I've never seen anything like it. Suppliers are calling me begging for orders as they've never done before. Even new vendors are calling, ones I've never had any business dealings with before. I mostly expected this, as backlogs have wound down and many find themselves with nothing to build, and no orders on the fax machine. I think we're going to start seeing some suppliers in trouble next (first were the retail stores).

Smart suppliers are reacting to the poor economy by holding the line on pricing, offering promotions and reducing inventory of parts on hand. Some of the not-so-smart ones are continuing to do business just like they did in the 90's and they're not receptive to new ideas. One cannot be stagnant, either in the supplier or the retail end of things. Run lean, but run smart.

What I'm seeing at the consumer level is very slow sales in case goods such as dressers, beds, tables and chairs. Upholstery sales are smoking hot however - especially leather - and I think what is happening is many people have decided to save a bit of money and stay home. And if they're staying home, they're getting a High Def Flat Panel TV and a comfortable sofa and/or recliners to watch it from.

There is also a definite move away from junk furniture, the low end of the market. Younger buyers who used to operate from the theory of "I get tired of it and want something new in five or six years" have figured out that cheap furniture they planned on tossing on later on really isn't holding up or performing very well in years 1, 2 and 3. Also, there is a huge backlash against Made in China furniture (and with good reason). Customers don't want it any more, whether because of the quality issue or the fact that they want to support made in USA products. I find almost everyone that walks into my place asks that question right away.

2009 is going to be an interesting business year. Those stores and suppliers that weather the downturn will be well-positioned when business comes back, as it surely will and probably with a huge, pent-up demand when it does.