IMC chief blasts Pre-Market
A major player in the furniture industry on Tuesday gave a frank assessment of what he sees as challenges facing the High Point Market.
Bob Maricich, CEO of International Market Centers, told an audience of furniture industry insiders and others at the High Point Country Club that the world’s largest home furnishings trade show must do more to capture the next generation of furniture buyers.
But it was his thoughts on Pre-Market, which is held about a month before the twice-yearly furniture markets, that stood out.
About two dozen furniture exhibitors and manufacturers pay for invited furniture buyers to come to High Point showrooms for an advance look at products. Pre-Market is organized through the High Point Market Authority.
“Pre-Market is singularly the most stupid and destructive idea I’ve heard of,” Maricich said. “Can you imagine Fashion Week saying to Ralph Lauren and some of these other retailers, ‘Why don’t you guys come in before everyone else does and see what’s new before them?’ It doesn’t make sense. It’s good for some, but, I’m telling you, it’s not good for the High Point Market.”
He didn’t end his critique there.
He said it’s 50 percent more expensive to attend the market in High Point, where IMC owns the three largest showrooms, than it is the January and July markets at the IMC-owned World Market Center in Las Vegas.
Maricich said High Point’s market district is too broad and full of empty showroom space, which is a turn-off to coveted buyers who are the lifeblood of the trade show.
“We need a market district. We need to define where market is,” he said. “The oversupply of showrooms doesn’t add to the vibrancy. There’s 1.5 million square feet of empty showroom space that’s never again going to be filled.”
Maricich said the Millennial Generation of people in their 20s and 30s have different furniture-buying habits and will have to be sold on attending market.
“I think it’s a great opportunity, but we’re going to have to do things a lot differently,” he said. “The primary drivers of what buyers want is what’s new. The sellers, the manufacturers, are the ones that pay us rent, but the buyers are going to decide where market is and how long market is. So we’ve changed our paradigm to look at market through the eyes of buyers.”
Stepped-up marketing will be the key to reaching new buyers.
“These are new people. You’ve got to market to them and say, ‘If you’re missing High Point Market, you can’t run your business well.’ The market authority doesn’t have the talent level or the money to do it,” he said.
Maricich also talked about the financial structure of IMC, which raised over $1 billion to purchase the High Point showrooms in 2011. He said Bain Capital and Oaktree Capital Group are the source of 92 percent of the investment in IMC, he said.
“They are private equity companies. They get into an investment and they get out of an investment, so we have to find a way to monetize their interest,” Maricich said. “I would prefer that we take the company public. I think it’s a wonderful time to look at (an initial public offering).”
IMC invested over $23 million last year in its buildings, he added.
Maricich sounded positive about the state of the furniture industry in general, saying he believes it will grow to be a $120 billion to $140 billion industry.
Consumer spending and the housing market are rebounding, he said. Between 1.2 million and 1.6 million new homes per year will have to be built to meet demand, which bodes well for the industry.