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Industry Forecast -1998

Furniture World Magazine


Prominent retailers and Trillium judges explain their plans and programs for the coming year.

It's 10 years now since the North American Free Trade Agreement became part of our lives, certainly an extraordinary 10 years with peaks of high, sometimes cockeyed optimism, and deeply pessimistic troughs when many long established suppliers bit the dust. The exhilaration of the Millennium gathers momentum daily, and the industry's vital signs appear strong.

AKTRIN's recently published Thomas McCormack's Financial Health of the Canadian Furniture Industry deals with profitability compared with the overall manufacturing industry, together with statistical data on manufacturers' major costs. Said AKTRIN President, Stefan Wille, "The performance of the home furnishings industry is closely tied to the general performance of the economy. If the economy turns sour, obviously furniture would turn sour too. But in general the business point of view is very, very positive. 1997 was an excellent year for the economy as a whole and the durable goods industries in particular as the successes in automobiles, housing starts and electronics filtered down to furniture and appliances. Next year will be extremely good. From a regional point of view, Ontario and Alberta with its oil will do very well. On the other hand, British Columbia has perhaps underperformed as has Quebec and most of the Maritimes, all of them below the national average. However, these regions will still have a very good year. Until the turn of the century, I don't see any clouds on the horizon. Economic fundamentals are good."

Space is sold out for the January Toronto International Home Furnishings Market, Saturday January 10 to 13 at Mississauga's International Centre with more than 400 domestic and foreign manufacturers represented. Jean Francois Michaud, Executive Vice President, Quebec Furniture Manufacturers' Association, producers of the show now in its twenty-fourth year, said "In 1996, Canadian residential furniture shipments topped $1.9 billion. Although the final figures are, of course, not yet in for 1997, all indicators point to all shipments topping the $2 billion mark." It's interesting to note, he added, "In a recent study by economists at CIBC Wood Gundy, unlike most other manufacturing sectors in this country, the Canadian furniture trade has consistently boosted productivity in recent years which provides a measure of protection against potential fluctuations in the value of the Canadian dollar."

TRILLIUM AWARDS: Another indication of good things happening is the dramatic increase in participation in the national Trillium Furniture Awards, also celebrating its twenty-fourth birthday. Manufacturers from coast to coast have entered an unprecedented number of new designs and concepts according to hard working Neil Devereaux, Ontario Furniture Manufacturers' Association's Director of Marketing and Distribution. He reported that "Judging was based on best of overall 195 entries. The competition becomes more national every year, four from the west, five from Quebec and, in Ontario, 27."

Neil saw "A much more eclectic look across the board, a blurring of the lines between styles, a little less formality, a more casual approach to life and living, choice to change configurations or groupings as one's needs demand, and certainly greater freedom for the consumer in decorating."

As always, 10 prominent retailers judged the Awards. They gained a unique perspective of what the industry has to offer this time around, and what we'll see on retail floors spring 1998. And, as our tradition demands, they polished their crystal balls to provide us with predictions based on Christmas Past and an educated view of Christmas Yet To Come.

SEARS CANADA: Dan Weare, National Business Manager for Furniture, Sear's Canada, said, "The economy will continue to grow. The government agrees it will grow around four percent and we can slightly outperform that figure. Suppliers who give value to product will get their market share. The consumer wants comfort in her home in this busy, crazy world of the '90s. Consumer confidence is slightly higher than it has been, but it wouldn't take too much to set things off to a downward trend so we should keep a close eye on it. Ten of our new Whole Home Furniture Stores will be opening in the next year right across the country. The philosophy fits the value principle we're offering." In trends, Dan advises we "Look for comfort in boomer casual!"

ORMES/ STARTOP: Doug MacDonell, Ormes/Startop, Gloucester, Ontario, enthused about "Hughie Owen's single-handedly making his mark with Kingsdown! His oversized mattress with its low profile box spring is great. And Canwood's solid Canadian pine, RTA engineered so a brain surgeon doesn't have to assemble it, is shipping all over North America in home office and bedrooms. Decor-Rest has produced beautiful transitional leather, well priced, they've done a superb job. El Ran is offering two great reclining condo sofas and an oversized love seat recliner."

Doug prophecies substantial growth during 1997, "and 1999 will be a boom year. In 98, our factories will be getting geared up, for example, producing the last Gibbard bedroom of the twentieth century, then the first of the twenty-first century. The next three years should be great. If you want to get excited about the furniture industry, now's the time!"

THE BAY: At The Bay, Dave Hunt felt the "Basic message is casual, casual elegance, casual comfort, a lifestyle story, not a lot of tight traditional looks. Sklar has developed quite an interesting marketing program, an overall umbrella of denim type stories, slip-covers on a particular range of looks. They're aggressively going for the denim side of the business. There's greater interest in the denims and dark blues rather than green this year. They are splashes of color, more solids, and chenilles are very strong. Durham Furniture continues to be strong in terms of their program and quality. Good basic strong fundamental submissions. There are nice (lamp) shade treatments from Anthony and Engelite."

W.B. JENNINGS: Bruce Hammond, W. B. Jennings Company, St. Thomas, Ontario, liked what he saw during the Trillium competition. "The slipcover look is handsome, I like it very much. If in a few years you want to make a change it's easy to do so. There are more open spaces in homes today and things are put together in one room with good serviceable fabrics. Motion is increasing in popularity and there's a lot of leather. We're definitely getting away from the old boys' club look. People are adding a pair of leather chairs with a cloth sofa. There are plenty of earth tones, but some wilder colors too; a bright fuschia slipcover.

"I hope for steady improvement in our economy, but it won't be like the gravy days of the '80s. With faster delivery, my inventory is half what it was 20 years ago. People have been pretty tight, but are starting to get better. I'm coming to the January Show with my order book. But I always do a lot of looking and comparing.

"1998 will be very similar to the year we have just experienced. My goal is to make it better. In our store, we deal with the children of the people my father dealt with. They trust us and depend on us. Also , seniors are a big portion of my business. Trust and loyalty are very important to us. We actually do a lot of sales on the telephone, sight unseen!"

BRAULT & MARTINEAU: In Montreal, Willie Poitras, Vice President Marketing, Brault &

Martineau, said there were "Not a lot of new trends, but what I saw that was very interesting were a lot of combinations, new looks in nice leather and fabric. Styling is a little more romantic. Colors are medium brown, earth tones, lots of nail heads."

"What is going to happen in '98? It's very hard to say, but I think we should be confident. The economy is coming a little bit back in the Montreal area; everything seems to be optimistic. We are expecting a really good next year at Brault & Martineau. We just opened a new store, so we will push a lot. This year there was some interesting new competition with Sear's Whole Home store opening here, so of course there's more advertising to the consumer. For instance, in our newspapers you see automobile advertising every two or three pages, so consumers are aware and think about cars. With more home furnishings retailers here there will be more furniture advertising, so the consumer will think of furniture. They will be more aware of furniture."

THOMPSON'S FINE FURNITURE: Jamie Thompson, Thompson's Fine Furniture, Aurora, Ontario, enthused, "We had a very good year and a half, and I look forward to future growth. People are beginning to ease up on their purse strings. I see steady growth.

"In trends, people are targeting in upholstery what the consumer wants; they have been able to manufacture goods at the right price with good looks. A lot of perceived value for money, some innovative things happening reacting to how people live. More casual, more home office to complement the computer age of information we're living in, more computer set ups and home theatre.

"In wood products, Leda's Country French is outstanding in oak, a dining room and a bedroom with a casual distressed finish, right on the mark.

"Leather is still quite strong and the Canadian market can certainly compete. Concordian's custom sofa is very nice.

"In metal, Origo has some nice product in beds, and there's a Loredo table with chairs, wrought iron with a wooden top, really country looking.

"Lighting has interesting shade treatments, stencils and cutouts, a lot of torchieres, some really neat glass work in different types of glass.

SCHREITER'S FURNITURE: Paul Schreiter, Schreiter's Furniture, Kitchener, Ontario, reminded us that "Last year I predicted a fairly strong year, but halfway through it seemed to have petered down a little. We're probably going to end up with the same figures as 1996. For 1998, I am hoping that the good housing starts will help our industry and, with that, there will be some increase in sales. I'm feeling somewhat threatened by the Asian stock market problems. The demographics we're going after are paying for houses, increasing RRSPs and experimenting with investments. I would like to believe there will be slow steady growth but it still seems to me to be an uphill battle. We'll invest in more aggressive advertising.

In trends, "Everyone feels safe with traditional and transitional styling. My impressions of the Trillium competition were good, more exciting lifestyle, very interesting.

"Marketing concepts are really becoming a factor, Palliser and Decor-Rest had excellent presentations.

"The upholstery people are finally addressing lifestyle casual, deep seated, super soft, they're here to stay for awhile. (For me) the jury is still out on slipcovers.

All in all, I thought the designs were great. Engel's lighting and price points are good."

EATON'S CANADA: Karen Spencer, Accessories Buyer, Eaton's Canada, said she was gung-ho on '98, but "I think you have to take it with a grain of salt. Buyers always are optimistic! Christmas will be good; customers are shopping all the stores, and the malls are full. Business has been good this year in furniture, and just look in the home sections of the newspapers at the number of new condos being built. Pick up the weekend newspaper and there are two sections for homes rather than one. People who are smarter than us think home furnishings is a growing area!

"I have always found the accessories' business exciting; the small ticket purchase is not as scary as when you are buying big ticket items.

"In general this year I see less fringe, more textures and really wonderfully soft cut velvets and chenilles, an opulence of feel. Everyone is working long hours and no matter how grand their furniture might be, they just want to come home, sink into it and relax.

"It constantly amazes me the new finishes that come out for lamps and picture frames, worn, weathered, it just keeps changing all the time, relaxed but not too contrived, less heavy sheen such as brass or silver which requires polishing. Frames are a bit more worn looking like you've had them for awhile. Instant heirlooms, that's what people want, like Grandma's attic. Boomers in their late forties and early fifties are buying lots of these products, they're starting to be collectors. In lighting, finishes are returning to a global feeling, Asian or Moroccan influences. And there is Oriental cushioning in silks. People who travel a lot bring home bits and pieces from around the world; it's a celebration of cultures."

TWOHEY'S FURNITURE: Linda Twohey, Twohey's Furniture, Peterborough, Ontario, feels "optimistic about 1998. It has been a funny year this year, the first half a little slow, the last six months very strong. I have a sense there will be a slow steady growth which is what it has been for the past five years. That is what we have seen in our business.

"There are some really interesting trends around designer looks. Decor-Rest, showed a beautiful combination of fabrics and some really good arm treatments, and lots of leather, extremely comfortable, unique looking with soft feel.

"In wood, Canwood has an interesting sleigh bed that does not look like RTA at very reasonable prices. I think the new metal and glass tables are beautiful, too. I liked the fact that some of the tables were smaller in size to put into smaller, downsized apartments and condos.

"Lighting is well priced with lamp shades that looked great, handpainted, really simply but tastefully done."

Everyone joins me in wishing you the very best of new years, prosperity, good health and happiness!