By Alan Wolf, YSN
Talk about the glass half empty or half full!
In a YouTube address that prefaced the recent International Home Furnishing Representatives Association (HFRA) board meeting, executive director and AVB contributor Ray Allegrezza compared the state of the furniture business to the famed opening lines of Charles Dickens’ Tale of Two Cities, due to the positive and adverse forces it faces.
As recapped by industry daily Home News Now, Allegrezza continued the analogy by pointing to the supply chain as both the sector’s biggest asset (when it’s seamless) and greatest liability (now).
“Even before the pandemic it was fragile an often knocked offline by price hikes, worker shortages, driver shortages, container shortages,” he said. “And now, they have all hit at once and have hit us harder than I can remember, thanks to the pandemic.”
The outlook, at least for the short term, is more of the same, Allegrezza forecast, as demand continues to outpace supply. “The supply chain will limp along at least into the third quarter, container costs will continue to be prohibitive, and traditional furniture retailers will be so busy in survival mode that they may not hear the ongoing sounds of e-tailers taking bite after bite out of their business models,” he said.
This will force home furnishings reps to become problem solvers, rather than order takers, “like never before.”
But not all is doom and gloom for furniture dealers. Allegrezza cited a retailer survey by BrandSource partner the Home Furnishings Association (HFA) and Piper Sandler that projected 15 percent sales growth in the fourth quarter. What’s more, according to separate stats from the Commerce Department, the National Association of Realtors and Realtors.com, it looks like there’ll be plenty of new homes, and sales of existing ones, just waiting to be filled with furniture.
Other furniture-friendly trends include lower unemployment and interest rates, looser lending standards, and a permanent shift to tele-commuting, he said.
Nevertheless, “We’re still sitting in the eye of the perfect storm,” Allegrezza stressed. “The irony is that while demand for our goods has never been stronger, our ability to meet that demand has never been more tenuous.”
See his complete video here.