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The housewares market has not suffered from a softening of the housing market, according to the International Housewares Association. On the eve of IHA's mid March convention, representatives pointed to strong 2006 sales, and expressed cautious optimism for continued growth this year.

Their positive projections are based in part on continued product innovation and consumers' willingness to trade up. These factors combine with a stabilizing of cost pressures and the nation's improved employment picture.

"Given the historic pattern of consistent consumer spending on home goods, we expect our industry to do quite well, even during a time of financial challenges that might be difficult to overcome in other categories," said Phil Brandl, president of IHA. "We expected that 2006 would wrap up on solid sales ground, and innovative companies are budgeting for 2007 sales increases."

"We do see continued industry consolidation, particularly at the supplier level, as the result of retail consolidation and other internal and external pressures," he added. "Innovation and creativity are the words of the day if companies want to thrive. Consumers have shown that they are willing to trade up for innovation and features they want."

Despite some predictions concerning the negative impact of a slowing housing market, members of the IHA board of directors say it hasn't softened sales of home related items. One reason: larger homes mean more housewares. The average size of a new home went up 10 percent during the 1990s, with the increase attributable to the, "monster home," phenomenon that emerged in the '90s, and was even more prevalent from 2000-05.

"One would think we would see a softening because many of our company's products are absolutely for new homes," says IHA board chairman, James L. Glenn, president and chief executive officer of Whitney Design, Inc. "You buy an ironing board when you need one or when you move. That being said, you would think there would be a lowering of iron board sales, but we haven't seen that. It appears that you can have a decline in the new housing market and still pick up new consumer sales by creating new and innovative products."

New housing starts are not very significant for the housewares industry, adds Jeff Siegel, CEO of Lifetime Brands Inc. He says they are less important than, "New household formations," resulting from marriage and divorce that, "require a new set of everything. Those reformed households are very important and those numbers haven't changed."

Fewer new housing starts are, "Not relevant in the short term," agrees Peter B. Cameron, IHA board chairman elect and CEO of Waterford Wedgewood. "If the situation were to deepen, it would clearly affect housewares."

Regardless of the product category, says Bruce Kaminstein, president of Casabella Holdings LLC, "Housewares companies can maintain growth, even while manufacturing cost pressures continue, with smart design and innovations that reflect what consumers say they want. Many companies have elevated themselves in terms of design."

Kaminstein and other housewares executives continue to express concern over the increases in raw materials and energy costs they absorbed through much of 2006, yet leaven their comments with optimism that higher production costs have stabilized, and distribution can be increased by pushing price points, while offering consumers real reasons to, "trade up."

"The industry faced cost pressures from increases in materials and energy costs in 2006, yet it was buoyed up by several trends that maintained consistent consumer spending on home goods," Brandl says. Now, "Materials and energy costs have stabilized."

Article ID: 119