June 10. 1921 



Hardwood Record — ^Veneer & Panel Section 



35 



Grand Rapids May Stabilize Prices 



Exhibitors at July Furniture Market Expected to Offer Stocks at Figures Which 

 Will Reflect New Economic Status; Concourse of Buyers Is Expected 



By Staff Correspondent 



Ellis Gimbel, who will some day be the head of the House 

 of Gimbel, is a very keen and far sighted young business man. 

 He has absolutely proved that in the last five months. He came 

 to the January furniture market, making his first visit to the 

 Grand Rapids exposition. Immediately he gave out an interview 

 in which he said: 



"The furniture manufacturers have not yet reduced their prices 

 enough. They have made a cut of an average of 20 per cent. 

 That is not enough. We want to buy furniture but we cannot 

 until the manufacturers reduce their prices low enough to make 

 their product attractive alongside other merchandise. For instance, 

 when on one floor of our stores we offer silks at a 50 per cent 

 reduction and something else at 40 per cent, we can't tempt a 

 purchaser with furniture which is reduced but 20 per cent. I don't 

 want any manufacturer to sell me a piece of furniture lower than 

 at a price which will give him a reasonable profit, but I am sure 

 the furniture men have not yet cut as low as they could and 

 must if they are to sell their products." 



The interview which Mr. Gimbel gave out was somewhat lengthy 

 but this was the gist of it. Its publication almost made furni- 

 ture manufacturers in the market have hemorrhages. They in- 

 sisted they had reached the rock bottom level and that to cut 

 another penny in price would be to sell below cost. They left no 

 stone unturned all through the three weeks of the market to hold 

 the prices where they were. But Mr. Gimbel was right and the 

 manufacturers now confess it. 



Before the January market was over at least two large manu- 

 facturers made further cuts in prices and thereby brought down 

 upon themselves the wrath of all the rest. But as soon as the 

 market w^as over and the salesmen took the road, all the prices 

 tumbled and they tumbled in such a fashion as to bring something 

 near to demoralization to the furniture business. 



That period has now passed, however. The July market will 

 open June 27 and that date will find furniture on display with 

 cuts as high as 20 and 25 per cent below the so-called "rock 

 bottom" prices of January. Manufacturers admit now that they 

 had not cut their prices sufficiently in January. They admit now 

 that during the two years immediately following the ^var when for 

 the first time in the history of their industry they had enjoyed 

 some real seller's markets and some real profits that they had ac- 

 quired a taste for the sweets of life which they were loth to let 

 go of and consequently did not reduce their prices as low as they 

 might have and should in order to stimulate the business and at 

 the same time to stabilize it. 



Prices That Will Stabilize 



But the prices which will prevail in the midsummer market will 

 be so low and the values ofiFered will be so real that the market 

 will at least be stabilized whether it is brisk or not. The manu- 

 facturer is right now out after business. Many of them during 

 the period immediately following the war entered upon large ex- 

 pansions. Some built entirely new factories and most of them 

 installed a lot of new machinery and reorganized their production 

 departments to more economically turn out merchandise. Some 

 of them had not completed all their work before the slump in the 

 furniture business came a year ago and the result was that some 

 of them found themselves in deep water while most of them found 

 it highly desirable to keep the plants in operation and to dispose 

 of the product. 



The result of this has been that the furniture manufacturer has 

 decided to move his product on a much smaller margin of profit 



than he had been taking during the two years previous and this 

 determination when added to the economies in production brought 

 about by the expansions and new equipment has made it possible 

 for him to reduce his prices for the mid-summer market to a point 

 that when suggested by Mr. Gimbel in January all but caused 

 hysterics. 



One other feature that has served to stabilize the furniture 

 prices at the lower levels is the lumber situation. Most of the 

 manufacturers have now worked off the greater part of their large 

 stocks of high priced lumber and are now using that which was 

 bought after the lumber market went to pieces. Those that have 

 not worked off all their old stocks have at least charged it off, ac- 

 cepted their losses and are counting it in at the prevailing prices 

 rather than at the price actually paid for it. 



And again where six months ago an actual shortage of furni- 

 ture production prevailed, today there is an overplus if anything 

 and competition is keen. Two years ago, right at the time when 

 the tremendous demand for furniture resulted in a riot on the 

 market, many factories were still tied up with war contracts or 

 had not been reorganized following the making of war material. 

 Many more factories had heard the siren voice of the talking 

 machine concern and had quit the furniture business to engage in 

 thr making of talking machine cabinets. The war business has 

 all been done away with now and the talking machine business 

 has fallen so flat that there is no demand for cabinets now from 

 furniture factories. The result is that many of the old familiar 

 furniture companies which have been out of the market for the 

 last four or five seasons are back in it now and all have goods to 

 dispose of. The demand on the part of the householder has fallen 

 and the production has increased. The result is as always, the 

 supply exceeds the demand and the prices have been forced to 

 come dow^n. 



Shortage of June Spaces 

 The result of this great desire on the part of furniture manu- 

 facturers to sell their product is that ^vhen the Grand Rapids 

 market opens here June 27 there w^ill be on display the largest 

 number of lines ever shown here. Indeed a considerable number 

 of old established lines that during the mad rush of 18 months 

 ago sold up for a year or two ahead and gave up their spaces in 

 the exposition buildings are now unable to find spaces and con- 

 sequently are not able to show although particularly anxious to 

 do so. Some of these lines are among the highest class in the 

 business, but every building is sold up to capacity and some lines 

 have even taken space in stores, leasing the windows for the dis- 

 play of their furniture during the four weeks of the market. 



Every indication, too, is that the largest number of buyers who 

 ever came to the market \vill register during these four weeks. 

 What they are going to do after they get here is another question, 

 but they are coming at any rate. The indications are, too. that 

 there will be a considerable generosity in buying. Particularly is 

 this true among the Easterners. Business conditions in the East 

 seem to have improved more rapidly than elsewhere, and since 

 March 1 the furniture business in that section has been increas- 

 ingly good. Most of the dealers there have disposed of their big 

 and high priced stocks, having cut the prices to the bone, offered 

 real bargains and cleaned up. They are now in need of mer- 

 chandise, but have been content to lead a hand to mouth existence, 

 buying only enough to keep them going and waiting for the July 

 market when they have hoped to find conditions improved, prices 

 more stable and when, too, they will be able to get the new pat- 



