Leaving lost wages
The cool quiet of the marble stairway to the Radio Building’s mezzanine contrasts with the carnival atmosphere outside on Main Street. A performer on stilts sidesteps a woman leading a pig. It wears a vest advertising a furniture maker. High Point, banners on lampposts proclaim, welcomes Sri Lanka, Netherlands Antilles, Haiti. Men and women in suits scurry by, clutching order books and chattering in foreign tongues.
The nine-story Radio Building is old, built in 1922 as headquarters of Commercial National Bank, its mahogany trim and other features restored to past grandeur. High Point’s furniture market is even older, dating to 1909. Like almost every inch of available space downtown, the mezzanine doubles as a furniture showroom this week. Nearby stand the 13-floor International Home Furnishings Center, with 3.5 million square feet — 80 acres, the size of a small farm — and the Showplace convention center, smaller but striking with its arches and wavelike roofline.
Market officials estimate that 80% to 90% of downtown buildings — 188 of them, big and small, new and old, with tax value totaling nearly $700 million — are part of the show. Twice a year, it brings to town more people, from across America and 110 foreign lands, than live here. It’s the world’s largest furniture marketplace, where manufacturers introduce their lines and buyers for retailers place their orders — the spring show for what will be in stores this fall and the fall show for next spring — and no event in North Carolina equals its economic impact, boosters say. The furniture shows are here because this is where the industry was centered. Once.
Now, the High Point market’s future is in jeopardy. Las Vegas, 2,000 miles distant and light years away culturally, has set its sights on attracting the tens of thousands who swarm to each High Point show by building a new home for the market and leveraging its advantages in entertainment, accommodations, restaurants and glamour. With furniture manufacturing spreading around the globe, going to Las Vegas can make as much sense to buyers as a trip to High Point.
This morning at the end of April, a man and woman are talking in the Radio Building mezzanine. Liz Zimmermann is vice president of sales of Presidential Seating, a Commerce, Calif., chair maker. She lowers her voice, as if confiding a secret. “Las Vegas will eventually be the only one. It won’t happen overnight. It’ll be gradual. A lot of the big guys — the North Carolina manufacturers — aren’t going to go quite yet. But it’ll happen eventually.”
Talk like that is everywhere this market, heard on buses, in restaurants, over cocktails: Can tradition and grit stand up to location and glitz? “Las Vegas is for people who mix entertainment with business,” says Paul Toms, chairman and CEO of Martinsville, Va.-based Hooker Furniture. He’s also chairman of the International Home Furnishings Market Authority, which organizes the High Point shows. “Most people here aren’t interested in anything but a good meal and going to bed after putting in 12 hours a day at the market.”
Las Vegas might be the Entertainment Capital of the World, but it’s not the Furniture Capital of the World. It has 120,000 hotel rooms, but it doesn’t have an 80-year-old, four-story building in the shape of an ornate chest of drawers, complete with handles. It has a mammoth airport served by all major airlines, but the only furniture distinctly associated with Las Vegas heretofore has been topped with green felt. “We’re the largest furniture marketplace in the world, and the High Point brand is our strength,” says Brian Casey, a Chicago trade-show expert who became the Market Authority’s new president in March.
Without the market, downtown High Point would be a veritable ghost town. “Most everything is somehow connected to the market,” says Tammy Nagem, vice president of operations of the Market Authority, created in 2001 to promote the shows and manage their daunting logistics. Losing the market, she says, is “a thought I don’t even want to entertain.”
What happens in Vegas, the ads say, stays in Vegas. A lot of people are praying that it won’t be the International Home Furnishings Market.
On April 28, the spring market’s opening day, David Palmer glides up and down showroom escalators and squeezes into the shuttle buses that whisk buyers around town. He shows more than a casual interest in his surroundings. Palmer is general manager of the World Market Center in Las Vegas. Like many connected with it, he soft-pedals the threat to High Point. “Gosh, we’re the Little League compared to the World Series.”
That’s not what the statistics say. Palmer is overseeing construction of a futuristic-looking, eight-building complex that will total about 12 million square feet of furniture showroom space, approximately what High Point has. The cost, borne by private investors, will exceed $1 billion — at the current pace, by a lot. Two buildings, with about 2.5 million square feet leased by exhibitors, are complete. Ground will be broken for a third this fall, and he expects all eight will be done by 2015.
The first two Vegas markets, last July and in February, each attracted about 1,200 exhibitors, nearly half High Point’s total, as well as about 50,000 buyers and sellers, half the 97-year-old market’s draw this spring. Analysts say the premiere Vegas shows, in effect, finished off a declining, 90-year-old home-furnishings market in San Francisco. So much for tradition.
“Vegas is clearly a competitor already,” says Ray Allori, marketing manager of Lane Home Furnishings, part of St. Louis-based Furniture Brands International, the largest U.S. manufacturer. As he guides buyers through Lane’s more than 100,000 square feet of exhibit space in High Point, a group of Chinese manufacturers — they build much of Lane’s furniture — watch the reactions to their work. Lane, founded in Altavista, Va., in 1912, showed furniture at Las Vegas’ first two shows. “We were so concerned that it was going to be just a play land that we offered a promotion to buyers for placing orders. We were surprised to find that buyers wrote more actual orders than they do here.”
Another big manufacturer, Lenoir-based Broyhill Furniture Industries — also part of Furniture Brands — exhibited at Vegas and plans to expand its 20,000-square-foot presence there. Though it has 130,000 square feet in High Point, orders in Las Vegas compared favorably. “We’ve got our feet in both camps,” President Harvey Dondero says. “We’re hedging our bets for now.”
Lane and Broyhill, which traces its roots to 1905, are among many brands that grew up with what grew out of High Point. In 1889, 30 years after the town was chartered, High Point Furniture Manufacturing turned out its first piece, an oak office desk. A lumber salesmen and two merchants each had invested their $3,000 life savings, betting on its location in the middle of the state’s hardwood forests, amid masses of rural people desperate for work, and transportation. The town was the highest point, hence its name, on the North Carolina Railroad, which linked it to the nation’s major markets.
Along the railroad and its feeder lines, factories sprang up. By the time the first market was staged in 1909, High Point was the center of an industry that stretched from Asheville to Durham. Its core — Furniture Alley — ran through the foothills from Hickory to the Blue Ridge in Virginia. “It occurred to manufacturers that instead of loading their products on wagons and taking them around to retail stores, it would be easier to bring the buyers here,” says Judy Mendenhall, a former mayor who retired in March as president of the Market Authority.
As workers mastered their craft, North Carolina won a reputation for quality furniture, and the industry came to dominate the economies of many communities. In nearby Thomasville, a 30-foot-tall reproduction of a Duncan Phyfe dining chair stands downtown. Thomasville Furniture was founded there in 1904. But since the 1980s, furniture manufacturing has plummeted in North Carolina. Employment peaked at about 90,000; today, it’s around 50,000. Time was, about 60% of the nation’s furniture was made within 200 miles of High Point; now 43% of what’s sold in the U.S. is imported. Nearly half of that comes from China.
High Point and Furniture Alley towns have managed to hang on to much of the design, marketing and administration. But manufacturing has nosedived, especially since 2000. Case goods — wood furniture, the bread and butter of the Tar Heel industry — have been hit hardest. In Davidson County, just south of High Point, about 9,000 furniture jobs have disappeared since 1992. The reason is simple: too much global capacity, too much cheap labor overseas. In fact, in the Internet era with manufacturing gone global, some question the need for a market. That’s an idea that Dondero, Broyhill’s president, derides. “It’s the most effective selling dollar you’ll ever spend. No dealer in America is going to buy a couch without sitting on it.”
But as Asian imports increase, the site of the showroom where they do that sitting might shift. At the spring show, rumors fly. One is that the market will move not to Las Vegas but even closer to the new center of production. As he drives a shuttle bus ferrying buyers from outlying parking lots to downtown showrooms, Stuart Crawford wonders. The retired president of Crawford Furniture, a Jamestown, N.Y.-based manufacturer, he moved to High Point to stay in touch with the industry. His company first exhibited here exactly 50 years ago.
“Beijing,” he says. It’s the host of the 2008 Olympics. “I wouldn’t be surprised if the market doesn’t move to some of that space. By then, China will have control of about all the wood products.” Dondero and others doubt buyers would make such a long trip. A more likely scenario: Las Vegas becomes a West Coast market, capitalizing on its proximity to Asian manufacturers. That would weaken but not doom the High Point market.
As the spring show winds to a close the first week of May, there’s news to digest. Using a new registration system to obtain the first accurate count of attendees, organizers are surprised when it tops 100,000. Their previous best estimate: 70,000 to 80,000. But two announcements sober some of those still here on the final day. One is that Lacquer Craft Manufacturing, which owns Universal Furniture in High Point and Legacy Classic in Burlington, is buying Craftmaster Furniture in Taylorsville; Lacquer Craft is a Chinese company. The other: Furniture Brands is closing the last Thomasville Furniture plant still open in Thomasville. About 280 jobs will vanish.
With billions of dollars on the table, neither side can blink. Vegas holds a strong hand but it must pay off. The two completed buildings left developers with $500 million debt. High Point’s investment is spread among many owners; the largest building, the International Home Furnishings Center, is owned by Bassett, Va.-based Bassett Furniture, Philadelphia-based Lincoln Financial Group and the family foundation of Randall Terry, late owner of the local newspaper.
But High Point’s stake is more than just real estate. A study last year by UNC Greensboro economist Andrew Brod estimates that the market pumps more than $1.2 billion into North Carolina’s economy and is directly responsible for 14,000 jobs statewide. These are not just stilt-walkers distributing advertising pamphlets but designers, carpenters, electricians and others who work behind the scenes year-round.
As the spring show unfolds, preparation for the fall show goes on. LeAnna Graves, advertising director of Lenoir-based Bernhardt Furniture, slips into a curtained section of the company’s exhibition space. In the showroom behind her, a group from the Dominican Republic — one in 10 buyers at the market is from another country — makes notes on Bernhardt’s Tuscan Villa line. She walks through rooms where drywall dust covers bare floors as new walls and mantelpieces take shape. “This will all be for our Martha Stewart collection this fall,” she says.
On the market’s second night, hundreds gather under a tent in the plaza in front of the International Home Furnishings Center to hear a Charlotte funk-rock band. Inside, under bright lights in closed-off showrooms, photographers from studios that specialize in furniture — 11 of them have at least 100,000 square feet each somewhere in High Point — snap late into the night. One is The Alderman Co., founded in 1896 as a portrait photographer. It employs about 100 in its 250,000-square-foot studio. “The market has evolved, and we’ve evolved with it,” President Jeff Williams says. “One of our top-10 clients is headquartered in Vietnam.”
For all its economic impact, the market has a relatively low profile in the rest of the state, even though it spills out of High Point, which has only about 1,000 hotel and motel rooms. There are some 15,000 in the vicinity, and buyers take those and others as far away as Durham and Charlotte. Closed to the public, the market is open only to manufacturers, distributors, wholesale buyers and industry insiders. “Sure,” says analyst Jerry Epperson, managing director of Richmond, Va., investment-banking firm Mann, Armistead and Epperson, “some always want to go the girlie bars or whatever in a place like Las Vegas, but this is the professional market.”
While the market is popular with manufacturers, it is less so with buyers. “We’ve been addressing problems such as perceived price gouging by hotels and the lack of entertainment,” says Toms, the Market Authority chairman. Epperson adds: “In past years I was paying $360 a night to stay in the Raddison downtown here. In between markets, I’ve stayed there for $90 a night. In Vegas, if anything, they have group rates for the market and you pay less.”
Many High Point officials deny they’re concerned about losing the market. But they have made a massive effort to burnish the city’s image and fix flaws. Jawboning this year persuaded some hotels to lower rates — Epperson’s bill at the Radisson dropped to less than $300 a night — and the Market Authority rolled out free entertainment that included three-time Grammy winner Bruce Hornsby. But the biggest improvement was in transportation, moving buyers through the congested streets to showrooms scattered throughout downtown.
From predawn to twilight, fleets of buses and vans shuttle buyers from the state’s three major and some smaller airports and ferry those who have driven to the market from park-and-ride lots in suburban shopping centers. The renewed emphasis began in 2002, not coincidentally the year that plans for the Vegas market were announced. The Market Authority will spend about $1 million this year on transportation. Overall, it has a $3.2 million annual budget, which comes from the state, High Point, other Triad cities and a showroom-license tax on manufacturers.
Boosters also are promoting the market as the lower-cost alternative. Tom Lindh, president and CEO of the International Home Furnishings Center, says exhibitors pay an average $12 to $13 a square foot in High Point, compared with up to $40 in Las Vegas. Officials there won’t comment. Ultimately, Lindh and others concede, the hand they hold won’t decide where the market will wind up: That’s up to the buyers. “The strengths of High Point are the weaknesses of Las Vegas,” he says, “and the other way around.”
In the Radio Building mezzanine, those who will decide browse Presidential Seating’s showroom. The past keeps its hand on the present here. The bank is long gone, but a radio station from which the building takes its name has had its studio on the top floor since the 1940s. In a sixth-floor office that would be at home in the business world of the 1920s, Candace Lambeth, president of the family company that has owned the building since 1947, waits and watches. “There is something about the furniture industry that is special,” she says. “I don’t have a dog in this fight, but I know how much it means to the area. I think it’ll stay. I hope it will.”
When it comes to furniture, she says, High Point has the history. Time will tell whether Las Vegas has the future.