47th
NASFM Convention
Hyatt
Regency Scottsdale at Gainey Ranch
November 6 - 9, 2002
SPEAKER'S
HIGHLIGHTS
On
Nov. 8-9, NASFM members gathered in Scottsdale, Ariz.
to network and discuss the state of the industry and other
store fixturing issues. Here are a few highlights:
Annual
NASFM Meeting
At
the 2002 Annual Meeting of the National Association
of Store Fixture Manufacturers held Friday, Nov. 8,
during NASFM's 47th Annual Convention in Scottsdale,
Ariz., NASFM members elected a new president, officers,
and four new directors.
President:David C. Reynolds, President and CEO, Miller
Multiplex, Richmond, Va. Vice President: James A. Schubert, President,
Showbest Fixture Corp., Richmond, Va. Treasurer: Robert R. Frackleton, Vice President,
Reeve Store Equipment Co., Pico Rivera, Calif. Immediate Past President: Richard C. Ernest,
President, Crown Metal Manufacturing Co., Elmhurst,
Ill.
Elected to NASFM's Board of Directors are:
Marc Sagrillo, Vice President of Business
Development, Leggett & Platt Inc., Carthage,
Mo. Stanley C. Valiulis, CEO, Southern Imperial,
Inc., Rockford, Ill. Daryl Walsh, President and CEO, Stylmark
Inc., Minneapolis Richard R. Winter, President, Marmon Retail
Services, Chicago
In
addition, Klein Merriman, NASFM executive
director, brought members up to date on the association’s
activities over the past year
Keynote
Address: The New Era Strikes Back Brian
S. Wesbury, Chief Economist, Griffin, Kubik, Stephens
& Thompson Inc.
Brian
Wesbury put current economic conditions into
perspective for an audience of fixture manufacturers.For
the 30-year period between 1971 and 2001, Wesbury
said that the average growth rate for real GDP was
3.1 percent and the unemployment rate has been 6.3
percent. The week before the 2002 election, we learned
that real GDP in the third quarter grew 3.1 percent,
right on our average. Unemployment was at 5.7 percent,
better than the 30-year average. Wesbury says that
the numbers just don’t lead to the conclusion
that the economy is doing badly. "The bottom
line is that GDP has been growing 3 percent per
year, and my belief is its going to slow down a
little bit in the 4th quarter, but grow 4 to 5 percent
next year. My belief is that the economic recovery
is well under way and there is no double-dip in
the forecast, and in fact, the economy will continue
to grow,” he said.
Other
predictions by Wesbury:
Pricing power is going to begin firming up.
With
higher inflation, we're going to see higher
interest rates.
The
stock market has bottomed, is under-valued and
we're going to see the stock market perform
much better in the years ahead.
Most
importantly, it's going to be another long recovery.
For
more updates from Brian, visit his web site at
www.gkst.com
Fixture
Buying Trends & Forecast
Karen Schaffner, Group Publisher
of Retail Design & Apparel, VNU Business Publications
USA
Results
of the newly-revised Retail Interiors Survey sponsored
by NASFM and Display & Design Ideas
were released during the session. Schaffner also
covered general retail forecasts and trends currently
shaping the industry.
Highlights:
The
forecast for overall retail construction for
2003 is up 3.5 percent; remodeling down 3.1.
Fixture
budgets average $245,000 per store with most
retailers planning to spend from $100,000 to
$250,000; 8 percent are planning on spending
over $1,000,000 per store.
Retailers,
on average, spent $67 per sq. ft. on store fixtures
in 2002.
While
remodeling is down, the use of visual merchandising
is up and signage and graphics are increasing,
particularly large-format graphics.
58
percent of retailers outsource the installation
of fixtures.
Wood,
glass, and combined materials remain the most
used materials for fixtures.
10
percent of retailers say they are buying fixtures
through online auctions.
Current
growth is in new mall concepts and new malls.
"Ask
the Retailers" Panel Descussion Moderator:
James Powers, President, Continental Consolidated
Industries Panelists: Melanie Bollinger, Vice President
of Strategic Sourcing, Washington Mutual
Jennifer Riboli, Vice President of Architecture,
Washington Mutual
Tim Stevenson, Vice President of Procurement &
Pre-Construction, Federated Department Stores
Richard Tao, President, The May Design & Construction
Co.
At
this year’s retail panel discussion, retailers
talked about their relationships with fixture manufacturers,
buying fixtures online, introducing technology into
their stores, and preparing for the future. Both
Washington Mutual and Federated said their companies
were having some success with purchasing fixtures
online and would continue to explore electronic
purchasing options. They are also utilizing technology
in their stores to entertain, to educate, and to
expedite business transactions.
Washington
Mutual, which now has a multiple-vendor structure
in place for enhanced national coverage, has centralized
procurement and purchasing in preparation for
adding another 275 stores in 2003 and launching
a new banking design concept. “Changing a
bank to a retail focus is a big shift, and we
need industry experts to really partner with us
to do it, and that's from the material side, the
manufacturing side, and for those folks in the
field,” said Melanie Bollinger, vice president
of strategic sourcing for Washington Mutual.
According to both Tim Stevenson, operational vice
president of procurement and pre-construction
for Federated Department Stores Inc., and Richard
Tao, the president of The May Design & Construction
Co., the big issue facing department stores is
how to remain relevant in the face of changing
consumer shopping patterns that increasingly favor
off-mall shopping. Both stores are making significant
changes in their environment and fixturing programs
as a result. While both retailers felt that their
development plans in 2003 were a little uncertain,
they are planning for banner years in 2004.
Powerpoint
presentation: Ask
the Retailers Available to NASFM Members Only
ROUND
TABLES: PEER-TO-PEER EXCHANGE
Reverse
Auctions—New Developments Co-facilitators:
Paul Pinkus, National Director of the Store Fixture
Manufacturing/Point-of-Purchase Industries Practice,
American Express Business & Tax Services
Bob Riley, President and COO, Hamilton Fixture Co.
Paul
Pinkus
While
many NASFM members have participated in reverse
auctions, the experience of the approximately 35
roundtable participants seems to indicate that few
reverse auctions are resulting in the actual building
of fixtures for retail clients. An unscientific
survey of attendees showed that only about 1 in
5 companies who made the low bid actually built
fixtures for the client, and that only about 1 in
20 resulted in an order from a new client.
Since
NASFM held its first public forum on reverse auctions
in June at the association's CEO Seminar, participants
have noted several new developments, some of which
are not positive for the fixture manufacturer. For
example, several manufacturers said that the threat
of reverse auctions has been used by current retail
clients in an attempt to drive the price of fixtures
down. In addition, it appears that some jobs that
are being put to auction fail to materialize due
to budget constraints, changes, and the current
general uncertainty in retail.
Another
more positive development is some indication that
reverse auctions are hastening the "unbundling"
of products and services fixture manufacturers provide.
In at least one case, a reverse auction was held
for the creation of design and engineering drawings
that would later be used in bid documents, a service
that more typically is expected at no charge from
fixture manufacturers.
Bob
Riley
Prospering
in the Recovering Economy Facilitators:
David Brink, Chairman, Stylmark Inc.
Jackie Glanz, President, MG Concepts
Jackie
Glanz
More
than 20 attendees gathered on two separate days to
discuss techniques their companies were exploring
to maintain and grow their businesses during current
conditions. They discussed how important it was to
keep moving business forward regardless of the economy,
and noted that it was more important than ever to
stay visible. Many commented that there was business
to be had if a company was willing to study the marketplace,
address customer needs, and diversify. Attendees agreed
that it was a good time to focus on building long-term
partnerships with each other and potential customers
who might be more accessible now. Selling below cost
was deemed to be a lose/lose situation for both customer
and manufacturer.
David
Brink
A
Sane Approach to Contract Negotiation Facilitators:
Richard W. Fetzer, Chairman of the Board and CEO,
Fetzer's Inc.
John Schlegel, President and CEO, Impressions Marketing
Group Inc.
Richard
W. Fetzer
Store
fixture manufacturing executives shared their experiences
on the challenges of negotiating reasonable, enforceable
contracts with their customers. One concern echoed
by many attendees was that more fixture manufacturers
are being pressured to accept contractual responsibility
for all sorts of things over which they have no control.
Several in attendance noted that this type of requirement
may be the "deal breaker" that causes them
to walk away from a project.
In lieu of walking, many companies have been successful
at striking out unfair or illogical terms, noting
that the contract initially offered by the retailer
is often a standard contract for vendors supplying
merchandise. Such contracts need to be modified to
address the fixture manufacturer/retailer relationship.
Other suggestions were to include terms stating that
the buyer will take possession of the inventory and
pay for it at a definite point and assigning one individual
in a fixture company the responsibility to review
and sign all contracts.
President:
David C. Reynolds, President and CEO, Miller
Multiplex, Richmond, Va.
In
addition, Klein Merriman, NASFM executive
director, brought members up to date on the association’s
activities over the past year 
Brian
Wesbury put current economic conditions into
perspective for an audience of fixture manufacturers.For
the 30-year period between 1971 and 2001, Wesbury
said that the average growth rate for real GDP was
3.1 percent and the unemployment rate has been 6.3
percent. The week before the 2002 election, we learned
that real GDP in the third quarter grew 3.1 percent,
right on our average. Unemployment was at 5.7 percent,
better than the 30-year average. Wesbury says that
the numbers just don’t lead to the conclusion
that the economy is doing badly. "The bottom
line is that GDP has been growing 3 percent per
year, and my belief is its going to slow down a
little bit in the 4th quarter, but grow 4 to 5 percent
next year. My belief is that the economic recovery
is well under way and there is no double-dip in
the forecast, and in fact, the economy will continue
to grow,” he said.
Results
of the newly-revised Retail Interiors Survey sponsored
by NASFM and Display & Design Ideas
were released during the session. Schaffner also
covered general retail forecasts and trends currently
shaping the industry.
At
this year’s retail panel discussion, retailers
talked about their relationships with fixture manufacturers,
buying fixtures online, introducing technology into
their stores, and preparing for the future. Both
Washington Mutual and Federated said their companies
were having some success with purchasing fixtures
online and would continue to explore electronic
purchasing options. They are also utilizing technology
in their stores to entertain, to educate, and to
expedite business transactions.
