HIGH POINT — Wood furniture resources say they have enough product in the pipeline — both new and inline — to supply the marketplace once retailers reopen and consumer demand returns following the COVID-19 related shutdowns and stay at home orders earlier this spring.
The question many have been asking is not only when will stores reopen, but how quickly will business bounce back.
"None of us knows what demand is going to be once we get to the other side of this thing," said Fred Henjes, president and CEO of case goods resource Riverside Furniture Corp. "We think it will be 50% when stores come back on line and by June or July, 75%."
But even those guestimates were optimistic based on some private conversations during an unprecedented stoppage not just of retail business, but also related slowdown in shipments and production in countries such as Vietnam, Malaysia and India. In those countries, production either has slowed significantly in the case of Vietnam or stopped altogether, such as in Malaysia and India, due to government mandated shutdowns.
Even the High Point Market, the main event for spring and fall introductions has been put on hold at least until June, with many betting it will be canceled altogether until October.
Inventory flow
Thus, when stores reopen and the wheels of commerce start turning again, Henjes and others believe the biggest demand will be for in-stock goods and immediate shipment of inline merchandise, including proven bestsellers.
"Our biggest concern is making sure we have tried-and-true product back in inventory and flowing when we come out of this. I am guessing new introductions will be treated secondarily," Henjes said.
Others also are planning on making sure their inventories are well-positioned.
"Right now everything is on hold, everything but e-commerce," said Lee Boone, co-president of Home Meridian International, which includes Samuel Lawrence Furniture, Pulaski Furniture and motion upholstery resource Prime Resources International. "E-commerce seems to be moving right along. It stopped at the end of March, but it seems to be coming back. If you want to buy furniture right now, you almost have to buy it online, no matter where you are living."
Boone said it recently has been a waiting game to see when stores will open back up, including its top 10 accounts that represent 60% of HMI's business.
"Most of them have closed their stores," Boone said in early April. "They have canceled and delayed orders. It is not just the big guys that are doing that; it is everyone else."
Most were hoping by the time of the publication of this story, many stores would already have reopened.
Boone said the good news for HMI is that most of its customers are large accounts that are well capitalized enough to weather the storm and flow product "in a big way."
But even those dealers, he said, won't have a big appetite for brand new product the company was prepared to show at premarket and the April market.
"Right now, most dealers don't want to take a risk on new product," Boone said, adding that they want to focus their efforts on "something that is proven. We are focusing on our bestsellers, and we are in a good service position" with product available in its Madison, N.C., and Los Angeles warehouses, as well as warehouse facilities overseas.
"If anything, we have too much inventory and are waiting for the spigot to open back up," he said.
Positioned for recovery
Others also said they are in a strong inventory position. And like HMI, they will probably take product planned for April and hold it for an October introduction should the June market be canceled entirely.
"It depends on what business does as far as new goods are concerned," said Greg Noe, president and chief operating officer of case goods resource Bernards Furniture Group. "If business is good, they will bring in new goods. If it is not, I don't see them bringing in a lot of brand new stuff unless it is price driven.
"Some of our major customers are telling us 'just focus on sourcing our line stuff and stuff that is selling. Don't focus on new merchandise right now,'" he said.
Noe added that during the retail shutdowns it continued to ship product through online resources such as Wayfair. As brick-and-mortar stores reopen, he said, Bernards will continue to have plenty of inline goods in stock in its North Carolina warehouse facilities for both online and brick-and-mortar accounts.
Jamie Collins, executive vice president of case goods and upholstery resource Homelegance, said that the company also was still operating during the slowdown with shipments to e-commerce accounts.
"Our e-commerce business has held up relatively well, but the situation is still very fluid, and we still rely very heavily on our store networks," Collins said in early April.
He added that the company will be well-positioned during the rebound, with plenty of product available from its 10 warehouses in the U.S., two in Canada, plus its mixed container warehouses in Vietnam and Malaysia.
"Business has slowed to a stop at this point, but you can't stop containers that are on the water," Collins said. "We will be well-prepared with inventory. It is preparation by default."
Stanley Furniture has its own case goods plant in Vietnam and will be in a strong position during the recovery, said Walter Blocker, company owner. For one, he noted, Stanley had right-sized its operation well before the slowdown, positioning itself as a lean operation in tough times.
The slowdown, he added, helps the company get caught up on the supply of certain raw materials. This includes whitewood that is now reportedly more available due to lower demand from competitors that either already have too much finished goods inventory and/or have slowed production due to slower orders from the U.S.
Blocker also noted that the company is vertically integrated as a manufacturer, allowing it to develop and produce — under its own supervision — the right product at the right price points.
"We are priced as better, but we compete favorably at best, and we think … that is a good place to be in this economic climate," he said. "We also have worked to build relationships with key retailers and streamline our relationships with fewer customers, but higher volume. Those are the customers that will be the healthiest on the other side of (the) coronavirus."
These and other companies also have plenty of brand new product to show retailers that have the appetite for those goods. That's because most of that product was already shipped from Asia before retailers started shutting their doors.
Spotlight on new product
While many don't believe there will be an immediate appetite for new goods, many are being aggressive in their plans to market and show new collections in the coming weeks.
That includes Universal, which has created a landing page for its newest licensed collection with Coastal Living. As part of its digital promotion of the collection, it will provide digital images, including showroom tours that showcase the line.
This woven panel bed and bench are part of the new Coastal Living Getaway collection by Universal Furniture, which launched a new landing page where dealers can view the product online.
The company also plans to promote the line via social media where customers can receive details that pique their interest and lead them back to the landing page.
In mid-April, full-line resource Moe's Home Collection launched its Digital Market. This platform will let dealers see its newest additions online, which include some 120 SKUs across multiple categories in case goods and upholstery. The launch will cover from 40% to 50% of the new product mix initially with additional items being added in early to mid-May.
"The one thing we don't want to get caught up in is to stop product development; that is not what we are going to do," said Moe Samieian Jr., president. "We are slowing down our purchasing, but we are putting in new orders with our factories."
The Carson and Reed living room vignette by Moe's Home Collection is among the new products the company is showcasing on its new Digital Market.
As part of the Digital Market, new product imagery and specs will be in place for customers to see online and receive electronically.
In addition to the new product, Samieian said, the company will continue to be in a strong inventory position moving forward.
"Factories are asking if we need to cancel orders or slow our orders down as they are inundated with so many retailers or wholesalers that have gone in and tried to cancel or delay orders," he said. "From our side, we are not delaying much.
"In general, we want to let our product continue to flow. We want to make sure we have the inventory there," Samieian said, adding, "We don't want to be in a situation of having shortages."
The new Surfrider collection by Hooker Furniture is made with pecan and pine veneers, and it also features rattan, cane and rope accents.
Hooker Furniture has two new collections it previewed in its back room at the October market. After making improvements based on customer input, it planned to show them to a broader audience at premarket and the April market.
"I was very thankful for that," Jeremy Hoff, president of Hooker Legacy Brands, said of the decision to show the collections last fall. "We were able to receive feedback and made the product better based on feedback from our partners."
At premarket and the April market, Hooker also had third collection planned and is providing customers with photography and video showroom tours highlighting all three collections.
Hoff said all three will go into production in August and will be available from the company's domestic warehouse in October. This will allow customers to receive goods soon after the fall market.
"When customers finally see them at premarket or in October, we can say we have them ready to ship now," Hoff said of the new collections. "We don't have unrealistic expectations, we just want to be here and be open when people need us."
The company also has plenty of inventory on hand — or arriving soon — for dealers to receive between now and the summer months, well before the October market cycle.
"The decisions we are making right now affect us four to five months from now when we think this thing could break," Hoff added. "We just want to be ready when the customer is ready."
In stock and on the way
Case goods and upholstery resource Lexington Home Brands also has plenty of inline product in its domestic warehouses, with more on the way – including 89 containers expected to arrive in the U.S. by late April.
"We didn't cancel anything, we didn't delay anything, so we will have inventory," said Phil Haney, president and CEO. "As customers need it, they will find that Lexington has it in stock."
From the new Barclay Butera collection Park City by Lexington Home Brands, this dining set is named for the historic mining town in the Wasatch Mountains of Utah, reflecting the "laid back luxury of mountain modern living."
But he added that the company also has new product ready to flow soon too, including two new Barclay Butera collections, which are already in production and expected to ship in roughly 60 days.
In addition to getting digital photography for the new product, Haney noted that the company still is getting the showroom ready for what would have been an April market. This will allow it to provide dealers virtual showroom tours, something that he said Lexington has been doing the past eight years.
He added that the company is taking a cue from its response to the 2008-2009 financial crisis, when business also plummeted.
"When this happened in 2009, we came out of it really strong," Haney said. "We had new product in process and product in inventory, and when things cranked back up, we had inventory on bestsellers as well as new products."
While he acknowledged that dealer appetite for new product may be minimal, the company wants to be ready, whatever the rebound looks like.
"We will not miss a beat," Haney said, noting that he doesn't expect business to return full-speed overnight. "The only thing we will miss is seeing our customers in April."
He said that customers that want to see the product before a fall market can do so by visiting the company's High Point-area showroom. "For those who want to wait, we will show it to them in October," he said.
Looking ahead to October
While new product could be of some interest, many still agree that most dealers simply won't have the appetite, particularly as its unproven and untested in the marketplace.
Lifestyle Enterprise President Derrick Ng said the company has plenty of new product that would have been shown at the April market. However, while this has already arrived in time for the spring buying season, he said the company will keep it for October High Point or January Las Vegas.
"I think when business is back to normal, new lines will take time to launch, to test and to sell," he said. "They would rather buy something immediately that can be serviced, that is what the retailer is looking for. Business also may not be good right off the bat."
Ng added, "I think they will want something promotional that can bring customers back into retail stores so they can ship them immediately."
Legacy Classic Furniture had a large case goods introduction planned for April, with three new 23- to 25-piece collections along with four shorter bedroom and dining room groups, three new standalone casual dining sets and two new youth bedroom collections for its LC Kids youth furniture division.
"It was planned to be a big introduction for us, said Don Essenberg, president.
In addition to the new goods, the company has inventory in both its North Carolina and some in Vietnam, which it will bring to the U.S. as needed for its retail customers.
"Companies will be looking to replenish inventories fast and from the U.S., and we are positioned to do that all from our warehouse in North Carolina," Essenberg said. "It takes so long to get goods from Vietnam these days. I don't see that changing a lot. If there is an immediate need, you better be able to fill it from the U.S."
But the company is also looking to help its retailers in other ways too, including having its sales force help retailers find new ways to connect with the consumer, particularly those consumers that may have been in the market before the pandemic forced her to stay at home most of the time.
"From our perspective, if she needed a new dining room 60 days ago and her store closed and she has been told not to leave the house, when we recover, she will still need that dining room," Essenberg said.
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