10 reasons to support local business

Here’s a little something different this week. This article was produced by the Institute for Local Self-Reliance, as part of its Community-Scaled Economy Initiative, which produces research and partners with a range of allies to implement public policies that curb economic consolidation and strengthen locally owned enterprise.

1.  Local Character and Prosperity

In an increasingly homogenized world, communities that preserve their one-of-a-kind businesses and distinctive character have an economic advantage.

2.  Community Well-Being

Locally owned businesses build strong communities by sustaining vibrant town centers, linking neighbors in a web of economic and social relationships, and contributing to local causes.

3. Local Decision-Making

Local ownership ensures that important decisions are made locally by people who live in the community and who will feel the impacts of those decisions.

4.  Keeping Dollars in the Local Economy

Compared to chain stores, locally owned businesses recycle a much larger share of their revenue back into the local economy, enriching the whole community.

5.  Job and Wages

Locally owned businesses create more jobs locally and, in some sectors, provide better wages and benefits than chains do.

6.  Entrepreneurship

Entrepreneurship fuels America’s economic innovation and prosperity, and serves as a key means for families to move out of low-wage jobs and into the middle class.

7.  Public Benefits and Costs

Local stores in town centers require comparatively little infrastructure and make more efficient use of public services relative to big box stores and strip shopping malls.

8.  Environmental Sustainability

Local stores help to sustain vibrant, compact, walkable town centers-which in turn are essential to reducing sprawl, automobile use, habitat loss, and air and water pollution.

9.  Competition

A marketplace of tens of thousands of small businesses is the best way to ensure innovation and low prices over the long-term.

10.  Product Diversity

A multitude of small businesses, each selecting products based, not on a national sales plan, but on their own interests and the needs of their local customers, guarantees a much broader range of product choices.

 

Why I sell furniture

Yes, I know it is a little self-indulgent, but I thought a few folks might be interested.  Why do I sell furniture?

I had worked in almost every aspect of information technology for two and half decades.  Because it is a volatile industry, there were occasional periods of unemployment and during one of them I had made some Adirondack chairs for myself.  I found I really enjoyed the process of making furniture and when my wife & I moved into the country and I had a big shop, I started making furniture for my house.  I discovered I had a hobby and, with employment by state government, a steadier job.

Most of the furniture I made was in the craftsman/mission style, suitable to my house. It matched my other furniture and it was mostly straight lines (easier to cut than curves).  I made about a dozen pieces and I got to know about different species of woods, their qualities in woodworking, various wood finishes and joinery.


When the government went through one of its periodic contractions, my division was cut by about 20%.  Gee, I thought, if I could be cheap to keep, maybe I could stay in my job longer, so I went to half time with the intent of opening some kind of business.  My wife had a fondness for retail because her mother had a retail store when my wife was a girl.  So we asked ourselves, what kind of business does Olympia need?  We decided our town needed some place that sold good, used furniture.

There had been antique stores and new furniture stores but we wanted a business that would reflect our personal ethic of recycle and reuse.  Good stuff is made to last and it seemed a shame that folks would take their good, used furniture to the landfill because there was nothing else to do with it.  We began meeting with furniture wholesaler reps, looking to find scratch & dent furniture that we could repair and have available for sale.  We started frequenting auctions, yard sales, estate sales and anywhere else we could find good furniture.

Like many other towns, business in Olympia was moving away from the central core of downtown to the periphery.  After considering a number of different locations, we figured we’d like to have a business downtown, to support other local businesses and to help keep the unique character of downtown Olympia alive.

We started our research in how to run a business and began shopping for used furniture and we were rapidly filling up my shop.  Finally, we found a building available for lease (it was the old South Sound Printing building) and worked like dogs for a month to paint, clean & rehab the building to convert it into a retail space.  I remain eternally grateful to our friends for helping out with the hard work.

At last, we had a store…and, ten years later, we’re still in the same location, selling gently used, consignment and new home furnishings.

Current Economic Impacts on the Furniture Business

“The only thing we have to fear is fear itself.”    

                -FDR

                                “…and zombies.  It is good to be scared of zombies.”

                                                -KA

Uncharacteristically, I’ve spent several months deciding whether to write this column, but I’ve spent a lot of time thinking about this and, heck, it is my column, so here goes….

Have the economic woes that affected other businesses affected the furniture industry?  You betcha.

Americans spent $77.1 billion on furniture and bedding in 2008.  To give this a sense of scale, we spent $41.2 billion on our pets in 2007.  During the first half of 2008, furniture sales were down 9.3% over the previous year and, and in the just the fourth quarter, down 28%.  As we buy more of our furniture at Wal-Mart or other non-furniture stores, sales in furniture stores dropped 11% for the year.

And these numbers play out in the details.  Ethan Allen is closing their Pennsylvania upholstery plant.  Shermag, in Canada, has stopped domestically making furniture (they made great maple pieces).  More locally, Stanton International in Tualatin, OR, has closed their doors. Wickes furniture, a retailer in more than a dozen locations in California and Oregon, quit business.  South Coast Home Furnishings Centre lost $63M in value and is in receivership.  Underhill, a Seattle based business, is closing 4 stores.

Tempur-Pedic  sales fell 35% in the fourth quarter (although they still had profits of more than $1M).  Williams-Sonoma is cutting staff by 18% (that’s 1,400 jobs).   Sealy reported a $42M loss last quarter (that’s 26.2%).  Gottschalks, out of Fresno, filed for Chapter 11 bankruptcy.  Mainstreet Delivery has filed for Chapter 7 bankruptcy.  Macy’s is closing 11 stores.  Yarn supplier R.L. Stowe Mills is closing after 108 years in business.

Not surprisingly, this is, in part, a side effect of housing sales.  After bottoming out at 4.67M in 2008, single-family home resales are expected to rise to 4.84 in 2009 and up to 5.39M in 2010.

Not all the news is bad, of course.  There’ll never be a government bailout of the industry, there’re too many players.  Big fish eat little fish and the biggest businesses will use this opportunity to acquire smaller shops.  Wolf Furniture opened a 24,000 square foot store in Pennsylvania.  Knoxville Wholesale Furniture opened a 93,000 square foot store in Tennessee.

So, what’s the outlook?  Analysts expect a 2% future drop in furniture sales in 2009 (to $75B) and a rebound in 2010 to $78.2B.  Is it going to save you money?  Probably not.  There’s an expected .7% drop in the wholesale price which translates into a 1% drop at the retail level.

What’s my advice?

If you can afford it, buy it anyway.  The dollars you hold in your hand are intrinsically worth less (because of inflation) as time goes on and, as interest rates drop, the interest on a savings account approaches nil.  You might as well get something tangible for your money.

Shop smart.  The internet offers oodles of opportunity to compare prices and to do your research to be sure you have the best options available to you.  Compare not just price, but quality.  If you plan on keeping your furniture for a while, be sure you’re considering the life cycle cost not just the sales price.  Like my daddy said about buying tools, “life is too short to buy cheap tools”.  Give consideration to buying used items; they really don’t make ‘em like they used to.

Buy local.  It is your dollars spent locally that maintain the schools, roads and other infrastructure that makes Olympia a good place to live.  Yes, you may spend a bit more for buying locally but the dollars stay in our community and make it better.  When you shop with a local small business person, you’re dealing with a neighbor, and they’re likelier to give you good advice.

And, above all, don’t be scared.  I haven’t seen any zombies.

Las Vegas Market

I just flew back from the furniture market in Las Vegas and boy, are my arms tired…and my feet.  Las Vegas is the Home of Wretched Excess (Humvee limos? Male Joan Rivers impersonators?) and the furniture market is no exception.  This year’s show had 1500 companies showing their wares in 2.6 million square feet of show space to approximately 68,000 furniture buyers.

The show occupies 3 venues.  The World Market Center is a 10 story building with 1.3 million square feet of space, roughly equal to 27 football fields.  The temporary Pavilion buildings add another 350,000 square feet (or 9 football fields) and 2 floors of the Convention Center add another 1 million square feet.  And, yes, my wife and I saw it all.  Trust me on this, after the first hour, most of the furniture all looks the same.

So, as the most insanely bored amongst you might ask, what’s new?  For colors, a brown-black usually called espresso is the new, hot color.  Espresso is the new, well, everything.  There’s still a smattering of oak, maple and mahogany (the latter is usually just the color, most real mahogany is long gone) but beds, dressers, sofa legs, etc. are probably 90% espresso.  Upholstered goods are most commonly neutral earth tones in beige, tan, browns and greens.  Lime green is increasingly popular.

There remains a goodly amount of what I call semi-Tuscan style furniture best suited for McMansions (overstuffed with rolled arms, brocades, tapestries in muted earth tones, etc.).  I saw three vendors who only sell tassels, for instance.  But most of the styles of furniture have incorporated many of the retro revival look with an Asian influence.  Clean, but stylish, lines where the shape of the object creates its style.  I guess it has to, since it is all espresso colored. This means that headboards may be the standard rectangle but with a gentle curve to the edges.  Sofas are frequently square lines rather than rounded curves.

The Mission style vendors looked lonely and disappointed, but that may just be because of their gambling losses.  Southwestern styles were nearly absent.  I only saw 2 or 3 vendors of cowboy furniture.

Home décor items provide the color.  Many of the vases, lamps, statuary, etc. were in brilliant reds, blues, oranges and greens.

The Asian influence is not surprising, since I would guess that 80% of all furniture is now imported from China.  The good news is that this keeps the price down and it is easier to find solid wood furniture.  The bad news, you can imagine for yourself.  Most of the vendors accept the need for imports with a shrug of their shoulders as inevitable.  When was the last time you could buy a t-shirt made in the US?  And the quest for ever-cheaper production continues.  I saw many more Malaysian- and Vietnamese- made furniture than I did a year ago.  Many of the companies are only selling container-sized loads of furniture, eschewing any US-based warehousing which is the beginning of Chinese vendors entering the market selling directly to retailers, rather than through wholesalers.

I’m pleased to say that ecologically-sound furniture is increasingly popular, although still hard to find.  I found a new Washington-based business that will be importing solid wood furniture made from bamboo and I hope to start selling some their items in a couple of months.

The advent of more top-end mattresses in the market has lead to a slew of middle-line mattresses incorporating many of the same features, such as memory foam.  As for the business side, furniture sales are nearly universally flat or down slightly, which will probably lead to more sales in the retail outlets.

My advice?  Buy the best quality you can, buy local when you can and never hit on 17.