If you've got it, spend it!

While Angela Jolie collects orphans, her other half, Brad Pitt collects high-end (not child friendly) contemporary furniture. During his shopping spree at Design Miami/Basel he purchased hundreds of thousands of dollars of contemporary furniture.

Here's a sampling of what he purchased:

I can’t help but wonder what this stuff will look like after it’s been exposed to their child army. Kudos to Brad Pitt for keeping the high-end furniture market rolling!

Let the spin begin: K/BIS feels the heat

As the economy continues to challenge most industry sectors, trade shows and other marketing events are feeling the pain. The International Builders’ Show, (IBS), held in Las Vegas Jan. 20-23. reported an attendance drop of more than 90,000.
According to a statement released from the Kitchen/Bath Industry Show & Conference, (K/BIS), “As nearly all other industry shows have experienced a decline in exhibitors and attendees in recent years, false impressions have begun to spread about an equally steep reduction in numbers for K/BIS 2009. This is simply untrue.”
While the majority of the show’s large exhibitors are still scheduled to appear, the question remains will the attendees come?
To generate interest, the show is pulling out all the stops. This year’s show features a plethora of “celebrities.” The following “celebrities” are scheduled to appear:
“Extreme Makeover: Home Edition’s” Paul DiMeo,
“This Old House’s” Richard Tretheway and Carole Fruehauf,
John Gidding of HGTV’s “Designed to Sell”,
Aida Mollenkamp of Food Network’s “Ask Aida”,
“The Young & the Restless’” Steve Ford (son of President Gerald Ford),
Presidential candidate, Mike Huckabee.
K/BIS also is offering a lineup of business speakers, including economist Terry Savage and “Green to Gold” author Andrew Winston, as well as Harry Gianetti, former Vice President of Thermador, BSH, Mills Pride, and Elica.
IBS and K/BIS have different core audiences. IBS attracts more builders and general contractors, while K/BIS appeals to custom builders and higher end designers who cater to a recession-resistant clientele. The show’s attendance will be down from last year, but it probably won’t be as much as IBS experienced.
K/BIS 2009 will be held at the Georgia World Congress Center, April 30 – May 3.

U.S. leads world’s $307 billion production market

While low-cost imports continue to challenge the U.S. furniture industry, worldwide production of furniture is worth about $307 billion in U.S. currency, with the United States in the lead at 21 percent of total production. These findings are part of the World Furniture Outlook 2008/2009. The estimates are based on information from national and international official sources.
The seven major industrial economies, the United States, Italy, Germany, Japan, United Kingdom, Canada and France, comprise 50 percent of the world’s total production. Sixty-five percent of the entire world’s production is from developed countries with 35 percent coming from emerging countries, with China being the highest at 18 percent. China and Poland have had rapidly increasing production thanks to newly built plants.
The degree of openness in the furniture markets, or the ratio between imports and consumption, rose from 20 percent in 1997 to 30 percent in 2006. This increase was important in the United States, where the trade deficit was nearly $22 billion. From 1997 to 2007, the United States had an imports increase from $8.6 billion to $26 billion. U.S. imports presently are leveling off.
International trade of furniture has grown faster than furniture production and faster than international trade of manufactures due to the opening on the main furniture markets in the past 10 years. In 2008 and 2009 the world gross domestic product will continue to grow at a fast pace along with international trade of manufactures. World trade of furniture is expected to grow by 15 percent in 2008, and might amount to $121 billion.

4 Traits of successful office furniture manufacturers

When sales soften many office/contract manufacturers follow the same playbook. Most companies drastically reduce fixed and variable costs, which are followed by mass layoffs from the top down. Many also pull advertising and delay or kill product development and new products. If this is your game plan to ride out the latest recession, you might want to rethink your strategy.
According to an office/contract furniture manufacturer study from Velocity Partners, it has identified four key traits of successful small and middle-market companies.
1. Design furniture that differentiates and defines your brand and does not just fill a gap in the product portfolio.
2. Eliminate or sell any product lines, services and other activities that do not add value to the brand or company.
3. Focus on market segments that provide opportunity for growth and differentiation. Sell a solid brand and products in a new market segment today.
4. Focus on matching the right: designs, A&D specifications, end-user customers and products.
Velocity Partners reviewed the 2001-2002 recession through post-recession performance of 12 North American office/contract furniture companies with sales between $15 to 30 million that were profitable in 2000.

The economy will turn more positive in the latter half of 2009

This is not a fun time to be forecasting the economic outlook for 2009.
Not only are the prospects dim, but uncertainty is at an all-time high. One thing is certainly clear: the U.S. economy slowed in 2008. Economic activity in the third quarter declined 0.3 percent, the worst performance since a 1.4 percent decline in the third quarter of 2001 (thanks to the Sept. 11 terrorist attacks).
Add the turmoil in the financial markets and the current freeze in credit to this weak economic scenario and the outlook is clearly grim.
In fact, economists generally expect economic activity to slow even further into early 2009. For 2008 as a whole, economic growth is likely to average just 1.6 percent, followed by a very sluggish 1.0 percent expansion in 2009.
But the economy will turn more positive in the latter half of 2009. The Congress and the Federal Reserve have initiated a number of stimulus measures that, while taking time, will begin to be felt by the middle of 2009.
The Federal Reserve has lowered interest rates to just 1.0 percent (like they did following Sept. 11), which should stimulate economic activity once the credit markets thaw. That thaw should occur in early 2009 thanks to the Congress’ and the Fed’s efforts to shore up bank liquidity and build confidence in the banking system.
So, by the second half of 2009, GDP growth could reach 2 to 3 percent — almost back to the economy’s long-term growth potential. Although it will be a long, hard ride in getting there, the path should be much smoother by this time next year.

Surprise: Furniture orders are down

OK, so we all know that 2009 will be a challenging year, and I don’t think our new president will be able to offer a quick fix. Car manufacturers to furniture makers are feeling the crunch as wary consumers pull back. Until consumer confidence is restored luxury good makers and big ticket items will continue to experience decreased to flat sales.
Orders for new residential furniture fell by 28 percent in October 2008 compared to a year earlier, according to a manufacturer survey from High Point accounting and consulting firm Smith Leonard. New orders in October were down by 13 percent from September and year to date though October 2008 orders were off by 12 percent. Shipments of completed orders were 20 percent lower in October 2008 compared to October 2007 and year-to-date shipments were 11 percent less than the year prior.
As a result furniture companies are shedding jobs. I just read that Michigan-based Kindel Furniture Co. laid off 24 employees and is adding a four-day work week. Even though sales were slightly up for 2008, a waning backlog and fewer orders from High Point Market made the cuts necessary.