by HIGH POINT — For most of us in the furniture industry, the semiannual High Point Market is the “Super Bowl,” with the fall exhibition traditionally the more strongly attended of the two shows. Some 50,000+ attendees will descend on a town with a population of 114,059 (per the 2020 census). Hotels fill up and restaurant reservations become scarce. With over 12 million square feet of showroom space — spread across 150 buildings — we all wear comfortable shoes for the many miles of pavement.
And what do we expect to hear this fall?
+ “Hoping for an uptick!” The phrase “survive to ’25” still rings in our ears. But we are hopeful for good news on housing, interest rates and renewed growth for the furniture industry. We do see green shoots already, certainly high-growth pockets like Austin, Nashville, Dallas, Charlotte, Raleigh and elsewhere are booming. Looking ahead, all are hopeful for a helpful Federal Reserve, easing geopolitical pressures, and tariff relief that could provide real tailwinds. We did hear of positive Labor Day sales, both retail and online, on top of strong August sales (up year over year and on the prior month, per the Census Bureau). And as reported by Axios, the Business Roundtable CEO Economic Outlook Index climbed 3 points to 94, the fifth straight increase and well above the index average of 83.
+ Tariffs? Many retailers and wholesalers received huge refunds from the government, generating solid liquidity for reinvestment into inventory, product development, deferred capex or debt reduction. Uncertainty remains north of the border, with existential outcomes for Canadian exporters if this political clash doesn’t find a swift resolution.
+ Stores or online? Wayfair is opening more stores. Arhaus, C&B, Pottery Barn and others are growing both storefronts and online sales. However, the press is full of daily/weekly store closures by the smaller mom and pops and independent stores. Clearly the largest retailers are mostly gaining share, while e-commerce continues to grow; all of this comes at the expense of the 40% of the retail market made up of smaller independent stores.
+ The strong are getting stronger! While the distressed situations in the industry tend to get most of the attention these days, we see many companies performing at a high level, with real revenue growth and strong profit margins. These companies are picking their spots, focusing on winning over new customers, developing home-run products, and investing in technology, people and processes to enable them to win for the long haul.
+ M&A remains a key element of our industry. Baby boomers account for a huge percentage of ownership of our businesses — and most want to sell sooner rather than later. PE has had a tough time this cycle and has not had much interest in acquisitions the last few years — this has led to more domestic and international strategic buyers than normal, along with some less traditional sources of private capital (e.g. family offices, independent sponsors, search funders, etc.). We expect many announcements to be made over the coming years as this trend plays out.
We look forward to seeing everyone in High Point. Call us!
Bo Stump is a partner in Charlotte, North Carolina-based merger and acquisition specialist Stump & Co.
