Furniture sellers aren't relaxing yet

Bernie Moray, CEO of Gorman's Home Furnishings and Interior Design, thought that when business slowed last fall it was a temporary lull.
"We woke up in January and realized this may last a while," he said Tuesday during an interview at the chain's Southfield store. "So we made some adjustments."

The furniture industry saw double-digit sales declines last fall as the subprime mortgage mess hit the financial industry. The continuing credit crunch and low consumer confidence haven't helped.

Gorman's laid off 8% to 10% of its workforce and has about 125 employees at its four stores and warehouse. It reduced hours for other employees.

"We are operating under the assumption that this thing will end eventually," Moray said. "This business today is the most complicated, most challenging and most interesting it has ever been."

As the housing industry slump continues, the home furnishings industry continues to lose business. An estimated 20% of furniture sales come from people moving into new homes, according to industry estimates.

As the recession took hold last year, home furnishings sales dropped 4.4% in 2008, according to Home Furnishings News, an industry trade publication.

Moray is hopeful that federal economic stimulus plans will spur new homebuilding again in the next year or so.

"We have lived through many recessions, but this has got to be the worst. The people coming in the door who are not buying ... because we haven't seen the item they want at a giveaway price."

While Moray would not say how much Gorman's sales have suffered in the recession, which began in December 2007, he noted that industry-wide sales at furniture stores are down by 20% to 40%.

The typical amount spent on luxury furnishings by affluent households was down 7.3% last year from 2007, according to Unity Marketing, a Stevens, Pa.-based marketing and consulting firm.

Moray said Gorman's plans to hold on until the recession passes. He said the company has good relationships with vendors and its bank.