Furniture Manufacturers

Industry Profile Report

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

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 13,400 furniture manufacturers in the US produce furniture and related articles using a variety of materials and production processes. Product categories include household and institutional furniture (upholstered and non-upholstered), kitchen cabinets, countertops, and office furniture and fixtures. Furniture manufacturers may mass produce or custom-make products. Companies produce semi-custom products by modifying stock goods according to customer specifications.

Variable Raw Materials’ Cost

Fluctuations in the cost of raw materials affect profitability for furniture manufacturers.

Fashion-Driven Trends

Household furniture is fashion-oriented and demand is driven by home design trends and fads.

Industry size & Structure

The average furniture manufacturer operates out of a single location, employs about 22-27 workers, and generates $4-8 million annually.

    • The furniture manufacturing industry consists of about 13,400 companies that employ about 321,000 workers and generate about $71 billion annually.
    • Industry concentration varies - kitchen cabinet and countertop manufacturing is fragmented, while some segments of household furniture are concentrated.
    • Some large companies are vertically integrated, and may produce raw materials or have retail operations.
    • Large companies include Ashley Furniture, La-Z-Boy, Steelcase, and Leggett and Platt.
                                Industry Forecast
                                Furniture Manufacturers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Oct 26, 2022 - Focusing Investment on Growth
                                • Furniture manufacturers and retailers plan to invest in people, products, and processes in 2023 that increase efficiency, expand capacity, and improve their ability to deliver, according to Furniture Today. Firms are looking to address issues and weaknesses such as supply chain disruptions and labor shortages. Firms are stepping back from just-in-time production and building inventory to reduce the risk of lost sales due to material shortages when consumer demand is high. Firms are building more production and warehouse facilities to get their products closer to individual markets and investing in product development to freshen their furniture offerings.
                                • High interest rates, continued supply chain constraints, and elevated housing prices pushed home builder sentiment lower in October, according to the National Association of Home Builders (NAHB). Homebuilder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell eight points to 38 in October 2022 from 46 in September, marking the tenth consecutive monthly decline. Any HMI reading over 50 indicates more builders see conditions as good than poor. In mid-October, mortgage rates rose to about 6.9%, reaching their highest level since 2002. Demand for new homes has fallen as higher interest rates have made housing less affordable.
                                • High inflation may also put downward pressure on furniture demand. In September, the Bureau of Labor Statistics consumer price index report showed that consumer prices rose 8.3% in August, year over year, compared to the 8.1% rise that analysts expected, according to Furniture Today. The inflation news prompted a widespread market selloff, which pushed the stock prices for several publicly traded furniture companies lower, including Bassett, Ethan Allen, Flexsteel, Hooker Furniture, and Sleep Number.
                                • Several retailers, including Walmart and Nordstrom, have indicated they are sitting on a glut of inventories that built up during the pandemic, and heavy discounting may be needed to clear the goods to make space for holiday items, according to The Wall Street Journal. Macy’s recently noted that high inflation is prompting consumers across income levels to pull back on spending. Some retail executives and consultants expect the holiday season between November and January to be among the slowest in years.
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