High Point Market hopes for better weather, sales
HIGH POINT, N.C. — The recent severe winter weather throughout much of the country may limit activity at the spring High Point Market, which officially opens Saturday.
The semiannual trade show, which is not open to the public, tends to attract between 70,000 and 80,000 participants.
Several of the industry’s publicly traded companies reported lower sales in recent quarters, in part because of the snow and ice storms that discouraged consumers from shopping.
For example, Robert Spilman Jr., president and chief executive of Bassett Furniture Industries Inc., said Thursday that “though it is difficult to quantify, we believe that inclement weather hampered sales and deliveries in January and February.”
The manufacturer reported its first-quarter net income was down 14 percent to $843,000. Sales were down 5.3 percent to $75.6 million.
With retailers being challenged to sell current inventory, industry officials said it is likely that new orders may be dampened, particularly as the overall economy continues to grow at a frustratingly slow pace.
“Weather has certainly played a huge role in furniture sales in February and March,” said Ken Smith, director of furniture services for Smith Leonard PLLC, a financial-services group based in High Point.
“The weather has affected everything from suppliers to manufacturers and distributors, to shutdown of plants and distribution facilities, to trucking operations, to retail stores having to close, to customers not able to get to stores, and even when goods were sold, some could not be delivered,” Smith said.
January orders for home furnishings totaled $1.88 billion, a 2.4 percent increase compared with a year ago. Orders were $1.77 billion in December.
By comparison, retail furniture sales in February rose 0.3 percent from a year ago at $8.31 billion, according to the U.S. Commerce Department. Sales were up 0.4 percent compared with $8.28 billion in January.
The bad weather further compounded the industry’s already long list of economic challenges that include higher energy prices, tight consumer spending and price deflation. Add in uncertainty about federal budget issues, particularly as they affect consumers’ ability to buy a home or refinance a mortgage, and it’s possible that caution will reign once again.
Despite the weather, Smith said he believes that business will be solid for the traditional reason that retailers and consumers want new product to sell and buy.
“If there is such a thing as pent up demand in the industry, we certainly should have some now,” Smith said.
“But we still need housing to continue to improve.”
The market’s economic impact spreads well pass the High Point city limits.
A recent Duke University study estimated the annual economic impact of the market at $5.39 billion, more than 3½ times the amount calculated in earlier studies.
The Duke study was commissioned in April 2013 by the High Point Market Authority’s board of directors to measure the trade show’s economic muscle in comparison with other domestic and international furniture shows.
What accounts for the much bigger impact is the decision to broaden the market’s circle of influence to 22 North Carolina counties – stretching to Hickory and Lenoir – and eight Virginia counties, all within a 75-mile radius of High Point.
For Winston-Salem and Forsyth County, the main spillover effect is from hotel-room bookings and restaurants.
Richard Geiger, president of Visit Winston-Salem, said about 5,600 hotel room nights were booked by marketgoers for the spring 2013 market.
“We anticipate similar numbers this market,” Geiger said. “We’re finding more and more market participants are booking directly with the hotel, so it’s hard for us to account for those rooms, but they are also booking at a higher transient rate, which is a good thing.
Geiger said Visit Winston-Salem contributes $5,000 annual to the market that goes toward the cost of printing brochures of the shuttle routes that get participants to the market and back.
About the market
The High Point Market – the world’s largest trade show dedicated to residential home furnishings – brings together between 70,000 and 80,000 manufacturers and buyers from across the country and around the world.
The spring market, the larger of the two annual shows, officially begins today and runs through Thursday. It is not open to the public.