No room for new furniture
Published: Tuesday, July 1, 2008 at 6:01 a.m.
Last Modified: Tuesday, July 1, 2008 at 12:51 a.m.
With consumers facing tighter credit, less home equity and more uncertainty about the economy, new sofas and bedroom sets are often the first items cut from the family budget.
Local furniture dealers said sales have never been so bad in the U.S. and even in the usually stable local economy. A handful of stores closed in recent months or are in the process of closing. And the malaise cuts across all segments - high-end and bargain brands from the bedroom to the living room to the kitchen.
"It's very low on the totem pole for disposable income," said Benny Walker, owner of Walker Furniture. "You've got to have clothing, Game Boys, you've got to eat out. A lot of things are in front of furniture."
Gary Jarboe agrees. He is co-owner of the La-Z-Boy Furniture Galleries on SW 34th Street that is closing in August.
"If it comes down to a big sofa or a big TV, they'll buy the TV first and they'll wait another year or two to buy the sofa."
More and more people are waiting to buy big sofas and will likely continue to wait for some time, according to the latest Florida consumer confidence report.
The report, which measures consumer attitudes about spending, hit record lows in its 25-year history in May and June. Perceptions about whether it is a good time to buy big-ticket items shattered the previous record low of 64 at 47 points in June.
"Based on these results, I would have to predict consumer spending in Florida to pull back dramatically in the coming months," said Chris McCarty, director of the University of Florida Survey Research Center at the Bureau of Economic and Business Research.
Adding to the furniture industry's woes are its close ties to the real estate market, which has been slumping since 2006 and creating ripples throughout the economy.
People who buy homes have leftover loan money or equity to spend, and buy furniture that better fits the layout or decor of their new home, according to Randy Shindle, co-owner of Furniture Country.
"In '03, '04 and '05, all of us in the home industry - and not just in Gainesville but the state of Florida - were experiencing the ride that the real estate market brought us, and certainly when the wheels started slowing down in late '06 and '07, that obviously has an effect on overheads," he said.
Furniture Country is closing its store at 4148 NW 13th St. in September and moving its Broyhill line into the larger store at 2330 NW 13th St., which gets more traffic, Shindle said.
"We're trying to put it under one roof instead of paying two light bills, two mortgage payments," he said.
Taxable sales at Alachua County furniture stores were down 15 percent in the first three months of 2008 compared to the same period a year ago, five times the 3 percent drop for all taxable sales in the county, according to the Florida Department of Revenue.
Statewide taxable sales for furniture stores were down 13 percent in the same period.
Orders at U.S. furniture manufacturers and distributors were down 8 percent and shipments down 7 percent in the first four months of the year compared to a year ago, and retail sales were down 5 percent in the first five months, according to Smith Leonard PLLC, a CPA firm that tracks the furniture industry. And that's compared to a down year in 2007, according to Ken Smith, managing partner.
"Based on what I'm hearing, I don't expect May or June to be a whole lot better," he said. "With gas prices and the cost of everything else up, anything that's deferrable people are just putting off."
Beds are not as deferrable for those who don't already have them, but those who do are also putting off their next purchase, according to Mike Zvoch, owner of Wayne's Bedding.
Sales of mattresses were down 2.1 percent in 2007, according to the International Sleep Products Association.
"It may not be the best night's sleep and you might know it needs to be replaced, but you can certainly wait on that if you have other needs to attend to," Zvoch said.
Ashley Furniture Home Store closed its Gainesville store and two others with the same owners late last year and some small stores such as Morrells Furniture have closed recently.
La-Z-Boy is closing in August after opening in December 2005.
Jarboe said they had a good six months before the bottom started dropping out.
"Every time you thought it's bottoming out, it wasn't. I'm not sure it's bottomed out yet," he said.
"The big part is economic uncertainty. Even people with money are just sitting on their hands waiting to see what's going to happen."
Jarboe said they decided to get out after receiving an offer on their building.
In the midst of the closures and consolidations, Walker is going through with plans to expand into a new building on SW 34th Street in July and keep the three stores on NW 8th Avenue. The higher-end Thomasville line is moving there and the store at N. Main and 8th Avenue will become a Rooms-4-Less with lower price lines.
"We decided some time ago to expand to get into the newer people in Gainesville," Walker said.
Several months ago, he said higher-end furniture was still selling to people less affected by the downturn, but now even higher-end furniture is off.
"Everybody is having a difficult time," Walker said. "Talk to somebody cutting hair and people are waiting two or three days longer, people are eating out less, they're wearing shirts twice before getting them dry cleaned."
Shindle said people who are going to make the investment in new furniture are investing a little more for durable fabrics and leather that will last longer.
Bill and Mary Sortino, both 52, of Gainesville were in Furniture Country on Monday afternoon to replace a sofa and loveseat they had given a son.
Bill said the state of the economy makes them shop around a little more.
Mary said they're shopping closer to home because of gas prices instead of checking stores in Jacksonville as they would have.
Although people are keeping old furniture longer, the upholstery business is also down, according to Debbie Glisson, owner of Artful Upholstery & More, siting her own experience and comments from vendors.
"People aren't redecorating since housing went down last year," she said.
She said business has picked up in the last few weeks, however.
"With gas prices, people aren't vacationing and it's too hot to go outside."
Shindle said he hopes redecorating business picks up with the trend for people to stay home and make their homes more comfortable.
Anthony Clark can be reached at email@example.com or 352-374-5094.
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