By Nancy Meyer
HIGH POINT, N.C.–A challenging economic climate won’t keep buyers away from High Point Market, where lighting and decorative accessories firms are ready with new goods and programs aimed at stimulating retail sales.
Vendors said they have modest expectations of turnout at this market, but expect the ones who make the trip to be looking at new ideas and concepts.
Now is the time for retailers to step up and be aggressive, said Andy Singer, principal of Visual Comfort.
“Buyers have more of a responsibility for creativity and for marketing, for driving business and for making people want to spend whatever the disposable dollars they have on home furnishings,” Singer said. “We’re trying to be as proactive as we can and aggressive as we can be.”
Visual Comfort has prepared a “robust product launch,” Singer said. “We hope it’s one that helps our dealers make more money and provide a profit opportunity.”
Singer added that Visual Comfort has expanded all of its existing lines and added new ones. In addition to Thomas O’Brien, Alexa Hampton, Barbara Barry and Michael S. Smith, Visual Comfort will introduce lighting from Suzanne Kasler to complement what she’s done for Hickory Chair. To display it all, the company has expanded its showroom by 1,000 square feet in the C&D Building.
“We feel when business is tough, newness is what sells,” said Ken Kallett, Dale Tiffany’s executive vice president. “That’s what accounts are looking for. They need to drive business on their floors.”
Dale Tiffany has about 50 new SKUs in Tiffany and crystal, in addition to all the new product shown in Dallas and Las Vegas in January.
Other significant launches include Pacific Coast Lighting’s new National Geographic Home Collection of table and floor lamps with a global story to tell; Stylecraft Home Collection’s Cabana Joe’s lighting launch that ties into the licensed wall decor it offers; and Sedgefield by Adams’ launch of Williamsburg. Murray Feiss is expanding its Martha Stewart lamp line with new styles and Uttermost is entering the accent furniture category to give a one-stop shop opportunity to its customers.
Some vendors fear buyers aren’t in a position to place new goods until they flush through their current inventory.
Further, buyers are pressuring vendors for lower-priced goods, which retailers feel consumers are more apt to buy, and are seeking lower prices for goods they are already purchasing, vendors reported.
This is only going to exacerbate the problem when vendors raise prices, which some have started to do this year and others are announcing at this market.
Like many other vendors, Visual Comfort has raised prices due to skyrocketing costs of all materials and labor, plus other factors, including the weakening dollar.
“We fight really hard to keep price increases to an absolute minimum, but we feel we still offer a terrific value for the types of things we’re making,” Singer said.
Dale Tiffany, like others, has sought ways to mitigate price increases through new designs, running leaner and more efficiently, and just absorbing them and running on a tighter margin, Kallett said. But for long-term sustainability, the company had to raise prices on its 2008 price list, he said.
“We know it’s also going to hurt business, but we have to pass it on,” Kallett said. “At the same time, we’re trying to be as aggressive as possible.”
The pricing issue stretches across all channels and product categories—it’s not unique to lighting. Currency fluctuations have made all Chinese goods more expensive, and new labor laws are forcing factory owners to raise prices.
“We’re caught in the middle of upward price pressure in China and downward price pressure from retailers because business is so slow,” Kallett said.
“As for our business, we still see a steady influx of orders,” Kallett said. “They’re not as big as they had been, but they’re still flowing. Our backlog is sufficient and we have the financial wherewithal to be able to float our way through this.”
Richard Giron, president of Emess Design Group, said the current economic climate is one of the most difficult he has seen.
“There are outrageous dynamics going on right now,” Giron said. “It’s a strategic issue we’ve never seen before.”
In addition to the currency volatility and labor issues, thousands of factories and subvendors in China have gone out of business, while many of those that are left won’t guarantee prices for longer than 60 days, several vendors said.
How does an American lamp company develop an 18-month program with a major retailer when the prices are moving targets?
“The retailer will not be accepting of a huge price increase,” Giron said, but vendors are forced to pass along some increases. “We have to justify it to them. It’s so tough right now.”
What vendors and retailers need to do is focus on factors in their business that they can control, he added. At Emess, “We continue to focus on offering value. If we can provide a recognizable consumer value proposition, in terms of design, color, texture, fabrication, then it’s a winning proposition.”
This market, Emess has prepared a major Cresswell gallery dealer program, complete with fabric, drapery, signage, risers, a freight program and salable lamps. The shop-in-a-shop concept was tested in one independent lighting showroom retailer and resulted in greatly increased sales and turnover, he added. “We’re upbeat—we’ve got gorgeous product,” Giron said. “We’re going to deal with what we can deal with—creating opportunity for our customers.”