The picture frame industry is expected to continue

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The picture frame industry is expected to continue its modest growth in 1995, and is projecting a 5% increase for 1994. The growth is attributed to mass market sales and a higher gross margin in sales. Technology has enabled frame makers to make a better product at a lower cost. Customers are more particular in what they choose, and select frames that offer them quality at a reasonable price. Consumers are also interested in photo storage products.

Frames have had a slightly better year at retail in 1994 than in 1993 – HFD projects a 5 percent increase in retail dollars to approximately $1.6 billion (the 1993 increase was 4 percent) – but most vendors do not see the improvement as a sign the business will resume its one-time double-digit growth levels.

For example, Michael Block, president of Loui Michel Cie, acknowledges some improvement this year – enough of one to enable his company to strike out on its own again with new offices in Harbor City, Cal. and a new distribution center in St. Louis, after having become a division of Bee International last year. At the same time, Block adds that the frame category is a pretty mature one.

Barry Gordon, general manager of Melannco, agrees that frames, at least in upscale retailers, are a mature business that will continue to grow only “in a reasonable way.”

According to Sandy Reiter, executive vice president of MCS Industries, which serves both mass and upscale retailers, the business is stronger and healthier now at mass than in upscale channels.

“It was a very strange year”, Reiter adds. “The severe winter in the East hurt business early in the year, but the second half has seemed to be very strong.”

Nick Lazaris, president of M.W. Carr, which entered the mass market last year after having focused exclusively on the upscale market throughout its long history, goes further than Reiter. Lazaris credits this year’s increase in industry sales almost entirely to the mass market.

The most glowing reports on the frame business do, in fact, come from mass market vendors. “Business has been very good for us,” comments Kim Kiner, director of marketing and product development for Acme Frame Products. “We’ve had fantastic results from new collections and promotions. The market is receptive, buyers as well as consumers.”

Frank Bigger, president of Magee Co. says he is “more excited about the industry than in years.” Not only is Bigger’s own business up substantially, there are indications the entire mass market frame business is thriving, he says. One indication is the worldwide shortage of flat glass, to which increased demand from frame vendors has contributed.

Another is that mass retailers are seeking a higher gross margin in frames. “A year or two ago, retailers were content with a 40 percent gross margin,” Bigger notes. “Now, they’re looking for 50 percent. The category must be strong for this to happen.”

If mass market vendors are more bullish than their upscale market counterparts, retailers at every level give positive reports on frame sales. This seems to reflect the success of dramatic price reductions in the upscale market and of heavy price-point promoting at all levels.

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