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Despite fourth quarter uncertainty, a few minor strategy tweaks and adjustments may be all that’s needed among independent home décor retailers for them to continue to thrive.
The volume of retail orders among major retailers, however, has fallen significantly, down 40% year over year, according to a Freight Wave review of the most recent Morgan Stanley Shipper Survey, which polls roughly 100 companies about their transportation expectations.
According to the Morgan Stanley report, Williams-Sonoma as well as Gap and Best Buy are among those with the highest inventory risks, while Ross, Burlington Stores and TJX Cos. are poised to benefit from the current environment. Overall, home furnishings was said to be at “an elevated risk.”
Cheryl Kees Clendenon, owner of In Detail Interiors in Pensacola, Fla., has measured expectations about the next few months.
“I think it will be flat from last year. I do not expect gains in fourth quarter at all,” Clendenon said. “We are tracking ahead of 2021 overall, though the economy is in a bipolar sort of state right now, it seems. Inflation is real and while gas has come down in price, we have not seen any reductions in fuel surcharges — yet. This creates a pricing dynamic that we have to pass on to our customers. But I am super optimistic overall that when the economy levels out, those who continue to market — in some way — every day, will be on top.
“I am taking the approach of giving my team more time off at the holidays and doing more event-based marketing beginning mid-November and then taking off the week around Christmas. I feel strongly this is important to the overall morale of people in general. We have been through a lot in the past couple of years collectively, and I’m not sure people realize what a toll it can take. I value my team and want them to see and feel this commitment, and while not everyone has the luxury of not having those few days right before the holidays to take off, we can do it and the payoff will be more enjoyment and ‘presence’ with our loved ones.”
David Mallory and Todd Fields of Mallory Felds in Johnson City, Tenn., expect the fourth quarter to be similar, “if not greater,” than last year.
“One of the advantages of being a high-end retailer is that historically, our clientele doesn’t allow fluctuations in the economy to alter their spending habits,” the owners told Home Accents Today. “Knowing this allows us to not have a knee-jerk reaction to economic downturns.
“However, the steady decline in the stock market will affect our clientele more than occurrences like inflation or interest rates. The significant losses in stock value could stall some of our client’s desires for larger purchases.
“To offset this, we are already planning on amping up our selection of more moderately priced items and putting even more focus on our design services. We’re confident that offering a larger selection of ‘entry level’ product will encourage new customers to spend in-store.”
At Mister Robert in Norman, Okla., business has not been altered by economic uncertainty. In fact, it’s just the opposite, according to vice president John Carl. “As we approach the fourth quarter, I am optimistic that people will continue to invest in themselves,” he said. “The forces driving the fear of recession do not seem to be affecting our business so far. The war in Europe and OPEC decreasing oil production would seem to continue to drive up inflation and increase the chances of a recession. However, unemployment remains low and new jobs are being created, both of which are good signs for the future.
“In Oklahoma, high oil prices are usually good for the economy. With all the uncertainty of these times, I believe people will continue to invest in their homes.”
Sarah Poulios, vice president of merchandising, buying for Los Angeles-based Lulu and Georgia, was equally optimistic.
“We have high expectations for Q4 based on a robust product strategy and a November launch of a very exciting new collaboration,” she said. “The combination of innovative and trend right designs, recent site enhancements and a strong in-stock position will help drive our success.” —Anne Flynn Wear and Jennifer Marks contributed to this story
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