Key factors in the recovery were discussed in a Distributors Forum, led by the bosses of some of the biggest US Distributors; MSI, Walker Zanger, and OHM. They all agreed they had been hit hard by the economic downturn, but were recovering. Rup Shah of MSI estimated that it would take until 2013 for the market to return to 2005 levels. He predicted that 30% of the US Distributors would go out of business by 2013.

All three companies’ managers believed that the principal test of who would survive and who wouldn’t was the ability to obtain low cost capital. Companies which had excessive debt levels and who could not get further financing were unlikely to survive. In addition, they drew a comparison between the large multi-location distributors and the small, boutique, one-location operations. These smaller companies had a disadvantage of less buying power and limited access to financing, and therefore, in order to survive, it was recommended they find a niche marketing strategy where they could compete, rather than go head to head with the big national companies – a race they would lose.

Another point of discussion across the four day show was profit margins. Everyone agreed that, during the bad economic period, downward pressure on prices had caused everyone to operate at minimum or zero profit levels. This meant that companies were living off of resources from previously better times. Everyone agreed, operating like this could only last so long, and that the US stone market would not really recover until profit margins could get back to positive levels. No one seemed to agree when that would be. But they felt it was essential to do so before distributors could begin to pay down the debt they owed overseas suppliers.

Coverings is the last stone fair in the US for 2010, although there are other stone fairs throughout the world. We will have to wait to see how positive the US recovery can be. Certainly the level of optimism in Orlando will help.