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US Economy From Sofa View: Fragile, Improving

Now Lancer's sales are about 12 percent ahead of last year for products that include sofas averaging about $1,000 to consumers, sales vice president Peggy Thompson said.

"Last year was somewhat better, but this year is even better," she said while seated on one of the company's sofas in a showroom at the trade show.

The independent furniture stores who are the major customers of Lancer and other manufacturers are also doing better, according to Sageworks Inc., which compiles financial data on private companies. The furniture stores it tracks saw sales increase by about 3 percent in 2011 after several years of declines, including a 9 percent drop in 2009. In the past 12 months, those small businesses saw sales increase by more than 8 percent and profit margins rise by almost 3 percent.

But it's not an even recovery.

Bassett Furniture Industries Inc. this month reported quarterly profits rose 8.5 percent and profits multiplied nearly five-fold. Furniture Brands International Inc.'s latest quarterly sales dropped 7 percent in the first half of this year and the company lost $6.4 million. The company declined an interview request.

The recession is not over, said Dan White, president of a local investor group that bought Norwalk Furniture's plant and other assets days before the company slid into bankruptcy in 2008. The new company still uses the Norwalk name and employs about 180 in the Ohio town of the same name, but started fresh and without its old retail store network.

Sales are up 16 percent over last year, but the retailers who buy Norwalk sofas averaging from $1,200 to $2,500 are reporting monthly peaks and valleys of consumers opening their wallets, White said.

"It's very erratic and it does in a certain sense track consumer confidence," White said. "There may be these little blips here or there where you see housing starts starting to pick up, but if you look at the rate of housing starts from the mid-2000s to what it is today, it's a shadow of itself."

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