the Market #3: "I have Market Brain" commented one senior executive, during the last day of market when she couldn’t remember what day it was, what meetings were scheduled, or when she was headed home. We’ve all been there for sure!