The Furniture Industry for 2023

What I see for 2023 is this industry is pretty much out of the Covid craziness. Backlogs are shrinking, inventory is up at all the retail stores (my store is fully stocked as of this post) and manufacturers are looking for orders again. The competitiveness is back but the prices are not pre-covid in the least. So far, there have been no prices increases from any supplier for 2023, I think they are very much aware they need to control pricing. Gone are the crazy incentives for new workers (signing bonuses) and costly employee retention plans.

Stores traffic is way down, its very quiet and new orders have slowed. Interest rates? Too much buying during Covid? Prices too high? Disposable income re-directed to other things like vacations?

What do I see coming for the rest of the year?

1) Order completion times of 4 months or less from most suppliers.

2) Sale Periods from the manufacturers. They will run promotions rather than lowering prices as their need for more sales orders increases.

3) A general slowdown in sales on home furnishings.

Just my opinions, no basis in facts!

Phew, nice to hear some good news from any industry. Thanks for these updates.

Buddy Sherrill passed away recently at the age of 96. He was an icon in the furniture industry and though I never met him personally, I used to admire the Ferrari he would pull up in front of the Sherrill Showroom during the High Point Market and leave parked on the sidewalk (He owned Foreign Cars Italia in Greensboro NC). He did step away from the business a few years ago and his son runs it now, it is still privately held.

I learned also this week there are only TWO dealers that show floor stock in the metro Washington DC area for Hancock and Moore. That's amazing to me that in one of the wealthiest cities in America with a population of around 5.5 million people, there are only two dealers for the best leather furniture in the country (the Keeping Room being one, Greenfront in Manassas the other). A few years ago there were six, but they have all closed up. What this tells me is people for the most part still buy furniture on price, not on quality. longevity and style. Sheffield used to have a store in a high-rent location at Dulles Town Center, but they pulled out and closed. They are coming back with a boutique showroom in Great Falls, but its only 2,000 sf, geared towards high profit professional decorating.

I an sensitive to customer comments about what they like and don't like when they come into my store (disregarding those that say they don't like ANYTHING they see!), and have brought in more product that is a tier down from Hancock and Moore and more price-friendly. Well, that didn't really satisfy those commenting on price because as soon as I did the comments changed from "Hancock and Moore is too expensive" to "Well, this doesn't sit or is as nicely made as Hancock and Moore".

Well, YES - you can't have it both ways! The Keeping Room will continue to be the leader in the Mid-Atlantic for number of H&M pieces on the floor, I always keep 40 to 50 floor models in the showroom and will continue to do so.

Keep on keeping on, Duane! You run the store and carry product properly! No one else does what you do and wr need a high quality furniture option you provide. Too many peddlers of junk out there!
One of my favorite sales observations: "Price, Product, Service - Pick Any Two You Want!"

May 2023. Covid shortages are DEFINITELY over in the Furniture Industry and I am just getting slight whiffs of concern from suppliers on not enough orders. We went from a one year backlog in 2022 because there were no workers to possible layoffs halfway into 2023. Crazy stuff. Of course, not a single manufacturer wants to lose any people because after a year or more, they just have them trained up to where they need them to be to perform to the company standards. We are back to pre-covid order times of 8 to 10 weeks from a lot of makers right now and no one I deal with is running over 16 weeks. To be sure, the crazy signing bonuses they were offering workers in 2021 and 2022 are gone (that was a major cause of many of those price increases), and I think in the back half of 2023, we might start to see some promotions as they look for more orders. I don't have a crystal ball, but when you have been doing this as long as I have, you get a sense of what might be forthcoming. I do not forsee any more price increases coming either, thank goodness.

Crazy how much it has changed...Hopefully it reaches more of an equilibrium. Sad to have all those workers trained up only to have to lay them off.

That new H&M line should help address this issue more directly.

Really love these "state of the industry posts"

Thanks for sharing your historical perspective!

I'm not surprised actually. During Covid, everyone was working from home and realized how sad some of their furniture was, especially desks, desk chairs and the main room sofa. The rush was on to replace those and people would take just about anything, but there was no supplier inventory. Also, they were staying home and not spending disposable income dollars on other things, so they would be able to spend more on furnishings. It was record sales for two years for most furniture stores who could beg/borrow or create product. Inflation ramped up, too many price increases and interest rates also rose. That dampened enthusiasm considerably and now we are back to more or less equilibrium. But some retail outlets closed and went out of business too, so there are less furniture stores now than I can ever recall. And too many surviving stores put HUGE - MASSIVE orders in during Covid not realizing that was not going to go on forever, and like a game of musical chairs, they were left standing up when the music stopped. End result, far too much inventory they paid high prices for.

So, what happens when a store has too much inventory? It they really need Cash Flow, they run it out on sale, but that kills their margins which leaves them in an unhealthy position financially. But to be sure, they stop ordering new pieces from the Makers, which means backlogs come down, way down....and makers start to freak out a bit. If you can't' keep the troops busy, you have to lay some of them off. And they will not come back, they move to other jobs in other industries and they lose that trained worker.

I have not ordered any new floor stock of any kind, from any maker for the last four months. I'm still getting items drift in from last Fall orders, but I have nothing new in the pipeline since January. And since customer are slowing into the store with orders, you can see what happens to the manufactuers, my position is not unique - most stores are not ordering much new stock. Will be an interesting Fall when orders typically pickup.....

So are you predicting more “sales” in the future from the manufacturers?

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Originally Posted by Shirley

So are you predicting more “sales” in the future from the manufacturers?

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Not exactly. I am predicting Promotions, which is not really the same thing as an all-out sale. Manufacturers rarely have all-out sales, instead they develop ways to move more product in ways that don't say desperation. Three that have recently surfaced for example:

1) Fjord's Furniture known for Scan-design motion, send out a dealer memo that said "Any salesman in your organization that can sell (8) units before the end of June is entitled to a FREE power recliner for their personal use, shipping included".

2) Hancock and Moore just rolled out their "H" Series Home frames in selected leathers at some amazing price points, effectively to what they were selling for 20 years ago. I posted that here (no one responded to it, other than one person who asked to be sent more information, but as mentioned, I do not have more info).

3) Hooker Furniture / Bradington Young rolled out some quantity discount deals, if the dealer bought twenty or more units as I recall. I didn't pay that much attention to it once I saw the quantity requirement.

Not really much response you can give I guess when you say up front you don't have any additional information. I am sure you will get more when there is. Need prices, leathers, frames, etc.
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Prices I have, and the item numbers. What I don't have is dimensional specs and additional photos.

July 2023 and the Covid Shortages are DEFINITELY over, don't let anyone tell you otherwise. Suppliers to the factories that cannot get parts to the makers have been replaced with those who can. Everyone is getting out of China as fast as they can for all things, its now a pariah in the furniture industry (and others as well). Markets are shifting, though few jobs are coming back to the USA that were already outsourced.

The companies that catered to lower-end furniture are collapsing and closing doors. Why? Inflation and cost of living (groceries, fuel, interest rates) have taken that customer out of the market, they are not purchasing discretionary goods, focusing on buying only essentials. Better companies that sell to higher income groups are doing OK, because their customer is spending as long as their stock portfolio is decent and their home values hold up, and their employment is steady. Mid-level companies are so - so, not in trouble, but not doing well, either.

Sale promotions are everywhere. You may or may not see them as consumers, but they are definitely there to the dealers. And they are different sale promotions too, not what we used to see. A lot of them are clearing out accumulated product, or have to do with getting out of China-made goods. For example, Hooker Furniture just sent me a promo sheet this morning with 15% off all in-stock recliners through the end of the month. Hooker does not produce domestically, everything is built in the Pacific Rim. I counted up their inventory and they have 4,249 recliners in their warehouse ready to go, and who knows how many units on the water that will arrive this summer? A lot of companies figured that demand they saw during Covid would keep going, the smart ones cut their orders back in 2022, the not-so-smart ones kept ordering and warehouses are full to the brim. 15% off is really nearly the entire profit margin on these units from Hooker, I was pretty shocked by that one. They may have left themselves 5% remaining, but manufactures don't make much more than 20%, if that. Being a publicly traded company, that is going to hurt their quarterlies. I've never seen a company have that many recliners in a box, ready to go. Stunning.

But customers are not reacting to sales, I think they are all traveling. Videos from many popular attractions abroad show record crowds at popular destinations, and crowds look like a World Cup Soccer match just let out.....I posted that killer sale deal from Hancock & Moore / Jessica Charles last week and nothing.....not even one inquiry. And that's a heck of a deal on those items, so I have to conclude many are traveling or spending on other things.

To be sure, there is not talk of price increases, I have not heard of any in the works. Savvy manufacturers know better than to do that in this consumer climate. Cut margins if needed, but don't raise prices!

Do you have the specifics on the new program leathers and styles from H&M yet?

I’m interested in the Jessica Charles chairs, but every fabric I like online is not in the promotion. Is there any savings to select a fabric not in the list that was attached? Thanks!

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Originally Posted by Shirley

I’m interested in the Jessica Charles chairs, but every fabric I like online is not in the promotion. Is there any savings to select a fabric not in the list that was attached? Thanks!

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No, the promotional fabrics are all on the list I scanned in, all others are at regular price.

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Originally Posted by SueCT

Do you have the specifics on the new program leathers and styles from H&M yet?

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Specs are on the H&M website, those items begin with an "H" (which stands for Home)

https://www.hancockandmoore.com/Products/NewProducts

Since the fabric I loved is not on the sale list, I was thinking maybe of doing chair in the neutral and using the bright fabric as an accent pillow. Can you buy Jessica Charles fabrics by the yard for this purpose or not? I don’t see any info on their website. Thanks!

Yes, and they can make the pillows for you as well.

Another manufactuer closes down.

Attachment 15732

Mitchell Gold / Bob Williams abruptly closed with no notice to employees, they are just a few miles from Taylor King / Hancock and Moore. Another sign of stress on the industry as consumers spend money on vacations and travel, and have slowed down on home furnishing purchases. This was not a low end company, however I always thought their products priced on the high side for what they were. They have a retail store front in Tysons Gallleria Mall that i would go into from time to time (very expensive retail space) and I would just shake my head at the prices on items that were not particulary unique or built to a high level. I assume that store will be closing as well.

This is a very competitive industry. Very much a game of chess as to your market niche, efficencies in production, getting the word out about your products and controlling costs while trying to give dealers and consumers what they want. Link below to read the story.

https://www.taylorsvilletimes.com/20...bruptly-close/

Terrible news for their employees. No notice and there you are with no income and the need for a new job! Its the way of the world these days, but it has to be hard for their employees.

Yes, but I know Hancock and Moore as well as Century are hiring, so those workers can go there if they can fit into those companies.

There have been a lot of manufacturers shut down in 2023 in the furniture industry.

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Originally Posted by drcollie

Another manufactuer closes down.

Attachment 15732

Mitchell Gold / Bob Williams abruptly closed with no notice to employees, they are just a few miles from Taylor King / Hancock and Moore. Another sign of stress on the industry as consumers spend money on vacations and travel, and have slowed down on home furnishing purchases. This was not a low end company, however I always thought their products priced on the high side for what they were. They have a retail store front in Tysons Gallleria Mall that i would go into from time to time (very expensive retail space) and I would just shake my head at the prices on items that were not particulary unique or built to a high level. I assume that store will be closing as well.

This is a very competitive industry. Very much a game of chess as to your market niche, efficencies in production, getting the word out about your products and controlling costs while trying to give dealers and consumers what they want. Link below to read the story.

https://www.taylorsvilletimes.com/20...bruptly-close/

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i bought some cabinets, side tables, etc from there, those were made in china. they don't have touch up paint for small chips on the cabinets. when we moved cross country all of the side tables broke. we had a lot of furniture nothing else broke. dings sure, but the legs on the mitchell gold stuff literally broke. still have some dining chairs that were made in US by mitchell gold and those are good. overall the pricing suggested luxury but it is not.

^ I bet this guy comes back in a couple of days and edits in a spam link.

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Originally Posted by Danw99

^ I bet this guy comes back in a couple of days and edits in a spam link.

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lol, ya think?

I’m faster than they are….pretty much. All spammers must get punted!