Home Furnishings May Take The Place of Home Selling
Wednesday, March 19, 2008PAUL KANGAS: Weakness in the U.S. economy and the housing market could also cripple home remodeling. Fitch Ratings today estimated spending on home renovations and repairs will drop 6.5 percent this year. But that's not discouraging house wares manufacturers. Even if remodeling plans are on hold, the industry thinks consumers will still spend on home accessories. Diane Eastabrook reports from the international home and house wares show in Chicago.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Hand Presso could become the must-have item for coffee connoisseurs. The hand-held espresso maker was a big hit this week at the international home house wares show in Chicago. At a time when the global economy is spooking man and beast, manufacturers and retailers hope innovation and style will entice consumers to buy new gadgets for their homes.
UNIDENTIFIED FEMALE: This is Bissell's steam mop, 100 percent environmentally friendly in that it uses water instead of chemicals.
EASTABROOK: Bissell is tapping into the environmental consciousness of consumers with so-called green cleaning appliances. The little green portable carpet cleaner is made from recycled plastic. And the steam mop cleans floors with hot water, not chemicals. Bissell Chairman and CEO Mark Bissell says the company reintroduced the mop as a green product, after it failed to sell well as a conventional one.
MARK BISSELL, CHAIRMAN & CEO, BISSELL, INC.: We kind of took some cues from our research where we saw environmental concerns being a bigger story and so how could we position this product or reposition it yet that had many of the hallmarks or attributes of what an environmental consumer is looking for.
EASTABROOK: While exhibitors here are concerned about the sluggish U.S. housing market, recession and higher commodity prices are bigger concerns. Many of the companies at this show think the biggest economic challenge they face this year is the cost of energy. Many manufacturers say high energy prices are driving up their production costs and eating into consumer budgets. Lifetime Brands owns the Kitchenaid, Cuisinart and Pfaltzcraft brands. Chairman and CEO Jeffrey Siegel says higher energy and metals prices have forced his company to hike prices on everything from vegetable peelers to food processors. He says a price hike of a few cents doesn't usually discourage consumers from buying -- but a hike of several dollars can.
JEFFREY SIEGEL, CHAIRMAN & CEO, LIFETIME BRANDS, INC.: So, we've been very careful in trying to reengineer products, trying to lower the cost through different manufacturing methods, more automation -- a lot more automation than we have ever used before.
EASTABROOK: Some experts are optimistic about the house wares industry. Greg Sleter, senior managing editor of the trade magazine "Home World," says tough times often inspire creativity.
GREG SLETER, SR. MANAGING EDITOR, HOME WORLD: Product development sometimes in an economy like this gets better because they are more focused on value, more focused on features just to grab the consumer attention at retail.
EASTABROOK: The International House Wares Association sees house ware sales increasing 3 to 5 percent this year. It says that could provide a breath of fresh air in an otherwise stagnant economy. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Chicago.
