For more than a decade we lived in a culture of real-estate ambition as up-ticking values made every house a potential nest egg. God help us, we were a nation of bidders and flippers consumed by balloon mortgages, rate locks and transfer taxes.
Now that Americans are resigned to staying put for a while, will they spend more on renovating and refurnishing their existing homes? A $20 million ad campaign launched yesterday by Ogilvy & Mather urges Americans to think of their homes as the focus of their emotional lives, if no longer their financial lives, and to spend accordingly. “Things that fill our home also fulfill us,” an online version of the ad states. “They become who we are. Giving us joy. Providing us with comfort.” A print version (above), which appears in Metropolitan Home and Elle Decor, shows a cute family cuddling on a couch. A pricetag affixed to the couch says: “22 percent cotton, 13 percent giggles, 15 percent group hugs, 11 percent afternoon naps.”
The message: investing in family bonding is not luxury. Maybe not, but spending on couches, drapes and other furnishings is considered a leading economic indicator precisely because it is so discretionary. That new end table is among the first items deferred when the economy sours, and among the last to come back during a recovery. Furniture spending generally trails housing by six to nine months, according to Warren Shoulberg, editor-in-chief of HFN, a trade magazine. That means any upswing is still six months off. Sales of home furnishings fell 12.9% over the last year, and they’re still dropping. Sales were down .9% in July from June, according to the Commerce Department.
Behind the ad lies a bit of industry intrigue. For decades the American furniture business has been based in High Point, North Carolina, where much of it was once (but no longer) manufactured. But over the past four years the momentum has shifted to the flamboyant World Market Center (above), a 1.3-million-square-foot showroom and exhibition space in Las Vegas. The Las Vegas group commissioned the ad campaign, which amounts to a declaration that it now speaks for the industry. “None of the individual companies has the ability to do something like this on their own so Las Vegas just stepped up and did it,” Shoulberg said. “They’re clearly trying to one-up High Point with this.”