February 2008 What’S Next for the Furniture Industry
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THE NORTHEAST MISSISSIPPI A MONTHLY PUBLICATION OF JOURNAL PUBLISHING AND THE COMMUNITY DEVELOPMENT FOUNDATION FEBRUARY 2008 WHAT’S NEXT FOR THE FURNITURE INDUSTRY inside Economic euphoria in NeMiss tempered by reality Fulton furniture maker finding its way into homes Prsrt Std US Postage PAID Tupelo,MS CDF membership Permit #353 campaign slated for March PAGE 2 BUSINESS JOURNAL FRIDAY,FEBRUARY 1, 2008 2008 could be ‘chaotic’ for furniture industry By Dennis Seid Some companies continue to do BUSINESS JOURNAL well. Recession-proof? Hardly. But By many accounts, last year was their businesses are holding up in a rough one for the furniture in- the face of difficult conditions. dustry. With the housing, credit Take Pontotoc-based Southern and energy woes slowing con- Motion. Co-founder Guy Lipscomb sumer spending, some say 2007 re- is one furniture exec who said 2007 minded them a lot of the recession was reminiscent of the 1981-82 re- 25 years ago. cession. And with the economy still on “That was a long time ago,” he shaky ground, 2008 could be just said. “I’m not sure 2008 is going to as interesting. Many economists be much different.” are predicting a recession, even as But Southern Motion did have a Washington works to give a tempo- good year. Running on a July 1 to rary stimulus package to con- June 30 fiscal calendar, the compa- sumers and the Fed lowers interest ny showed stronger business dur- rates. ing the period. And through Janu- How consumers react remains to ary of this year, business is still be seen. holding up. But the future is up in Describing the outlook for the the air. furniture industry, Franklin Corp. “I wish I could see what will hap- founder and chairman Hassell pen a few months down the road,” Franklin said, “Chaotic. It’s going to Lipscomb said. “But I can’t – no- be chaotic this year.” body can.” A look back reveals some dozen Jim Sneed, CEO of Affordable companies either closing, downsiz- Furniture in Algoma, has a similar ing or filing for bankruptcy last story. Business for the 3-year-old year, putting nearly 1,700 out of company remains strong. Unlike work. And even with some compa- some furniture companies whose nies expanding and adding work- fortunes are tied to the housing in- ers, there was still a net loss of dustry – more homes mean more nearly 1,000 jobs in NeMiss alone. But not everyone is suffering. Turn to FURNITURE on Page 6 THOMAS WELLS Commercial R eal Estate Specialists Since1952 FEATURED PROPERTIES Oxford Medical Commons Office Clay Short Mixed-Use Building VP Commercial Sales &Leasing Development For Sale [email protected] 580 acr e Mixed-Usedevelopment featuring up to 300,000 sqft of traditional r etail including acentral Lifestyle Center/ 2394 sq. ft. on .57 acr e. Entertainment component. Oxfor d,MSwithfr ontage on State Zoning will allow for non-medicaloffice uses. Hwy 7,State Hwy 30,and Sisk A ve. Barry Replogle Commercial Sales Associate [email protected] Medical / A vailable o o k i f f G i n B C l l v d P rofessional For Sale or Office Park Lease r e st lo G h ut o S Cliff Gookin Boulevar d 3,500 Squar e Feet - Shop W ith Offices, 5 Over head (662)842-8283 phone Lots A vailable Now! Various Sizes. Siteplan available Doors/Bays. McCullough Blvd.,Tupelo (662)842-4117 fax upon r equest. www.trirealestate.net FRIDAY,FEBRUARY 1, 2008 BUSINESS JOURNAL PAGE 3 Economic euphoria in NeMiss tempered by reality On the n case you’ve been under a Who can ignore the fact that In 2007, a year that was diffi- rock for the past year, we in cult for many, we saw at least a Northeast Mississippi are 2,000 jobs will be added (at dozen companies either close, COVER getting Toyota. Obviously, downsize, file for bankruptcy That big question mark says it all. I and/or shift production else- it’s good for us, and good for the least) at the Japanese automak- The furniture industry finds itself rest of the state, too. The more where. battered coming into the new year, jobs we can create, the better. er’s $1.3 billion site being built According to statistics provid- Who can ignore the fact that ed by the Mississippi Furniture with more closings and layoffs in 2,000 jobs will be added (at near Blue Springs? And don’t Association, some 1,700 jobs 2007.And for the $4 billion indus- least) at the Japanese automak- forget the thousands of supplier- were lost. Add in a few expan- try in Mississippi, the economic er’s $1.3 billion site being built sions from some companies, signals are mixed, with some insid- near Blue Springs? And don’t Dennis the net loss of jobs is still well related jobs that also come more than 1,000. ers saying 2008 could be worse. forget the thousands of suppli- SEID But no one is ready to give up just er-related jobs that also come along with it. Feeling pressures? You bet. along with it. It’s why the MFA is looking for yet, as you read the stories in this Dozens of suppliers, from the some legislative help. That story is month’s issue. tier 1 companies to the tier 3 supplier announcement of its Unfortunately, few outside in this issue of the Business Jour- companies are poised to set up own. NeMiss understand or appreci- nal, as is a story about the outlook shop across NeMiss – and be- Toyota seems to be the gift ate what’s going on with the $4 for the industry in general. yond. that keeps on giving. billion industry here in our Are we doomsayers and Coming It’s been nearly a year since But before we begin patting backyard. wringing our hands in defeat? Toyota made the grand an- ourselves on the back, we can’t It is the bread-and-butter Not at all. nouncement and we’re still ex- ignore the fact that NeMiss still economy for many communi- But we are realistic. Toyota is NEXT cited about. Probably because it has an unemployment rate ties in our region, without a boon, without a doubt. But hasn’t quite sunk in yet. that’s higher than the state and which those communities even Toyota isn’t an answer for We see the progress every day national averages. We still have would not do well. And when the furniture industry, or the MONTH being made at the former Well- businesses and industry getting the industry suffers, so do those rest of the economy. spring Project megasite. We also pressure from competitors and communities. The furniture industry needs The Northeast Mississippi Business see work in Itawamba County customers alike. No doubt you’ve read and our understanding and our Journal takes a look at the travel and near Baldwyn at the two No – it’s not all rosy. heard about the housing crisis, support, any way it can get it. and tourism industry in the region. tier 1 suppliers who have al- And who better knows that the mortgage crisis, the experts And,if you have your calendar of ready announced their atten- than the furniture industry, the talking about a potential reces- Dennis Seid is editor of the Northeast Mississippi Business events ready,send them to us at epicenter of which is in this re- sion. None of that is good for tions. Next month, Union Journal.Contact him at [email protected] or (662) [email protected] County is expected to make a gion. the furniture industry. 678-1578. StoreYour Stuff in The Attic Climate-Controlled Self-Storage. N Safeguard your valuables against insects and pests. N Keep your antiques from harm of extreme temperatures. is pleased to announce that Perfect for businesses looking to store files in a safe place. Marjorie T. O’Donnell, Oxford Office Perfect for families needing extra space to keep and family heirlooms. Stephen W. Flynn, Tupelo Office have recently become members of the firm. Reserve your space today. CallThe Attic at 840-5300. Claude F. Clayton, Jr. S. Ray Hill, III David D. O’ Donnell* J. Kristopher White Marjorie T. O’Donnell Stephen W. Flynn William H. Davis, Jr. TUPELO OXFORD CORINTH 115 N. Broadway St. 1005 Jackson Avenue 511 Franklin Street Post Office Box 755 Post Office Drawer 676 Post Office Box 1613 Tupelo, MS 38802 Oxford, MS 38655 Corinth, MS 38835 Tel. (662) 620-7938 Tel. (662) 234-0900 Tel. (662) 396-4808 Fax (662) 620-7939 Fax (662) 234-3557 Fax (662) 396-4805 1098 Cliff Gookin Blvd. (near Gloster St.) inTupelo www.northmslaw.com selfstorage-theattic.com Also admitted in *Florida. Additional background information available upon request. PAGE 4 BUSINESS JOURNAL FRIDAY,FEBRUARY 1, 2008 Max Home finding way into plenty of homes Fulton-based furniture maker has grown to nearly 500 employees in five years By Dennis Seid “We’re the five partners who “We’re the bought the company in 1998, chairs, then some red chairs, BUSINESS JOURNAL look after sales, marketing, the friends and colleagues some green chairs, etc. The FULTON – Take a handful of production and accounting,” five partners scattered across the country. whole reality is different today experienced furniture execu- he said. “One of our secrets is who look Policicchio, who was mak- ... you have to be flexible, and tives, find them a building and everybody has a vested inter- ing exclusive high-end furni- we are.” a good pool of workers and est in the company’s success.