HIGH POINT – This week’s premarket had a pre-pandemic feel with lighter participation from retailers and manufacturers. Several exhibitors noted that, while a number of major accounts were in town, others who had used the event to source desperately needed products chose not to attend as retailer inventory is starting to thin. match demand.
Furniture Today’s pre-market exhibitor count, which pre-pandemic typically had between 60 and 70 exhibitors, had 100 companies in attendance this week, a significant drop from the 160 that exhibited last fall and an even more dramatic drop. compared to the more than 300 companies that had come forward at the height of the pandemic.
Although many manufacturers are still experiencing backlogs, a steadily growing number are now seeing the light at the end of the tunnel and are beginning to move goods on a more regular basis, albeit at much higher shipping rates.
“We’re optimistic that capacity will continue to improve throughout the year,” Mike Harris, president of crate items at Hooker Home Furnishings, told Furniture Today. Hooker had two new collections – Big Sky and Santorini – on display at Premarket with large selections of both on hand for viewing.
Doug Rozenboom, President of ART Furniture agrees, noting, “We’re starting to eat into our backlog.
Explosive increases in freight rates and other cost increases over the past two years have resulted in widespread price hikes for retail customers with few, if any, manufacturers able to avoid their sting. However, there was broad consensus in Premarket that container rates have peaked and may soon stabilize, albeit at levels well above historical levels.
“Hopefully we peaked,” Harris said. I expect to see less volatility as the year progresses, but I think it’s fair to say that container prices have risen more than expected.
Containers remain scarce for goods from Asia, forcing even those with good contract rates to seek availability in the more expensive and volatile spot market. While reports of prices approaching $25,000 per container were not uncommon, depending on their destination, many manufacturers said they expected to see prices between $10,000 and $15,000 in new contracts.
“Our biggest issue is getting customers to pick up the containers,” said Bobby Papazian, co-owner of Napa Furniture Design. “Shipping companies do not respect contractual rates.”
He, like others, noted that capacity is less the issue than getting goods from factories across Asia to the United States. “We have finished products; we just can’t put them in a container.
Jofran CEO Jof Roy described obtaining containers and ships to bring goods to the United States as the biggest problem facing the industry today. “Getting goods here profitably will likely be a multi-year problem,” he said. “Steamship lines know how to maximize when demand is strong, and they pull supply when demand is lagging.”
Transportation costs and manufacturing issues are far from evenly distributed, with some segments being more affected than others. High-end European fashion house Eicholtz showcased a range of new products at Premarket and expects to have more than 200 introductions on hand in April, according to Alyssa Abrams, chief marketing officer.
“We have around 80% in stock,” she said, adding that currently the company quotes 72 hours from the time the order is placed until the goods leave the company’s warehouses.
Mike Wurster, President of Elements, noted that Mexico is rapidly becoming a more important global resource, citing many of the recent introductions on the Elements showroom floor as examples. “We have a lot of conversations about what we can get out of Mexico,” he said. Best known for its solid wood enclosures, Wurster noted that it’s beginning to see an expansion of what’s available to include melamine laminates and paper finishes at marketable quality and scale.
“We are building a team (in Mexico),” he said. “When we acquired Largo in 2018, that was one of the reasons they were already established in Mexico.”
Inconsistent availability of goods, whether the result of factory backlogs or container issues, continues to weigh on product introduction cycles, with two corporate sponsors choosing not to open and others being obliged to show sketches instead of missing product samples. The constant availability of finished products for sale and market samples has been a challenge over the past two years and has changed product introduction cycles.
“New lasts a lot longer than before,” joked Len Burke, vice president of marketing at Klaussner Home Furnishings. He explained that even after introduction, inconsistency in supply can delay when products hit sales floors and when consumers can get their first taste of “new introductions.”
The result has been a more targeted approach to product introductions that target key segments or fill in needed gaps. “We’re trying to be more focused and efficient in what we bring to market,” he noted.
For more Premarket coverage, check out the March 7 issue of Furniture Today and stay tuned to FurnitureToday.com.