W&WP September 2003
NASFM Helps Members Operate Smart
Responding to the needs of its members in a sluggish economy, the National Assn. of Store Fixture Manufacturers is focusing on programs that will help store fixture makers run leaner and operate smarter.
The 47-year-old association, based in Hollywood, FL, has more than 625 members. About 400 of them manufacture store fixtures; the balance is comprised of associate members that supply products and services to the store fixture industry.
Klein Merriman, executive director of NASFM, discusses some of the industry's challenges, their impact on store fixture manufacturers and how the association is trying to help its members meet them.
Wood & Wood Products: Are there some parts of the store fixture industry unaffected by the slow economy?
Klein Merriman: For our industry the impact of the economy on our members has a direct effect. We are not able to create demand on our own. When retailers are not expanding or renovating and are instead cutting back on capital expenditures, it directly affects us. There are segments that are doing fine because retail is so huge. If people aren't going to one store maybe they are going to another. Some of the discount mass merchandisers are doing fine. For example, there is always going to be a hot teen apparel store of the moment that is doing fine. There are even segments that have perhaps benefited by the slow economy; the dollar stores are one example. The last couple of years we saw that the store fixture industry was flat to down slightly in 2001 and 2002 in terms of revenue.
W&WP: Have you seen any changes in membership due to the current economic climate in retail?
Merriman: The Industry in the last 12 months has seen two of the top 10 largest companies go bankrupt and three of the top 20. It's an extremely fragmented industry but there still have been some well-publicized bankruptcies. Our membership is off slightly but we have done well overall. Our membership numbers approximately 625-650 total with close to 400 regular and 225-plus associate members.
W&WP: What is the association doing to help its members?
Merriman: We do all kinds of things as an association to help our members. For our annual meeting in late October, we will be discussing the impact of imports on the furniture industry and if there are lessons to be learned there. Round table sessions will feature topics such as cost controls and understanding purchasing techniques such as reverse auctions. A session about methods of finding smaller retailers who have the best chance of growing rapidly will also be included.
We definitely plan educational programming based on addressing what we think is going on in the industry. We have done lots of programs on lean manufacturing. Our members have cut costs and cut and cut again. They are typically high-volume custom manufacturers. They have cut capacity and overhead and there are probably more cuts to be made, but for many, they have cut to the bone and part of the challenge is in how to grow the top line how to get more revenues. That's why we're holding sales and marketing seminars.
W&WP: What kinds of information and programs do NASFM members want?
Merriman: We have learned that members want us to focus on several topics. Doing our manufacturing seminar, we focused on lean manufacturing and we have focused on the project management area and on different ways to organize a company to make it more customer-focused and user friendly to customers. We have done sales and marketing seminars discussing topics ranging from the competitive environment to sales compensation practices to the relationship between selling and marketing and brand enhancement tailored to fixture manufacturers.
W&WP: Have imports affected the store fixture industry?
Merriman: The area where we see imports making a dent into the U.S. is with metal imports for store fixturing. In the last few years, metal imports have started to grow in importance, rapidly. We think we are well behind in the evolution of the trend compared with residential furniture and office furniture. We are trying to learn what we can from those sister industries.
W&WP: How would you term the current health of the store fixture industry?
Merriman: We have been focusing on the gloomy side but the flip side is that American retail is very competitive. In general, retailers don't do as well if they have tired and outdated looking stores. If their stores look old and unattractive, depending on the category they are in, they can't compete. When retailers delay capital expenditures for new store construction or renovation, you are creating pent-up demand. We tend to be a little late into a cycle and a little late out of it, so I think as we come out of this recessionary cycle, we will come out fairly strongly.
Also, not all parts of retail are suffering, in fact, some stores are experiencing record sales and growth.
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