Furniture Stores

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 13,000 furniture retailers in the US sell new furniture and furniture-related goods, such as appliances, home electronics, home furnishings, and floor coverings. Major product categories include living room, dining room, and bedroom furniture; upholstered furniture; sleep equipment (mattresses, waterbeds); kitchen/dinette furniture; office furniture; and sleeper sofas, daybeds, and futons. Companies may specialize in a particular type of product (sofas, beds), style (contemporary, traditional), or price tier.

Dependence On Credit

Furniture is a large ticket purchase and many consumers depend on credit for funding.

Competition From Alternative Retailers

Furniture stores compete with a variety of alternative retailers, including department stores, retail arms of furniture manufacturers, mass merchandisers, warehouse clubs, home furnishings stores, and Internet and catalog retailers.

Industry size & Structure

The average furniture store operates out of a single location, employs 16 workers, and generates about $4-5 million annually.

    • The furniture store industry consists of about 13,000 companies that employ about 220,000 workers and generate about $79 billion annually.
    • Some companies are vertically-integrated - large retailers, such as Ethan Allen, may produce proprietary lines of furnishings.
    • The industry is fragmented; the top 50 firms account for 51% of industry sales.
    • Large companies include Ashley Furniture, Rooms to Go, Mattress Firm, and Haverty's.
                              Industry Forecast
                              Furniture Stores Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Mar 19, 2024 - Producer Prices, Wages Up
                              • According to the Bureau of Labor Statistics (BLS), producer prices for furniture retailers increased by almost 2% from December 2022 compared to December 2023 and showed growth of over 36% from 2019. Meanwhile, furniture store employment has declined in recent years, falling 3.6% in December 2023 from December 2022, and has yet to return to pre-pandemic levels. Wages in the industry have grown as companies compete for workers in a tight labor environment. Average hourly wages rose 26.2% from December 2019 to 2023, reaching their highest point in Q4 2023 of over $26 an hour, per the BLS.
                              • Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                              • A new report from the National Retail Federation and Appriss Retail shows returns for the retail industry reached $743 billion in merchandise in 2023, according to Chain Store Age. The rate in 2023 was 14.5%, down from the 16.5% in 2022 and 16.6% in 2021. The average retailer faces $145 million in merchandise returns for every $1 billion in sales. Online sales have a higher return rate; 17.6% of merchandise purchased online is returned compared to 10% for pure brick-and-mortar returns. Over 15% of holiday gifts are expected to be returned, totaling some $148 billion. Fraudulent returns account for 16.5% of total holiday returns. Types of return fraud in 2023 included returns of used, non-defective merchandise (49%), the return of shoplifted or stolen goods (44%), returns of goods purchased on fraudulent or stolen tender (37%), and return fraud from organized retail crime organizations (20%).
                              • Building permits, housing starts, and housing completions are indicators of future furniture demand. The number of building permits issued for privately-owned housing units decreased by 2.5% month over month but grew by 4.1% year over year in November 2023, according to government sources. Housing starts rose 14.8% month over month and increased 9.3% year over year in November. Housing completions climbed 5% month over month but fell 6.2% year over year in November.
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