Twice a year, the city of High Point, North Carolina, doubles in size. Eighty-thousand retail buyers descend upon the town to peruse the wares in 180 buildings ... The theater with the '60s marquee? Five floors of furniture showrooms. The post office? Showrooms. The court buildings? Showrooms. In the self-proclaimed furniture capital of the world there are even hints of an aesthetic that is, well, rather like Las Vegas ...
Dave Palmer, general manager of the Las Vegas World Market Center, has a background as a retail buyer, so as he gives a tour of the new Las Vegas World Market Center building he sounds like a buyer. The building's curving exterior forms are well known to drivers passing by Downtown on Interstate 15. Inside, a pair of escalators, encased in copper, bend toward the second floor. But there the frills end. This is no showcase for fashionable Las Vegas. Rather it's the place where furniture stores will come to buy their products, in 240 showrooms.
Palmer speaks enthusiastically about the center's "racetrack" layout of halls, and the 12-foot-wide hallways, which widen to 20 feet at the corners. He talks about the abundant stairwells. "Buyers use stairwells."
Ten stories tall and 1.3 million square feet—the size of many skyscrapers—the center will showcase 1,250 exhibitors during the inaugural Las Vegas Market, to be held over four days starting next week. The market will also be leasing space at the convention center. More than 40,000 people are expected to attend.
Starting next year Las Vegas will host the furniture market every January and July, and officials are planning an ambitious expansion—a new building roughly every 18 months until there are eight buildings in all, totaling 12 million square feet of home furnishing exhibit space. The second building, which will be connected to the first by a series of walkways, is already 80 percent leased and is scheduled to open in January 2007. Plans for the project also include a 4,500-car garage and a series of large tents on the north end of the market land site, which will house temporary exhibit space.
Exhibitors have signed five-year leases, but most of this unusual-looking building will remain quiet and empty for much of the year, until the markets bring it to life. And just like that, Las Vegas is aggressively trying to raise the stakes in the wholesale furniture exhibition business and dominate the market. The only problem is, the center of that industry, tiny High Point, North Carolina, has no intention of giving up the throne.
The Start of Something Big
The Las Vegas World Market Center was the dream of Los Angeles developers Jack Kashani and Shawn Samson, the latter of whom at one point oversaw the gargantuan Mall of America in Minnesota. Palmer says the pair was interested in bringing a large retail furniture store or mall to Las Vegas. But manufacturers suggested to them that a retail project wasn't where the action was—after all, people didn't come to Las Vegas to buy furniture. Wholesale furniture, though, was a different matter; there was a need in the industry for a regional market in the Western U.S. to supplant an undersized facility in San Francisco that had no room to grow.
Palmer ran the San Francisco market for five years in the late '80s. When Kashani and Samson tapped him to run the Vegas market, he thought it was a great idea. The original plan called for one eight-story building, less than 1 million square feet. "We all thought it would be regional," Palmer says.
But four months into leasing the building, Palmer realized he didn't have enough space. He asked his bosses for three more floors. Kashani and Samson gave him two and pushed out the dimensions of the building to its current size. It still wasn't quite enough ("We wish we had the extra floor now," says Palmer); however, this initial expansion meant the Vegas project would overtake the San Francisco market from the beginning. The first building was fully leased before construction began two years ago.
When the Related Companies, a New York developer, came onboard to oversee development of the market's 57 acres, plans to surround the building with offices and hotels were changed and the idea of a campus of buildings dedicated to furnishings took hold. The first two floors of the first building will be dedicated to a design center for the hospitality industry, a mix of space that will be repeated in the next two buildings. "We're making it up after that," Palmer says.
Across the United States there are specialty furnishing markets in cities like Chicago, New York and Atlanta. There are niche furniture markets like one in Tupelo, Mississippi, which sells lower-priced "promotional" furniture. There are regional furniture markets like those in Dallas and San Francisco. And there is High Point, the only real legitimate national (and to some degree international) general furniture market.
Until Las Vegas.
"High Point is very much like what we do, and there's a whole lot more of it there," Palmer says. High Point already has 12 million square feet. Of course, the Vegas market hasn't "done" anything yet, and when asked whether Sin City will wrest the business from High Point, Palmer turns demure. "The industry will have to make that decision."
Some believe that High Point, a city of 90,000 whose economy is built on furniture, will shrug off the challenge represented by Las Vegas, and others suspect the self-proclaimed world capital of furniture will yield the title to a city that knows a lot more about self-promotion. "I think neither of the two [possibilities] will materialize," says Stefan Wille, president of Aktrin Furniture Information Center, a consulting business in High Point. But, he says, "If I were a show operator I would be concerned."
Furniture is in High Point's blood. In downtown there is a 20-foot-tall dresser, with socks hanging out the drawers. The call letters of one radio station, WMFR, a town fixture for more than 50 years, stand for "We Make Furniture Right."
When the city was founded in 1859, quality hardwood was plentiful in the region, including oak, walnut and pine. Entrepreneurs like William Henry Snow made wooden spools for the area's textile mills. This grew into a lumber operation, and then Snow and others realized more money could be made making furniture. The town's first furniture factories were established in 1889. Ten years later there were 44 factories. Twenty years later the first Southern Furniture Market was held. A 250,000-square-foot exhibition building opened in 1921. Eventually some would call the town Furnitureland, U.S.A
High Point is no stranger to poaching industries—its cheap furniture gave it an edge over the furniture industry in Grand Rapids, Michigan, which for many years was regarded as the country's best furniture-maker. (The Grand Rapids Market opened in 1878 and closed in 1960.) High Point's market had the benefit of an industry that was close by—up until 15 years ago, nearly 45 percent of the world's furniture was made in High Point or within 100 miles.
High Point is also no stranger to other towns trying to poach its business. Dallas tried to wrest the industry away in the '70s. "You better believe we were worried about Dallas," says Jim Armstrong, a retired vice president with the High Point Chamber of Commerce.
City officials invited the deputy mayor from Dayton, Ohio, who had worked in the furniture business, to strategize ways to improve the city. Housing and transportation options were expanded. And whereas High Point used to share market duties with nearby communities like Hickory, after Dallas came along, all the showrooms were centered in High Point. "At that point the decision was made to put all our eggs in one basket," says Kim Ellis, director of the High Point Public Library.
Still, High Point's own sense of itself as something more than a Southern regional market is a relatively recent phenomenon. It wasn't until 1989, for instance, that the town renamed its market the International Home Furnishings Market. And at least half of High Point's 12 million square feet of exhibit space was built after 1990. In 2001 the nonprofit Market Authority was created to better coordinate High Point's sprawling activities.
A $1 Billion Giant
Twice a year, in April and October, the city of High Point doubles in size. Eighty thousand retail buyers descend upon the town to peruse the wares in 180 buildings. The town takes on the hustle-bustle atmosphere of a big city, says Judy Mendenhall, president of the High Point Market Authority.
Where is the furniture market? Everywhere. All of downtown High Point, says Palmer, looks "as if Rod Serling were alive and had turned every building into a furniture showroom. The theater with the '60s marquee? The marquee is still there, and it's five floors of furniture showrooms. And it's called The Theater. The post office that you've seen in other towns? It's on a city block, it's got the big wide steps that go up, and columns—it's showrooms. The courts building looks like a courts building, and it's showrooms."
Downtown is 90 percent showrooms, Palmer estimates, and in all of that, there are hints of an aesthetic that is, well, rather like Las Vegas. One showroom building looks like an Egyptian temple. Another resembles the bow of the Titanic rising out of the street.
There's also a complex of exhibition halls a few miles from downtown. Since there aren't nearly enough hotel rooms in High Point or surrounding communities to meet demand, High Point residents open their homes to visitors, sometimes renting rooms or entire houses out, inviting friends from previous markets back again the next year. "Market visitors are treated like family," says Ellis. "Everybody goes out of their way. Nothing happens in High Point except the furniture market."
Got another community event you want to stage? Don't hold it during the market. In fact, don't hold it the week before or after, either. In High Point, charities raise funds by selling parking places during market—the scene is basically a giant fair.
The irony of the market at High Point is that, while it pumps $1 billion into the economy of North Carolina and is the only thing that has kept High Point on the map, the residents of the city aren't invited. "Over the years there have been attempts to open the market for public use, or fundraisers," says Armstrong. "Certain showrooms have opened on a very limited basis." Armstrong says market officials have, over the years, crafted a fair amount of "propaganda" for residents to understand why they're not welcome at their town's biggest party. "People have generally accepted that." It remains to be seen how Las Vegans respond to the same scenario here, because the market here will also be closed to the general furniture shopper.
"We tried to have a furnishing festival for a few years," says Ellis, "but it never caught on in a big way. High Point pours its energy into hosting the furniture market."
High Point sits in the middle of the state, part of a trio of cities, known locally as the Triad, that includes tobacco capital Winston-Salem, and Greensboro. Combined, the Triad is home to more than 1 million people—but High Point's 90,000 citizens make it the smallest of the lot. Still, talk to the residents, and their views of the city are not so much different from the views of your average Las Vegan: They look around and see growth.
"When I go out to a public place I don't see anyone I know," says Ellis. "It's a much larger city than my sense of it is."
And it's facing the same changes as many cities across the country. "If you went back 10 or 15 years ago, primary markets were all regional markets," says Bill Fenn, a furniture industry veteran and longtime High Point resident. Most manufacturers, he says, sold their products in the region in which they were produced. Then came globalization. "All of a sudden, retailers realized they could sell products outside their area." The world's two largest markets, in High Point and Cologne, Germany, being the largest, were in the best position to grab the emerging foreign exhibitors.
At the same time, manufacturers are leaving the area. Thomasville just closed a plant, says Armstrong, and some 600 people, from factory workers to middle managers, will be out of work. In 1971 the town had 23 hosiery mills. Today four remain. More than a third of furniture sold in the U.S. is now foreign-produced, mostly in China and other countries in Asia. Ten years ago that figure was no higher than 20 percent. "In all likelihood the foreign component is going to grow in the future," says Wille. But a longtime High Point advantage, the proximity of manufacturers to the market, is eroding.
Armstrong doesn't expect High Point to go down the tubes. It has diversified to land new distribution centers from FedEx and Dell. Others talk encouragingly about new bio-tech startups. Still, he says, "I have a great concern about North Carolina's economy in general. We can't all get in the service industry and communications industry."
Let the Games Begin
"There's a lot of interest in what's going on in Las Vegas," says Ellis. "People here are really excited about what it's going to mean. I think half of High Point is planning to go to see what it's all about."
Reactions vary between concern over the possibility that the Las Vegas Market will emerge in the next several years as a serious competitor and a nonchalant confidence that some observers have described as High Point's stiff upper lip. "It's awfully hard to judge because they haven't had a market," says Mendenhall.
What High Point has working in its favor, of course, is a critical mass of space, history and infrastructure that Las Vegas will likely never match. There are still plenty of manufacturers in the area who don't have to incur enormous expenses to transport their goods to a distant showroom (a problem that plagued Dallas). Trade media that cover the furniture industry are there, or have correspondents there. Industry analysts are there. Ditto furniture consultants. You can even find specialty accounting firms. Do any research on the furniture industry and you'll find a disproportionate number of High Point addresses. "That's something Las Vegas has to build up," Wille says.
What Vegas counters with is the potentially superior setup of its operations—a compact campus of buildings within a city with 100,000 hotel rooms. At High Point, says Palmer, the Vegas market GM, "You're spending a third of your time just getting around." As the furniture business becomes more global, Las Vegas stands to make an impact since it's already a well-known destination for international travelers. And, unspoken in all of this, of course, is the sense that Las Vegas is a place where people want to come visit, do some work, have some fun. High Point is ... where is High Point again?
Mendenhall, though, is trying to turn Vegas's fun-town rep on its ear. High Point, she says, is a "hardworking trade show. People who come here are very serious about the home-furnishing industry. This is not a place where people come to play. This is a place where people come to work."
Still, the High Point market is taking no chances—it's expected to consolidate all its transportation services in one large new facility that will open in time for the October market. And Mendenhall says High Point will continue to expand, even as Las Vegas constructs more and more furniture buildings. "I can't see that High Point would sit still in that same time period."
Meanwhile, Las Vegas' proposed ramp-up to 12 million square feet has some skeptics. "Whether that is a little too ambitious, I tend to believe so," says Wille. "High Point is still very well sold out during the market. To double the capacity, I have my doubts. There are only so many manufacturers and importers who want to show." Wille adds that major manufacturers only need to show their products at the markets every now and again—it's an expensive proposition for them to do so.
"If ours does grow to even eight or 10 million square feet, and if it stays focused in home furnishings, there probably isn't room for both," Palmer says. "But we think we'll be quite a bit different than that because we'll go into other segments of furnishing." He mentions floor coverings as an area that doesn't have a big presence in High Point.
And he's bullish on what the World Market Center means for Las Vegas. "It's bringing an industry to Las Vegas, and this will be somewhat of a home for that industry. It probably won't be the last of its kind in Las Vegas. This is something that other industries might look to." While no one expects Las Vegas to become a furniture manufacturing center, Palmer thinks companies that, for instance, spend millions for a booth at CES, might decide they want a permanent showroom in the city. "They could own that much square footage on a lease and build it out for probably the same money or less. And own it all year long."
"I don't think sheer final floor space is the final answer," says Fenn. "Tell me the quality of manufacturers there, and the most important factor is the buyers."
High Point will be ready for the challenge. "(Las Vegas) could very easily be a potential competitor in years to come," Armstrong says. "We're gonna knock heads as hard as we can to keep this market here."