HIGH POINT — Premarket this week had a pre-pandemic feel with lighter attendance from both retailers and manufacturers. Several exhibitors noted that, while a number of key accounts were in town, others who had been using the event to seek out desperately needed product opted not to attend as retailer inventories are starting to better align with demand.
Furniture Today’s count of Premarket exhibitors, which pre-pandemic typically saw numbers between 60 and 70 exhibitors, tallied 100 companies on hand this week, a significant drop from the 160 that exhibited last fall and an even more dramatic decline from the more than 300 companies that had shown at the height of the pandemic.
Although many manufacturers are still experiencing backlogs, a steadily rising number are now seeing light at the end of the tunnel and are beginning to flow goods more consistently, albeit at much higher shipping rates.
“We’re optimistic that capacity is going to continue improving throughout the year,” Mike Harris, president of case goods at Hooker Home Furnishings told Furniture Today. Hooker had two new collections — Big Sky and Santorini — on display at Premarket with broad selections of both on hand for viewing.
Doug Rozenboom, president of A.R.T. Furniture concurred, noting, “We’re starting to eat into our backlogs.”
Explosively rising freight rates and other cost increases the past two years have resulted in widespread price hikes to retail customers with few, if any, manufacturers able to avoid their sting. However, there was a widespread consensus at Premarket that container rates have peaked and may soon be settling although at much higher than historic levels.
“I hope we’ve peaked,” Harris said. My expectation is we’re going to see less volatility as the year progresses, but I think it’s fair to say that container prices have come in higher than anticipated.”
Containers remain in short supply for goods coming out of Asia causing even those with good contract rates to seek out availability on the more costly and volatile spot market. While reports of prices approaching $25,000 per container were not uncommon, depending on their destination, many manufacturers said they expect to see prices level in the $10,000 to $15,000 range in new contracts.
“Our biggest problem is getting customers to pick up containers,” said Bobby Papazian, co-owner, Napa Furniture Design. “shipping companies are not honoring contract rates.”
He, like others, noted that capacity is less the issue than getting the goods from factories across Asia to the U.S. “We have finished goods; we just can’t get them on a container.”
Jofran CEO Jof Roy described getting containers and vessels to bring goods to the U.S. as currently the biggest issue facing the industry. “Getting goods here profitably is going to likely be a multi-year issue,” he said. “Steamship lines know how to maximize the situation when there is robust demand, and they pull supply when demand lags.”
Freight costs and manufacturing issues are far from equally distributed with some segments impacted more than others. High-end European fashion house Eicholtz showed a range of new goods at Premarket and plans to have more than 200 introductions on hand in April, according to Alyssa Abrams, director of marketing.
Mike Wurster, president of Elements, noted that Mexico is rapidly becoming a more important global resource, citing a large number of recent introductions on Elements’ showroom floor as examples. “We’re having a lot of conversations about what we can pull from Mexico,” he said. Best known for its solid wood cases, Wurster noted that he’s starting to see a broadening of what’s available to include melamine laminates and paper finishes at marketable quality and scale.
“We’re building a team (in Mexico),” he said. “When we acquired Largo in 2018, that was one of the reasons is that they were already established in Mexico.”
The inconsistent availability of goods, whether the result of factory backlogs or container issues continues to plague product introduction cycles, with two sponsoring companies opting not to open their doors and others forced to show sketches in lieu of missing product samples. Consistent availability of finished goods for sale and market samples has been a challenge the past two years and has altered product introduction cycles.
“New lasts a lot longer than it used to,” quipped Len Burke, vice president of marketing at Klaussner Home Furnishings. He explained that even after introduction, the inconsistency of supply may delay when products hit selling floors and when consumers may get a first viewing of “new introductions.”
The result has been more targeted approach to product introductions that address key segments or fill necessary voids. “We’re trying to be more focused and effective in what we bring to market,” he noted.
For more coverage of Premarket see the March 7 issue of Furniture Today and stay tuned to FurnitureToday.com.
Originally posted 2022-03-03 13:30:27.