By Alan Wolf, YSN
That is the million-dollar — or in the case of the home furnishings industry — the $115 billion question.
With only two weeks into the new administration, the jury’s still out. But according to industry execs and analysts queried by business site Home News Now, there are potential plusses and minuses aplenty, making President Biden’s agenda a possible mixed bag for business.
First the good news. Mark Schumacher, CEO of the Home Furnishings Association (HFA), a BrandSource partner, cites Biden’s push for another COVID relief package as a big positive for retailers. “Let’s face it, when … that [last] stimulus came through, it meant a lot of buying power and good, solid business for our industry,” he told veteran furniture reporter and Home News Now founding editor Clint Engel.
Schumacher, who leads the nation’s largest furniture retailer organization, also sees positive signs in Biden’s cabinet appointments and the Senate majority’s committee picks. New Treasury Secretary and former Federal Reserve chairwoman Janet Yellen “gives us stability there that all of us need and want,” he observed, while Maryland’s Democratic Senator Ben Cardin, who now chairs the Small Business and Entrepreneurship Committee, “has always had a very favorable approach to small business.”
The HFA chief is also optimistic that the Biden administration will take a carefully considered approach to trade sanctions against Vietnam — a newly significant source of furniture and appliance production — which the U.S. Trade Representative has investigated for currency manipulation and alleged use of illegal timber.
“We feel good about the fact that this will, in our mind, be looked at carefully and that there won’t be knee-jerk tariffs put in place” that could result in higher, economy-choking prices, he said. “That’s a different approach we feel the Biden administration provides us.”
BrandSource’s Seth Weisblatt, director of merchandising for home furnishings, agrees with Schumacher, but only to a point. “I do believe that tariffs are going to continue to be a hot button,” he told YSN, “but I believe the Democrats were surprised about how the Trump tariffs went into place with little push back from the American people, and will seek to continue this tariff policy with other countries.”
“While the stimulus money will help in the short term,” Weisblatt added, “I think Biden should be focused on the 2022 and beyond time frame from an economic standpoint. There are real opportunities for growth in our home industry with the right kind of market and employment markets to support it.”
Furniture industry analyst Jerry Epperson of the investment group Mann, Armistead & Epperson, concurs — which is why he’s concerned about the return of inflation and the impact of extended unemployment benefits. “We’re still having a hard time finding workers for our furniture factories,” he told Home News Now. “We’re having a hard time getting people to work in furniture stores. It’s terrible, so I think [extending unemployment insurance] is a hindrance.”
Meanwhile, higher transportation, labor and raw materials costs, plus rising consumer prices, are already rekindling inflation, he argued, which will raise mortgage rates and put a crimp in the housing boom that has fueled much of the industry’s growth.
Epperson also takes Biden to task for failing to address a shipping quagmire comprised of port delays and unprecedented increases in container pricing. “I don’t see that it’s a priority for him,” he said.
Ray Allegrezza, executive director of the International Home Furnishings Association (IHFA), also has a bone to pick with Biden’s labor policy, fearing that his wished-for $15 an hour minimum wage could result in millions of workers losing their jobs. Likewise, the administration’s well-intentioned “Buy American” plan could add to the deficit and “impede other small businesses that have historically sourced components and goods from outside the U.S. and might now find themselves trying to source from a domestic supply chain that is currently struggling,” he told editor Engel.
But both Allegrezza and Epperson agree that Biden’s aggressive actions on the COVID-19 front bode well for the furniture business. ““Clearly, the pandemic has stalled our economy, put people out of work, shuttered many furniture stores and severely disrupted our industry’s already fragile supply chain,” Allegrezza noted. “Considering that during his first two days in office Biden signed 10 executive orders specifically written to combat the pandemic, I have to see this as steps in the right direction.”
Click here for the full Home News Now report.
BrandSource, a unit of YSN publisher AVB Inc., is a nationwide buying group for independent appliance, furniture, mattress and CE dealers.