High Point, N.C., keeps wary eye on LV plans

Jennifer Shubinski

Saturday, Nov. 13, 2004 | 12:11 p.m.

WEEKEND EDITION

November 13 - 14, 2004

HIGH POINT, N.C. -- It's 7:30 a.m. and Judy Cagle has been at work for almost five hours. She won't leave her Sweet Shoppe Bakery for 10 more hours.

During the High Point International Home Furnishings Market, held twice a year in April and October, Cagle and her staff of about 15 will fill orders for 210 dozen cinnamon sticks, 75 dozen chocolate brownies, 70 dozen sticky buns, 70 pies and 40 cakes, not counting specially decorated items, cookies and muffins.

"This is our busiest 10-day period we see in a year," she said. "Our schedule gets pretty difficult, but we know there is an end to the tunnel."

Besides the long hours, the effect of the nation's largest furniture show on this town of about 94,000 people is immense.

Not only does the number of people in town almost double during the biannual furniture market, but the show also pumps more than $1 billion into the state's economy and creates more than 13,500 temporary and full-time jobs, according to a study conducted by the Bryan School of Business and Economics at the University of North Carolina, Greensboro.

"The market has been the economic engine of High Point for almost 100 years," said Tom Dayvault, president of the High Point Chamber of Commerce. "It impacts every business in the community in some shape or form."

As the market came to a close last month, what was weighing on the minds of many High Point citizens was whether Las Vegas' furniture market -- set to open in July -- will have a detrimental effect on the town and whether an industry they have served for 100 years will leave.

Many local leaders said Las Vegas' World Market Center will not have an effect on the community that is internationally known as the furniture capital of the world. Nevertheless, the evolution of the Las Vegas market has been closely followed in area newspapers and has been decried as a possible economic drain on the Triad, a 12-county area in the middle of North Carolina.

"Las Vegas could be the elephant in the room all over the market," said Ivan Saul Cutler, an industry analyst and former vice president of another furniture market in San Francisco. "The High Point market is a difficult market to work because of the way it has grown. It's a crazy quilt of buildings built over the years without clear cohesive management."

The High Point market started as an annual event in 1909. By 1913 it had grown to 30,000 square feet of showroom space in eight buildings with 100 exhibitors and 400 attendees.

The market now draws between 75,000 and 83,000 attendees for about a week each April and October. They comb more than 11.5 million square feet of showroom space, spread out in 188 buildings holding nearly 3,000 exhibitors.

Not the first

Las Vegas is not the first to challenge High Point for furniture-market supremacy.

Furniture markets have opened and closed, grown and waned over the past 100 years around the nation.

Atlanta, Dallas and Tupelo, Miss., all have maneuvered to host the nation's largest furniture market. But by all accounts, none worked at a national level, and all have since evolved into regional markets.

It is High Point, locals like to point out, that always ends up on top.

That is despite the fact that many buyers, exhibitors and manufacturers say they find High Point a difficult market to work at and attend.

The city is a beautiful, friendly town with sprawling Southern mansions, large trees, rocking chairs on front porches, family-owned restaurants and a viable Main Street.

But over the years the town's infrastructure, while it has grown, has not expanded enough to accommodate the twice-a-year influx of people. During the trade show many market attendees endure hourlong or more waits late into the night at the town's handful of restaurants.

Parking can be trying, with local entrepreneurs charging up to $20 to park in fields a mile away from the heart of the market.

A lack of enough hotel rooms within High Point entices many residents to rent out rooms -- or entire houses -- to market buyers and exhibitors. The average four-bedroom house can command from $200 to $800 a night during the market.

Many families who rent out their houses take up residence at Oak Hollow Family Campground, staying in RVs, trailers and tents.

No space

During the fall market not a spare RV or tent space was noticeable. At the end of the day, families came "home" to their lots to cook dinner and prepare for the evening as children fished in the nearby lake.

The evening of the second day the market officially started, one such family, the Brunos, sat outside its pop-up trailer at the campground and finished dinner before the family's three girls, Sarah, Ashley and Michelle, ages 4, 10 and 13, began playing.

The family has been renting out its house for about three years, Carolyn Bruno said.

"For us it's just perfect; all we do is make memories out here."

While the ritual may seem odd to those outside High Point, it is a way of life for the town.

"When you are born in High Point, you are born knowing that you are going to rent your house. Even the very wealthy rent out their houses," said Ouida Kent, owner of the Toad Alley Bed & Bagel and The Last Resort, a service that places market attendees in about 200 local homes.

It is that quaintness and sense of family that local authorities said draw many people back to High Point.

"It's part of the culture -- people staying in homes," Dayvault said. "People at the market know the cooks, waitresses, waiters. They know where to eat, and this becomes their home for twice a year. That makes it unique."

Not all agree

But not everyone agrees that is the best way to conduct business.

"It used to be cute to stay in people's homes," Cutler said. "This is a different business world today. It's a hard place to get to. It's not a metro market."

The High Point International Home Furnishings Market Authority, created 2 1/2 years ago, has worked to alleviate many of the problems and concerns.

Those involved with the market said it has worked to create a transportation system that links High Point to nearby Greensboro and Winston-Salem, where many of the market's attendees stay. The bus system allows people to be picked up at the airport, taken to and from the market and their hotel and around the market's 188 buildings.

"We knew we had to do something for services that we provide here," said Bruce Miller, International Home Furnishings Center chief executive and vice chairman. International Home owns two of the largest buildings, totaling 3.5 million square feet, at the market, including one that takes up an entire city block.

Miller said the transportation not only gets people out of rental cars, but also offers them a larger choice of hotels and eating options.

"We used to hear about the lack of hotels, then with the transportation system they can stay at any hotel anywhere, and we never hear a peep anymore about hotels," he said. "Our job is to get people here, make the market a good experience and get people home safely."

But some buyers at last month's said the improvements still aren't enough. And many are quick to make comparisons with Las Vegas.

Some said they are looking forward to Las Vegas' many hotel accommodations and numerous restaurants, many that have extended hours or are open 24 hours.

No choice

"The only reason we come here (High Point) is because we don't have a choice," said Wayne Johnson, owner of Johnson's Furniture in Gaylord, Mich.

On the other hand, buyer Nancy Hemenway, owner of The Cottage in Rhode Island, said she has been attending the High Point market for 30 years and has no plans to attend the Las Vegas furniture market.

"I like Las Vegas as a place to go and gamble, but I like it here," she said of High Point.

Hemenway hit on a key point many of High Point's leaders are attempting to drive home to exhibitors and buyers: Las Vegas is only a place of have fun; it's no place to do business.

"A lot of it comes down to the type of community you can conduct business in," said Strib Boynton, High Point's city manager. "(High Point) is about business, not an entertainment venue, and it has been treated as a business venue for over 95 years."

Miller said Las Vegas' coined theme of "What happens here, stays here" is a "horrible way to get people to go to Vegas." He said it implies that what goes on in Las Vegas, people -- and businesses -- should be ashamed of.

Even if attendance shrinks at future markets, city officials said they have tried to prepare the town over the years through diversification of its industries. Instead of relying solely on furniture manufacturers -- many of which are headquartered in High Point and the surrounding area -- the town has cast a wide net to attract a variety of companies.

"High Point, North Carolina, is an international city. We have 60 international companies headquartered or that have their North American headquarters here," Boynton said.

Companies with a local presence include Tyco Electronics, Polo Ralph Lauren Corp.'s distribution and customer service center, bus manufacturer Thomas Built Buses Inc., pharmaceutical manufacturer Banner Pharmacaps and a Nabisco distribution center.

"The community has made a conscious decision to diversify and remain competitive," he said.

But whether the High Point furniture market can remain competitive in a changing industry remains to be seen.

While Las Vegas' World Market Center is owned by one group of developers, numerous groups have a stake in the High Point furniture market. That results in a lack of cohesiveness throughout the High Point market, with no rhyme or reason as to where exhibitors are placed, attendees said.

Confusion

The fragmented ownership also creates confusion over the date of the show, with many showrooms opening days before the actual market begins.

While the trade show actually is scheduled for seven days, many locals refer to the market as 10 days or more because of what many refer to as "premarket" and because some showrooms open before the scheduled opening date.

"While it is a market, it's a real estate game with major competing buildings," Cutler said.

Many of the large furniture companies not only have showrooms in High Point, but also are invested in the community.

Many are headquartered or have manufacturing plants nearby. Others have invested millions of dollars in real estate in High Point, for a standalone building to feature their product, in distribution space and even in housing for employees who travel to the town twice a year.

Of the 11.5 million square feet of showroom space, 2.3 million are owned by exhibitors such as Thomasville and Natuzzi, which manufactures high-end leather furniture.

High Point does have one thing Las Vegas doesn't have: cheap, available land.

"To display furniture properly, you need a lot of square footage," said Tim McGee, vice president of leasing for Showplace, one of High Point's newest exhibit buildings. "Real estate is a factor in how much you can display."

Regional market

He said that is one reason why High Point continues to exist and be successful and why Tupelo has built a strong regional market.

"The cost of real estate and to develop exhibit space is relatively cheap," McGee said.

Miller said what exhibitors will pay for in rent for a showroom in High Point compared with Las Vegas is in some cases three times less expensive.

"Even if they don't own their own buildings, they have huge capital investments. A 150,000-square-foot showroom is a huge investment, and my rents here are extremely low, and they can never duplicate that in Las Vegas," he said.

Large manufacturers, such as Lane Home Furnishings and Broyhill Furniture Industries, have signed leases in Las Vegas for the upcoming furniture show, but their exhibit space in High Point dwarfs what they will have in Las Vegas.

"The Las Vegas market is not meant to replace High Point," said Randy Spak, Lane president and chief executive. "It is a regional market for the West Coast."

Many smaller manufacturers and exhibitors are keeping their space in High Point while opening a showroom in Las Vegas.

Leala LaMarche, creative director for LaMarche, which sells carved frames, mirrors and accent furniture, said the family-owned company has showrooms at most regional furniture shows.

'Room for both'

"I think there is room for both," she said of the Las Vegas and High Point shows.

But not all large, well-known manufacturers are vying to lease space at the World Market Center.

Fred Starr, president of Natuzzi Americas, said it doesn't make sense to open a showroom in Las Vegas. Natuzzi Americas is headquartered in High Point.

He said he's not sure Las Vegas will draw a substantial number of new buyers who aren't already coming to High Point.

Starr said the company's customer base is accustomed to attending the High Point market and that two markets a year -- in High Point -- are sufficient.

Natuzzi is housed in a 60,000-square-foot building resembling a ship. Inside are four stories of offices and showrooms, showcasing Natuzzi's new products.

"We have a huge investment here," Starr said of the eight-year-old building. "We're trying to find where this new market fits in relation to our needs."

He said the building is representative of the company, and many residents consider it a landmark of downtown High Point.

"It's a large vessel that goes into the future," Starr said.

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