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Best of Benjamin Spillman

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Benjamin Spillman
 

Expanding market

29 January 2007

LAS VEGAS, Nevada -- When an estimated 60,000 furniture buyers descend on the World Market Center on Monday, they'll find a lot more than bedding and chairs.

They'll also be welcomed by a futuristic, 16-story structure dedicated to displaying, buying and selling furniture.

The $345 million Building B marks another step in the World Market Center's effort to shift the balance of professional furniture trading west to Las Vegas from High Point, N.C.

The opening of Building B and its 1.6 million square feet of space coincides with the opening of the center's winter market, which runs through Friday. It is one of two annual trade events between furniture manufactures and professional retail buyers.

It brings the total market space to 2.9 million square feet, nearly one-fourth of the 12 million square feet the center expects to have in 2013.

The new building connects by a bridge to the existing 10-story market building, which opened in 2005.

The idea is to gradually create a massive, modern forum for trade in the $120 billion furniture industry that capitalizes on Las Vegas as a popular business destination and allows exhibitors to store and display their products all year.

"It is a good place to plant yourself," World Market Center Chief Executive Officer Harvey Dondero said of the 530 showrooms where manufacturers present their lines to retailers. "They are trying to re-create a presentation as it would be in retail; the showrooms have grown."

The Las Vegas market is expected to generate $200 million in nongaming economic impact annually. By the time it is complete in seven years, the market is expected to contribute to the creation of 35,000 jobs, $1.5 billion in personal income and $60 million in tax revenue.

Both buildings are already leased to capacity and the third building, 16 stories and 2.1 million square feet, is under construction and set to open next year.

But for all the swooping elegance of the center's exterior lines and the sweeping 180 degree views of the Las Vegas skyline and distant desert mountains, the market is still far behind it's more established competitor in the southeast.

The High Point Market dates back to 1889 and is located in the traditional heart of the American furniture manufacturing industry. Today the North Carolina market includes 12 million square feet of space in 188 buildings.

Its upcoming market event is expected to attract 70,000 people from approximately 110 countries.

"Right now, no matter what Las Vegas says, it is a smaller market," said Ivan Saul Cutler, a furniture industry marketing consultant whose blog can be found at InsideFurniture.com. "It is still essentially a regional market. The larger international market is in High Point, North Carolina."

Dondero, former CEO of Broyhill Furniture Industries and Universal Furniture, cited several reasons he thinks the center of furniture trading will shift to the west.

The World Market itself is among the primary reasons, Dondero said.

When complete, it will have as much space as the North Carolina market and the entire market will be interconnected and climate-controlled. That makes it attractive not only during the center's winter and summer market events, but throughout the year.

Manufacturers will be able to not only store furniture and furnishing but will be able to open it for special displays for large buyers.

Las Vegas is also more accessible by air not only to domestic buyers and sellers, but also to the growing Asian marketplace, Dondero said.

And the city itself is a destination with ample hotel space and attractions that add value to the marketplace, he said.

"There is not really anything like this in the country," said Dana Pretner Andrew, the World Market Center's marketing and public relations director. "There is not really a status quo to measure it against."

But despite the modernity of the new center, it is the buyers and sellers who will decide whether World Market fulfills its vision, Cutler said.

Both the new Las Vegas market and the established North Carolina market are based on an agrarian model of business, Cutler said.

Manufacturers play the role of farmers bringing their product to a central location. Buyers, in the form of furniture retailers and, to a lesser extent, interior designers, browse the aisles looking for potential purchases.

"They are attempting to become a better mercantile mousetrap," Cutler said of the Las Vegas market. "The buying power and quality of the retailer defines the success of the market."