Vegas Market Recap
The Stump team is back in the office after an exciting three days at the World Market Center in Las Vegas. This was the best winter market since COVID-19 struck in 2020, with strong attendance and generally positive attitudes.
With a challenging 2023 in the rearview, and most of the industry’s bankruptcies (hopefully) completed, our clients expressed relief and hope that this year will be better. Guidance for 2024 growth seems to average between 0-5%, with some improvement in margins and less overall uncertainty.
Retailers are returning to open-to-buy positions, and inventory levels have generally returned to normal levels. As one industry CEO told us, “Steady is the new up.”
There were several prominent newcomers this market (Markor, Home Meridian, and Giga Cloud, to name a few) and big shifts between buildings (Four Hands moved to a larger space in Building B generated lots of buzz). We met several non-exhibitors scoping out showrooms for July and 2025. ANDMORE is working diligently to continue growing this market.
A pessimist could talk themselves into a panic with the geopolitical noise in the news: multiple wars, problems in two major canals driving up container rates, and the federal deficit and debt (not to mention a looming Presidential election). However, most attendees felt cautiously optimistic and are looking forward to lower interest rates, improved housing starts, a rising stock market, and, what we all hope, is a normalization for the industry now that peak COVID is behind us.
How does one generate growth in a flat demand environment? Many savvy companies are reassessing their distribution strategies and looking for opportunities in multiple lanes. Some brands are exploring entry into the casual sector and hospitality is booming with an estimated 700,000 new hotel rooms being built in the next 2 years - that’s a lot of furniture!
E-commerce remains a long-term growth channel, while several e-commerce-focused suppliers are now pursuing a push into brick & mortar retail. For those seeking growth, there are different levers to pull – it will be fascinating to see how these trends play out.
As the industry learned when container rates reached upwards of ~$25,000 in 21/22, the world can change quickly. Concentrated product sourcing in any one location creates risk. Many companies pivoted to Mexico as a hedge two years ago, then returned to Asia when containers plummeted to $2,000 or less. Now rising costs have returned, thanks to multiple canal challenges, begging the question - where to shift sourcing?
Mexico continues to be a focus for some, while India is surging for others. We increasingly hear talk of Cambodia, and Africa came up twice during discussions in Vegas. Vietnam remains a key resource, as does domestic sourcing, with “Made in USA” gaining renewed interest and emphasis.
Our team had a robust year of M&A activity in 2023, and January is kicking 2024 off strong with several notable transactions. We expect to announce more acquisitions in the coming weeks, with a focus on whole home décor and domestic upholstery.
Quote of the Market: “I’m 6 years into my 3-year plan – let’s hope year 6 is a good one!” opined one CEO.
We are optimistic. Call us and let’s talk.