Opinion: Market, tenants are still victims of challenging times

For many exhibitors, attendance exceeded low expectations heading into market

LAS VEGAS — When case goods and upholstery resources said that the winter Las Vegas Market beat expectations, they almost universally meant that their expectations were low headed into the event.

That’s an important footnote to a story Home News Now posted on Friday that reported market was better than expected for many in the furniture segment. Such positive reviews were certainly good for a market that was looking for a strong rebound during the latest round of the pandemic.

According to International Market Centers, attendance overall was 50% higher than April 2021 with significant gains in international attendance from 50 countries and attendance from all 50 states.

“Las Vegas Market is back!” said IMC CEO Bob Maricich in a news release. “The buying power, activity and enthusiasm was at a level we have not seen in two years. Outstanding product presentations, engaging programming and the opportunity to come together again made for an unmatched market experience.”

While this was likely the case in most segments such as bedding, gift and accessories, almost no one we spoke to in the furniture segment said attendance was anything like it was two years ago or more. In fact, those who shared figures with us said that attendance was down between 25% and 50%, which made it feel more like a summer market than a typical winter market for some with a long history of showing here.

Of course, lower-than-normal attendance shouldn’t be a surprise considering the reluctance some have had traveling. A crowded plane, airport or market is simply the last place many people have wanted to be with the hovering presence of the omicron variant.

But there’s another reason attendance was stronger than expected at least in the furniture segment. Buyers appeared to have fewer vendors to shop given the number of empty furniture spaces throughout the market. As many know, empty market spaces were not uncommon even pre-pandemic. But this time, some floors — particularly  in  Building A, seemed mostly empty, giving the building the appearance of a struggling shopping mall.

Yes, buyers were seen roaming these floors. Yet one had to wonder what they were thinking as they passed by empty showrooms. The image indeed was startling, particularly for those who hadn’t been to the Vegas market in some time, myself included.

In fairness to the market, none of this should come as a surprise, particularly in an environment of historically high costs. For some, these costs could be making some markets wildly unprofitable at least for the time being, especially when you consider the added expense of travel to and from market not to mention hotels and meals. Then there’s the cost of shipping and setting up samples and then entertaining guests for the duration of the event.

Indeed, sales have risen for many, reaching historic levels in a period of still-strong consumer demand. Yet the industry also has been bombarded with historic cost increases namely in the form of container rates that often have exceeded the cost of the goods being shipped. Industry observers don’t expect these rates to come down anytime soon, which has many shifting their sourcing from the Far East to the Western hemisphere.

Materials costs also have risen, as have labor rates around the U.S. and the world. Whether you’re an importer or U.S. manufacturer, this is having an ongoing effect on pricing that is impacting what consumers are paying for finished goods. And this is all happening at a time when many fear consumers may have caught on to price inflation in the furniture business and, thus, are putting some purchases on hold.

And with High Point premarket and market just around the corner, the logistics of showing in Las Vegas just didn’t make sense to some, particularly in flowing goods to each market.

Another big reason why we may be seeing so many vacancies? Companies are still dealing with high backlogs. Thus, coming to a market to get more business and more customers — one of the many reasons to attend market — may not be top of mind right now as suppliers are not seeking new business, but are instead choosing to focus on getting shipments to existing customers.

“In defense of IMC, the world is not normal yet,” said one industry observer. “You can’t blame it on a show.”

The Las Vegas Market isn’t the only market affected by these challenges. There have been plenty of empty spaces in High Point too.

Obviously, the pandemic has forced many to rethink the way they do business. Some have chosen to skip a market or two to focus on lowering backlogs versus developing new product. Others have decided to participate in one major market versus two, instead filling in the gaps by showing their products digitally to retailers and designers around the country.

Of course most would wisely argue any chance to be in front of a customer is a good one. That’s especially true of markets, which are meant not only to show new products, but also to communicate face to face with customers about strategies whether involving the supply chain or enhancing distribution for certain key markets.

Maricich, of IMC, told Home News Now that Las Vegas attendance was roughly 60% of what it was in January 2020, but that it was up more than 160% from January 2021. And while acknowledging there were some showrooms not open this past month, he noted that there were far more that were not open at the summer and spring 2021 shows.

So his perspective cited in the statement quoted earlier in this column is pretty accurate when viewed from the lens of what’s happened in the past two years.

“What we ae seeing is markets rebounding dramatically because there is a need for them,” he told Home News Now, noting that Atlanta attendance was about 65% pre-covid. We are having (showroom) expansions almost like it was pre-covid times. For markets there have always been winners and losers and the winners are winning big. They are either winning because supply chain is better or they have onshored. My thought is along the lines of if you were there you got good business.”

Of course the decision to attend or show at any market — including the industry’s four major markets a year — is indeed a business decision and even more importantly, a balancing act that has to be respected by all involved. Now that there are more digital tools to showcase product, the industry simply has more ways than ever to get in front of customers.

Will we reach a point at which market attendance — and showroom occupancy — gets back to normal? We hope so. But we also have to ask ourselves what’s normal in this new environment.

Right now, that’s anyone’s guess.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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