I just read this article and was shocked (in a ‘wow, how could they let this happen’-way) by the analyst’s assertion that furniture retailers need to replace 35% of the inventory on their showroom floors to ‘freshen up’ the assortment. Companies need to get out in front of this sort of issue rather than react after it has become a problem? Wouldn’t they be happy today if they had built out an efficient liquidation channel that recovers 20%-50% more than old fashioned liquidation? Had they done so with a solution like ours they would have been moving smaller amounts of stale product over time and would have avoided a ‘35% issue’. Now they will be creating a glut in the market and be selling from a position of desperation/weakness. They are sure to get artificially depressed liquidation prices for this stale inventory.

Here is the text of the article:

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(Source: High Point Enterprise) by High Point Enterprise, N.C.

Apr. 19–HIGH POINT — There’s one factor that furniture industry veteran and analyst Jerry Epperson says should push buyers to purchase new inventory at the High Point Market — a buildup of stale inventory.

“The consumer has seen everything you have, and they’re tired of it,” he told a crowd of marketgoers at an educational seminar Sunday morning.

Epperson, a furniture industry analyst with Mann, Armistead & Epperson Ltd., publishes the monthly Furnishings Digest Newsletter out of Richmond, Va. He said at the seminar the state of the furniture industry was best determined by the performance of the mattress and bedding sector.

“The bedding sector is the purest indicator of the health of our business because there is no inventory cushion that you’ve got to work through like most furniture categories,” he said. “The good news is that in October of 2009, (bedding) showed a modest gain.”

While mattress sales were down 10 percent for 2009, the newsletter has documented percent gains in the sector every month since October. February saw a 12 percent gain.

“The mattress sector is the best indicator we have of what’s to come,” he said.

Given the somewhat good news, he said retailers should be ready to replace at least 35 percent of their merchandise, which will give consumers a reason to come back to their stores again.

Exhibitors at the High Point Market partially agreed with Epperson’s view but said they still sensed a hesitancy from buyers to place new, large orders.

“If the economy was vibrant, I think the answer would be yes, retailers would be ready,” said Simon Hilton, marketing manager with Fauld Town & Country Furniture. “I just don’t know that it’s there yet.”

Meredith Younger Spell, a spokesperson for Thomasville-based Younger Furniture, agreed with Epperson, adding that retailers needed new color and designs in stores to attract consumers.

“It’s not just that things have been getting stale,” she said. “I think retailers need more color. People have been telling us they need more color to bring change to their floors.”

Epperson also told retailers at the seminar that they needed to find a way to connect with Generation Y shoppers, those born between 1977 and 1994.

“That’s where the growth is going to be,” he said. “They (Generation Y) don’t have time to shop like baby boomers do. They’re only thinking about where they’re going to be in the next five years or so. You’ve got to find a way to reach them.”

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