by Aggressive product introductions, store openings offer the potential to gain market share for those willing to take the risk
HIGH POINT — Few would describe these as booming times in the industry. Retail traffic and sales have been slow since the start of the year, and furniture orders and shipments over the past six months or so have largely lagged compared to the prior year.
That said, we’re viewing the slowdown through the lens of months of unprecedented demand we saw during the pandemic, particularly in 2021 and parts of 2022. Comparing business with pre-pandemic levels, some in the industry are not doing as poorly as it might appear.
Take for example, La-Z-Boy’s latest results for the recently ended fiscal first quarter. While consolidated sales of $482 million were down 20% from the first fiscal quarter of 2022, they were in line with guidance of $470 million to $490 million. They also were up over the pre-pandemic level of $413.6 million for the same period in 2019, a 16.7% increase.
For its third quarter ended Sept. 30, Havertys Furniture reported net sales of $220.3 million. While down from the $274.5 million reported for the same period in 2022, sales also were up from the $209.3 million in the same third quarter of 2019. During this year’s third quarter, the company noted that average written ticket sales increased 4.7% and that its custom upholstery business was up nearly 14%.
Arhaus, which became public in 2021, this week revealed its third quarter earnings for the quarter ended Sept. 30. Total revenues for the quarter were $326.2 million, up considerable from the company’s third quarter of 2021, when it reported $203 million in revenues, which also happened to be during the height of demand during the pandemic. To illustrate that point, that was a 68.7% increase from the third quarter of 2020, when revenues were $121 million.
These are just a few examples of companies whose sales exceed pre-pandemic levels. In fact, according to the U.S. Department of Commerce, furniture and home furnishings store sales for each month this year are still significantly above what they were for not only each of the same months of 2019 — they also exceed the numbers dating back to 2018, 2017, 2016 and beyond.
It’s this historical data that helps put our current situation in perspective despite major company closings this year including Klaussner and Mitchell Gold. The competitive nature of the industry is also spurring some to unveil new growth initiatives to carry them through this year and beyond, positioning themselves to capture market share post-recession.
Here are several of those initiatives, most of which we have previously reported in Home News Now:
+ Legacy Classic | Modern has formed a new motion upholstery division and hired industry veteran Beth Dixon to run the segment. It had a significant product launch in the category this fall with 12 motion groups featuring sofas, sectionals, loveseat and recliner combinations whose wood accents and trim complement its capabilities on its bestselling case goods collections, namely in finishing.
+ Henglin Home, a division of Henglin Home Furnishings Co., has opened new showrooms in Vietnam and China where it has invited or plans to invite customers from the U.S. In addition, it opened a new 15,000-square-foot showroom in High Point for the fall market cycle. There it launched 55 groups that highlight its capabilities in both motion and stationary upholstery.
+ Upholstery resource Royal Morris Living more than doubled its mix of products at the recent October High Point Market. The U.S. marketing arm of China upholstery manufacturer Morris Home, it debuted in April with more than 24 sets of upholstery, both motion and stationary in fabric and leather. This past market it added more than 30 new sets — with half being in motion and half in stationary upholstery — available in JBS and Crest leathers from Italy and Culp, Dorrell and Z-Wovens performance fabrics.
+ Retailer BoConcept revealed this past summer that it planned to open three new stores by the end of this year, bringing its total U.S. store count to 22. These are in markets the company abandoned or scaled back in as it rethought its retail strategy. The goal is to create a uniform presentation and mix of product for consumers that reflect its European lifestyle aesthetic and its Danish roots.
+ This past spring, Palliser began rolling out its Studio gallery program at retail. By late September it had opened more than 40 of the gallery footprints at 31 retail accounts around North America. Ranging from 3,000 square feet to 14,000 square feet, they are offering lifestyle presentations of the company’s stationary and motion upholstery mix along with design centers where customers can customize the product in multiple fabric and leather options.
+ AkzoNobel just opened an estimated $60 million research and development center in High Point. It aims to bring further innovation to the finishing category, using the latest technologies and equipment that consolidate both solvent- and water-based finishes, while also helping the company achieve key sustainability targets over the next several years. Its latest technologies and equipment also aim to bring new and innovative products to market more efficiently, allowing customers quicker access to the latest in wood finishing.
+ La-Z-Boy continues to invest in its retail footprint, having opened six new gallery stores in the past year, as well as two new outlets in Columbus, Ohio, and Chicago. It also opened six new small-format urban showrooms for its Joybird division, including The Row in downtown Los Angeles and on Capital Hill in Seattle, bringing the total store count to 10 for the e-commerce division.
+ Ethan Allen is making a major investment in its Design Centers, with a plan to update more 170 of these facilities in North America. Among these was the launch of its Danbury flagship location as an Interior Design Destination. The goal of the project is to present not only a new fashion-forward design aesthetic in the spaces themselves, but also to offer a wide mix of product that appeals to designers and their clients alike.
+ According to its latest annual report, Arhaus is looking to more than double its physical store footprint, expanding from 74 traditional showrooms and eight design studios as of early September to more than 165 stores over the next decade or more. It also is looking to grow its e-commerce business as part of an omnichannel approach that reaches buyers where they shop for home furnishings.
These are just several examples of steps the industry is taking to be prepared for an industry rebound once it occurs. While it likely won’t appear anything like the demand of the pandemic, we anticipate it will be notable nonetheless as consumers continue to invest in and seek solace in their homes.
