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Local furniture stores weather storm

October 14, 2007|By ARNOLD S. PLATOU

WASHINGTON COUNTY - As housing sales have plummeted across the nation, new tables and chairs are sitting longer in local furniture stores.

But at least three local stores are weathering the economic storm because they have other markets that are sustaining them, officials said.

"Just about everyone out there, from the manufacturing reps I talk to, to other people I have contact with in the furniture industry, there is almost no one that is exceeding the business of a year ago," said Mark Bikle, manager of Bast of Boonsboro.

Elizabeth Starnowsky, who recently sold Maidstone Interiors in Hagerstown to Davids Furniture & Interiors, agreed.

"Unfortunately, a lot of people moving out to this area are buying big houses and, unfortunately, can't afford to put things in them," Starnowsky said.

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Randy Barron, president of Red Barron furniture, bedding and flooring company in Williamsport, said it's not uncommon these days to deliver furniture to a $700,000-and-up house, "and see half the rooms are unfurnished."

Fortunately, none of these three businesses depends on the after-market from home sales.

"We've benefited from new homes, but the bulk of ours is redoing," Bikle said.

Going out of business

Many stores across the country are not so fortunate right now, according to an official at the National Home Furnishings Association in High Point, N.C.

"I was at a meeting in Lake Tahoe recently, when a retailer from Denver was saying she knew of 42 (furniture) stores that had gone out of business in the Denver area in the last year," said Mike Pierce, association director of communications and public relations.

Pierce said he couldn't confirm that number, but lately, "hardly a time goes by that I don't read of a furniture retailer going out of business."

According to The Furnishings Digest Newsletter, a research publication by association consultants Mann, Armistead & Epperson Ltd., of Richmond, Va., sales have slipped badly for many U.S. furniture makers.

The October issue shows, for instance, that with one exception, sales in the latest quarter fell compared to a year ago for each of the eight companies it listed.

For instance, sales by La-Z-Boy slid 12.5 percent to $344 million, sales by Bassett Furniture dropped nearly 14 percent to $75 million and sales by Ethan Allen slipped about 5 percent to $258 million. Of the eight, only Flexsteel posted a higher result, rising 1.75 percent to $114 million.

Pierce, whose association represents 2,500 corporations and about 10,000 store locations, said surveys have shown a definite tie between housing and furniture sales. The most recent survey he's seen said that within three months after someone buys a house, they will buy furniture.

The outlook for improvement isn't encouraging, he said, because normally, the best months for home furnishing are November and December. "And most home sales occur from mid-April to mid-October, so if you don't sell a home in those months...

"So, given the fact that home sales have decreased, then the furniture industry is in a tough, tough time," Pierce said.

That, coupled with the fact that credit standards - and lending - have tightened, some people will delay buying furniture "and that makes it very difficult," he said.

The profit squeeze

But local store officials said that hasn't hurt their businesses. Only 10 percent or fewer of their customers seek financing, and getting it hasn't been a problem, they said.

"Boonsboro, Maryland, doesn't necessarily mirror the United States of America," Bast's Bikle said.

"Maybe our store is atypical," said Bikle, whose store opened in 1837. "We've been selling to the fifth and sixth generations of customers, so we get a lot of people who are redoing existing homes."

Bast aims for the "medium to upper medium" market.

Red Barron, on the other hand, keys on what the store calls the "lesser expensive" market, which Randy Barron said has been less affected by the nation's economic troubles. "So if people are strapped from mortgages, they'll seek out someone like us," he said.

Still, Barron said, the profit squeeze is hard on everybody in the furniture business right now.

"From what I see and what the manufacturer's reps tell me, everybody is crying," he said.

Starnowsky said for Maidstone, as it will be for Davids, by far, the largest share of business has been with customers who are redesigning their homes.

"Up to 75 percent of what we do is custom," said Starnowsky, who is staying on with Davids as a designer. "We're a very, very service-oriented company, very hands-on."

She said the new homes side of her business began slowing down about two years ago. She said she doesn't see that market improving for "three to five years. Some people say seven."

Barron is more pessimistic.

Considering factors such as the rapid increase in furniture imports, forcing large U.S. furniture makers to close factories "left and right" and the growth of terrorism throughout the world, Barron said he doubts the furniture industry will ever bounce back.

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