Tupelo fights to keep furniture king

Federal Reserve Bank of St. Louis - Regional Economist, Jul 2001 by Greene, Stephen

A Postponable Purchase

Diminished consumer confidence and higher energy prices continue to take their toll throughout the economy, including the furniture industry. Those in the industry use the term "postponable purchase" to help explain slumping sales.

"Furniture is obviously a discretionary item," East says. "Consumers can delay the purchase of furniture for as long as they wish, and they do. If you're seeing utilities and automobile gas bills jump up a couple hundred bucks a month, that's a monthly payment for a room of furniture-a very nice room of furniture."

Says Holliman, "Maybe the consumer looks at that old sofa and decides it doesn't look quite as bad as she thought it did at first."

The industry was stung last year when retailers Montgomery Ward and Heileg-- Meyers Co. filed for bankruptcy, resulting in massive store closings-302 for Heileg-- Meyers, including 19 in Mississippi. Another retailer, Roberds, liquidated all of its stores, too. One of the ramifications of these closings is an inventory backlog, which, in turn, led to Lane's first layoffs ever in Tupelo last year. The company cut about 200 jobs.

Not everything these days is doom and gloom for the industry. Interest rates continue to drop for those looking to finance their purchases, and housing sales have remained relatively strong. On average, there is a lag of between six and 18 months between purchasing a new home and furnishing it.

"As goes housing, so goes furniture," says Jimmy Green, chairman of PeopLoungers Inc. of Nettleton, Miss., a $55 million company that also specializes in upholstered motion furniture. "Interest rates and housing are two things that definitely drive furniture sales."

Twice a year, you'd have better luck catching Elvis perform one more homecoming concert at the Tupelo Fairgrounds than you would finding an available hotel room in town. Each February and August, Tupelo dishes out Southern hospitality for several days to hundreds of furniture exhibitors and more than 30,000 buyers at the Tupelo Furniture Market.

What began with 35 exhibitors at a Ramada Inn in 1987 has erupted to nearly 1,000 exhibitors from around the world showing their wares throughout 1.5 million square feet of space. The show is the second largest in the country Only the High Point, N.C., market, established 74 years earlier, is larger.

V.M. Cleveland, Tupelo Furniture Market CEO, says that organizers originally thought of holding the market in the larger, more-accessible city of Memphis.

"But bigger is not always better," Cleveland says. "The manufacturers here had enough confidence that Tupelo could put on a good show."

Says the Community Development Foundations Rumbarger: "I think the manufacturers here at that time wanted people to come see their plants. They wanted buyers to see where their furniture was built so they could see the quality."

Cleveland says plans are in the works to expand the Furniture Market to 2 million square feet. He and his staff of 35 hope to top 1,000 exhibitors for the first time at the August show.