Furniture & Home Furnishings Wholesalers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 10,800 furniture and home furnishings wholesalers in the US resell furniture and home furnishings to retailers, builders, and other commercial customers. Major product categories include flooring and floor coverings; office and business furniture; household and lawn furniture; and linens, domestics, curtains, and draperies. Most companies are small, independent operators that serve a local market.

Dependence On Housing And Construction

The furniture and home furnishings wholesale industry is highly dependent on downstream demand from the housing and construction markets, which is influenced by economic factors.

Competition From Alternative Sources

Furniture and home furnishings wholesalers face competition from a variety of alternative sources, including manufacturers, retailers, importers, distributors, and other channels which allow customers to buy direct.

Industry size & Structure

The average furniture and home furnishings wholesaler operates out of a single location, employs 10 workers, and generates $8-9 million in annual revenue.

    • The furniture and home furnishings wholesale industry consists of about 10,800 companies that employ 108,600 workers and generate about $91 billion annually.
    • The industry is fragmented; the top 50 companies account for 31% of industry revenue.
    • Most companies are small, independent operators that serve a local market. Large companies include Arc International North America (US subsidiary of ARC International SA - glassware and tableware distributor), Creative Office Interiors, and Building Plastics, Inc. (floor coverings).
    • Some large furniture and home furnishings manufacturers are vertically-integrated and operate wholesale distribution warehouses that sell direct to commercial customers.
                                    Industry Forecast
                                    Furniture & Home Furnishings Wholesalers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Coronavirus Update

                                    May 3, 2022 - China’s Zero-COVID Strategy Slows Manufacturing
                                    • Furniture and home furnishings wholesalers that rely on suppliers in China may be experiencing increased supply chain disruptions. China’s manufacturing output decreased to a 26-month low in April as its zero-tolerance approach to the pandemic slowed factory output. The Caixin China General Manufacturing purchasing managers’ index (PMI) dropped from 48.4 in March 2022 to 46 in April. A reading below 50 suggests output is contracting rather than expanding. In April, new orders and production fell to their lowest levels since the survey began in 2004, and exports declined at the steepest rate in nearly two years. Delivery times grew at the second-fastest rate in the index’s history amid travel restrictions and raw materials shortages.
                                    • Seasonally adjusted wholesale furniture sales rose 4.5% in February 2022 compared to January and were up 20.9% year-over-year on an unadjusted basis. Unadjusted furniture and home furnishing store sales increased 4.2% in March 2022 compared to the same month in 2021. On a seasonally adjusted basis, furniture and home furnishing store sales increased 0.6% in March compared to February.
                                    • US new home sales in March 2022 were down 8.6% compared to February and fell 12.6% year-over-year, according to the Census Bureau. Homebuilder confidence, as measured by the National Association of Home Builders/Wells Fargo Housing Market Index, decreased to 77 in April 2022 from 79 in March, marking the fourth consecutive monthly decline. Higher materials costs and rapidly rising interest rates are making housing less affordable, which is weighing on builder confidence. Builders report that sales traffic and current sales conditions are at their lowest since summer 2021 as higher mortgage rates and supply chain disruptions have unsettled the US housing market, especially for first-time homebuyers. A healthy housing market is a strong demand driver for furniture sales.
                                    • Rapidly rising home prices have increased homeowner equity which is expected to boost residential remodeling spending through 2022, according to the Leading Indicator of Remodeling Activity (LIRA) report released in April 2022 by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 15.8% year over year to $406 billion in the second quarter of 2022. On a year-over-year basis, Q3 remodeling spending levels are forecast to rise 19.7%, then drop slightly to 17% growth in Q4. Year-over-year growth will slip further in Q1 2023 to 15.1%. Home improvement spending is projected to taper off beginning in the third quarter of 2022 amid rising financing, materials, and labor costs and concerns about a possible economic slowdown. Remodeling activity is a key driver of consumer demand for furniture and home furnishings.
                                    • Amid rising inflation, consumers that are pinched by high gasoline, food, and housing prices may postpone some high-end discretionary purchases such as furniture. In March, inflation rose 8.5% compared to year-earlier levels and grew at the fastest pace since December 1981. Consumer prices for furniture and bedding rose 15.8% in March 2022 compared to the same month a year earlier.
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