Retail Observer

RETAILOBSERVER.COM DECEMBER 2019 24 "Faber is delighted to broaden its relationship with Pacific Specialty Brands in the USA with their strong focus on supporting independent retailers with high service levels and great support," said Warren Lopata, managing director of Faber U.S. & Canada. "With a focus on providing consistent high-quality products, Faber takes pride in manufacturing each and every kitchen hood we sell in a Faber-owned factory.'' PSB is also very pleased with this transition. Mike Kipp, president of PSB, states, "We at Pacific Specialty Brands are excited to represent Faber in the Southwest and California. We feel it is a great opportunity for our company and Faber. We trust the customers will enjoy the level of service we offer and look forward to growing with future partners!" If you have inquiries regarding this transition please visit www. pacificspecialtybrands.com or contact Pacific Specialty Brands at 877-430-5253. "KITCHEN & BATH MARKET INDEX" REVEALS CONTINUED GROWTH IN THE REMODELING INDUSTRY Trade policy has varying impacts on the kitchen and bath market, causing price inflation for manufacturers and delays for construction companies, according to a report by National Kitchen & Bath Association and John Burns Real Estate Consulting The National Kitchen & Bath Association (NKBA) and John Burns Real Estate Consulting released the Q3 Kitchen & Bath Market Index (KBMI) report, which revealed positive findings for the remodeling industry. With KBMI scores above 50 indicating growth, this quarter's KBMI of 65.4 shows sustained expansion and is consistent with Q2's index reading of 65.7. The index examines the economic pulse of the industry and can be used to gauge larger macroeconomic conditions, including consumer confidence, manufacturing and discretionary spending. In addition to the labor shortage, NKBA's membership base – made up of professionals across the kitchen and bath industry, including designers, manufacturers, retailers and building/ construction firms – cites rising prices of materials, size of customers' budgets, fear of recession and labor costs as their primary concerns. With mixed overall industry response to tariffs, some members have been able to adjust to the trade issues. The majority (54 percent) of members report that tariffs have made a moderate, high or significant financial impact to their business, with manufacturers hit hardest at 59 percent. Notably, one in three members have had to raise prices on products and material. "The KBMI arms consumers and our nearly 50,000 industry members with the knowledge they need to best understand the remodeling market and economic climate," said Bill Darcy, NKBA CEO. "We're pleased to find the industry is still growing and that future conditions are optimistic. The KBMI also sheds light on industry challenges, such as the labor shortage, which we hope to support through our NextUp program by educating youth on the many career opportunities available in the kitchen and bath space." "Our partnership with the NKBA allows us to monitor the kitchen and bath industry, which is a valuable housing indicator for our clients," said Todd Tomalak, senior vice president of research for John Burns Real Estate Consulting. "Remodeling spending is shifting as fewer homeowners choose to move and instead improve their existing homes." KEY TAKEAWAYS FROM KBMI'S THIRD-QUARTER REPORT • Q4 outlook is cautiously optimistic: Industry experts rate current business conditions at 61.7, similar to Q2 (62.7) and slightly lower than Q1 (67.5). Future business conditions look more positive than current ones, a trend evident over the last three quarters, with an index reading of 68.4 in Q3, 68.7 in Q2 and 76.1 in Q1. • Positive sales growth still expected for 2019: Members expect a 3.5 percent sales growth for the full year, not quite as hopeful as the 4.7 percent and the 5.4 percent growth predicted in the previous two quarters. • Industry health is stable: Industry insiders assess the health of the kitchen and bath business at 6.7, remaining steady from Q2's 6.6 and Q1's 6.8. Building and construction firms and retail dealers rate the health of the industry at 6.8, followed by manufacturers at 6.7 and designers at 6.6. • American-made products are booming: While 33 percent of NKBA members have had to raise prices, another third are offering different products as a result of trade issues. This has driven business to domestic brands, as well as put higher- quality American-made products in the same price range as entry-level imports. Engineered quartz countertops and entry- level kitchen and bath cabinetry have been particularly affected. For more information, visit www.NKBA.org or call 1-800-THE- NKBA (843-6522). I N D U S T R Y [ N E W S ] RO

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