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Housing slowdown continues

12 November 2018
By the Numbers

OTTAWA – Housing starts continued their “orderly slowdown” in October, falling on both an actual basis and according to Canada Mortgage & Housing Corporation’s (CMHC) trend measure even though they were up on a seasonally adjusted basis.

The trend, a six-month moving average of the monthly seasonally adjusted annual rate (SAAR) of housing starts, was 206,171 units in October, compared to 207,809 units in September.

“The national trend in housing starts declined for a fourth consecutive month in October, which leaves the trend at its lowest level since February 2017,” CMHC chief economist Bob Dugan said in a statement. “However, despite declining for several months, the trend remains slightly above its long-run average because it follows historically elevated levels of activity in 2017.”

Chart courtesy of the Canada Mortgage & Housing Corporation.CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates, which are largely driven by the multi-unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 205,925 units in October, up 8.5% from 189,730 units in September. The SAAR of urban starts increased by 8.6% in October to 191,964 units. Multiple urban starts increased 16.8% to 145,442 units while single-detached urban starts decreased 10.7% to 46,522 units.

CMHC classifies ‘urban’ as population centres of 10,000 or more.

Rural starts were estimated at a seasonally adjusted annual rate of 13,961 units.

On an actual basis, starts of urban single-family homes were set a preliminary 4,124 units in October, down 19% from 5,083 units in October 2017. Starts fell in every region from coast-to-coast, ranging from 11% in Ontario to 30% across the Prairies.

For the year-to-date, actual single starts totaled 45,476 units – a decline of 14% from the 53,008 units for last year’s comparable period. They fell in all regions except Atlantic Canada where they gained a modest 4%.

Multi-unit segment starts – whether for the rental or condominium market – were set at a preliminary 12,911 units in October, essentially unchanged from the 12,904 units started in October 2017. Starts were down in every region of the country, except Ontario where they jumped 87% in one of those significant monthly variations that show up occasionally. In October, apartment construction in Toronto drove the jump.

For the year-to-date, multi-unit starts were up 3% to 115,799 units, driven by a 12% gain in Ontario. Starts were also up, albeit by a more modest 2% in Quebec and 4% in Atlantic Canada. They fell in the Prairies and British Columbia.

Total starts for the month of October were down 5% to 17,035 units and off 2% for the year-to-date at 161,255 units. Starts were up 4% in Atlantic Canada and by 1% in each of Ontario and Quebec while falling in the Prairies and B.C.

In his research note, Rishi Sondhi of TD Economics, said housing starts were better than expected in October which will be good for the overall economy’s performance in the fourth quarter of the year while offsetting an anticipated decline in home sales.

“On a trend basis, homebuilding has embarked on what has so far been an orderly slowdown, with softer demand feeding through to starts,” he said, adding, “Looking ahead, modest demand growth should keep a lid on Canadian homebuilding during 2019 and 2020, implying less thrust from what was once a steady contributor to economic growth.

“Still, the likelihood of a steep downturn in homebuilding is remote, given that Canada’s population is on the rise, the economic backdrop is decent and that markets are generally not overbuilt,” he concluded.

Bowring, Bombay go bust

12 November 2018
Retail

TORONTO – Two of this country’ leading furniture, home furnishings and décor retailers, along with their parent company, have filed for bankruptcy protection for the second time in four years seemingly unable to adapt in a marketplace increasingly dominated by the pure e-commerce players like Wayfair and Amazon.

Fluid Brands Inc. – parent to both Bowring and Bombay – petitioned the Ontario Superior Court of Justice for protection saying it intends to make a proposal to its creditors. The court appointed the Toronto-based Richter Advisory Group as the trustee.

Bowring, the gift and tableware specialist has sought protection under the Bankruptcy & Insolvency Act as has its sister retailer, furniture and accessory merchant Bowring.According to documents filed with the court, the company’s debt is valued at $50.4 million, with $24 million being owed to CIBC.

Fluid is owned by Fred Benitah, whose family operate a number of retail chains in Canada including Fairweather and International Clothiers, among others.

The trustee’s first report to the court notes there are 52 Bombay stores across the country, offering furniture, occasional furniture, wall décor and accessories. There are 53 Bowring stores, which focus on giftware, tableware and There are about 43 Bombay stores, selling home furnishings and decorative accessories and decorative accessories. Most of the stores are located in Ontario and Quebec.

Bombay has a work force of 660, while Bowring has about 530 employees.

Fluid is the holding company that owns the two retail entities. It purchased both in early 2015 through a restructuring of those businesses under the Companies Creditors’ Arrangement Act.  The current ‘notice of intention to make a proposal’ was filed under the Bankruptcy & Insolvency Act.

For the first ten months of its current fiscal year, which ended 28 July 2018, Fluid has consolidated sales of about $76 million with a net loss of about $5 million. Sales for the 2017 fiscal year were $96 million with a net loss of about $500,000; down from $98.8 million for the 2016 fiscal year, which recorded a loss before income taxes of $1.7 million.

The court confirmed the appointment of Gordon Brothers Retail Partners as the liquidation consultant responsible for selling off the company’s inventory and owned equipment. The liquidation sale began in early November and is expected to end on 31 December.

Maureen Atkinson, senior partner at J.C. Williams Group, a Toronto-based retail was quoted as saying neither Bombay nor Bowring were on top of fast-changing shopping trends and struggled to compete in a crowded marketplace and emerging e-commerce players such as Wayfair and Amazon.

“Bombay and Bowring are old business models that hadn’t kept up,” she told the Globe & Mail. “Nobody really wanted to shop there.”

Drive to CFS 2019 begins

5 November 2018
Community, Events, Furniture, Mattresses

MISSISSAUGA, Ontario – Exhibitors looking to secure display space at the 2019 edition of the Canadian Furniture Show (CFS) are welcome to make their reservations beginning today, the organisers of this country’s only national furniture industry trade event have announced.

As it has been for the past four-plus decades, the 2019 CFS will be held at the International Centre here from Friday to Sunday, 24 to 26 May.

The event is owned and organised by the Montreal-headquartered Quebec Furniture Manufacturers Association (QFMA) and is believed to be the fifth largest trade event of any kind staged in Canada each year.

One change has already been made to the program for 2019.

“We are happy to announce that this year, the Canadian Home Furnishings Alliance (CHFA) will hold its annual awards gala at the International Centre on Friday the 24th, the first night of the show. A complimentary cocktail reception will be hosted for all show attendees beforehand,” Pierre Richard, chief executive officer of both CFS and QFMA, said in a statement.

Historically, the gala has been held on the evening before opening day and is the occasion when the CHFA presents both the Lifetime Achievement Award and the Retailer of the Year Award. For the past two years, the Retail Sales Professional Award honourees have also been presented to the industry.

Although specific figures weren’t given, Richard said CFS welcomed more retailers in 2018 than it did the prior year.

“The Canadian Furniture Show is the can’t-miss event in the Canadian furniture industry and has a unique place in the North American market,” he said. “In fact, about 75% of its visitors do not attend either High Point Market or the Las Vegas Market and close to 80% of its exhibitors do not participate in these two events either.

Approximately 215 furniture, mattress and accessory resources exhibited at CFS last June, including this country’s three largest furniture, mattress and major appliance buying and marketing groups: Cantrex Nationwide, Mega Group and the Dufresne Retail Solutions Group.

"The Canadian Furniture Show is the best time and place in Canada for brand promotion and building customer loyalty. No efforts are spared when it comes to offering interesting business opportunities by attracting new exhibitors and new visitors,” Richard continued, adding, “For example, the show will continue to provide visitors with hotel room discounts.”

Exhibitors who participated in the 2018 edition can renew their space for the 2019 show until 30 November either by calling Simon Harris, CFS sales manager at 1 (866) 468-4436 or by visiting the event’s web site at canadianfurnitureshow.com. New exhibitors can apply any time and will be contacted right after the renewal priority period.

The registration desk for retailers, designers and other industry professionals will open next February.

The next Canadian furniture industry event will be the Toronto Winter Furniture Show, which is organised by the CHFA. It is scheduled for 26 to 28 January and concurrently with the winter edition of the Toronto Gift Fair.

The QFMA recently announced that in 2020, CFS will be held from 16 to 18 January.

Related Story: CFS confirms 2019 dates, moves 2020 back to January
Related Story: 2018 CFS: Focusing on product

Meet the 2018 RSPA honourees

5 November 2018
Events, People

TORONTO – At this year’s Canadian Furniture Show, Home Goods Online had the privilege of interviewing the four recipients of the 2018 Retail Sale Professional Awards on camera. In their own words, they wax enthusiastically about their choice of careers, how they came to be in this business and what the future holds.

Each of four – Terry Harder of Innovative Sleep Solutions in Surrey, British Columbia (Pacific Region); Randy Shanks of Daley’s BrandSource Home Furnishings in Fredericton, New Brunswick (Atlantic Region); Marisa Deluca of La-Z-Boy Furniture Galleries in Etobicoke, Ontario (Central Region); and, Brian Palethorpe of Perfect Home Furniture, Calgary, Alberta (Western Region) – were profiled in the Fall 2018 edition of the HGO Merchandiser.

The recipients of the 2018 Retail Sales Professional Awards are seen here with Brad Geddes (centre), president and CEO of Zucora Home, the program’s Presenting Sponsor at this year’s Canadian Home Furnishings Awards gala. Seen here from left to right are: Terry Harder; Randy Shanks; Marisa Deluca; and, Brian Palethorpe.In this video segment, they expand on those themes and demonstrate why they were selected. Also, Brad Geddes, president and CEO of Zucora Home – the program’s presenting sponsor – discusses why the program has become increasing popular and potentially more important.

"When you dig into the background of RSP Award nominees, you discover professionals who are passionate about what they do, believe in helping others and are driven to create success. In many cases, nominees have been doing this important work for decades but always remain open to learning how to improve,” he believes. “The Retail Sales Professional Awards is our industrywide opportunity to recognise the significant value that these key individuals provide for all of us.”

The call for entries for the 2019 RSP Awards will be made in January.

Click here to view HGO’s on camera interviews with the 2018 RSP Award honourees.

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