Remarks on the industry and current economic conditions by Jay Goltz at the National Conference annual breakfast panel

I’ve been in this business 30 years and have been through numerous recessions and through whole ups and downs of the industry. I’m going to tell you where I think we’re at.
      First, I want to mention the recent survey that found that big boxes now have half the market in custom picture framing. Those numbers might be right, but I think they’re easy to misinterpret. If you ask thousands of people where they have gotten their framing done, maybe half of them will say a big box store. But the question is, how many of them would also go to a custom frame shop? I’m thinking probably half. And of those, how many are spending the same money at a big box? Very few. I think the average ticket at a big box store is about 60 percent or so of what it is at a custom frame shop.
      So, for the 50 percent who had framing done at big boxes, subtract out the number of jobs that would have never gone to a custom frame shop and then factor in the 60 percent price differential. I’d say that maybe 15 percent of the custom framing pie has been taken by the big boxes. We’ve also lost a couple of percent to Internet sales and a couple more to OEMs going into department stores. We’ve also lost some framing business because people are wrapping canvases around the edges without putting frames on them. And how many flat screen TVs are now taking space on a wall where pictures used to be? Maybe another 1 percent.
      Overall, I believe there’s been about 20 percent taken out of the market, and this has caused a framing recession for the last 10 or 15 years. At the same time, some frame shops have gone away. There are fewer frame shops today than there were 15 years ago. As a result, I believe we are finally realigned. We have thinned out the people who weren’t framing well and factored in the big boxes and all those other things that are not growing like they used to. The pie is now a little smaller, and there are fewer framers.
      That’s why I believe the whole recession thing is not anywhere nearly as significant as what you’re doing in your own store. Whether we have a recession or don’t or if we are already in a recession, I believe the difference is a matter of taking care of your own business. And even if the economy is going bad, with sub-prime mortgages, there are a lot of problems in the market that really don’t affect the framing industry. We’ve already taken a hit; we’ve already felt the downside of a changing market and taken our licks for the last 10 or 15 years. Sub-prime mortgages? How many people do you think with sub-prime mortgages were getting framing done? Probably zero.
      I think framing is back. If you look around at the WCAF Show and at the education, you can see that the education here is really great. Nowhere have there ever been the thousands of seats filled like this. Ten years ago, a trade show might have had 10 classes with maybe 20 people in each class. The change is no accident. We have made a tremendous shift from a cottage industry, from accidental framers, to a professional retail industry. Twenty years ago, if you just showed up you could make money in the frame business. Today, you can still make money, but it takes more to do it. And the growth in the education is a reflection of that.
      Today, we have a mature market. The quality of education and the quality of vendors has gone up. While there has been a fall out of some businesses along the way, framers can now enjoy the benefits of running better businesses and buying from better businesses.
      The success of any frame shop is not going to depend on who gets into the White House. Your success is going to depend on whether you have the stomach to go out and buy a $3,000 machine you should have bought three years ago or put another 30 moldings into your mix or look for new matboards and fabrics and fillets. That’s what’s going to determine your success. I’ve gotten a lot of energy from the show because I’ve met numerous people who say that business is great and that things are moving along.
      The success of this industry is going to be about what you do. Those who are here are already ahead of the game. For every one of you here, there are 10 people in this industry hiding in their frame shops waiting for the next recession. They couldn’t “afford” to come to the show. After being here for three days, could you afford to not be at this show? Did you not make back what you spent 10 times over by just being here? So you’re already ahead of the game because you’ll run better frame shops. You’re going to be the ones bringing in new mouldings. You’re going to be the ones succeeding in the future while the people waiting for the recession or complaining about big boxes are going to slowly become the victims.
      That’s my read on it.