Monthly Issue
From Home Furnishing Business
January 17,
2020 by HFBusiness Staff in Business Strategy, Industry 
The Chinese trade war has caused many companies to become hesitant and cautious during 2019 with many consumers sharing the same concerns. At press time rumblings of a possible trade war truce could ease some future fears. Forecasters surveyed in November by the National Association of Business Economics put the odds of recession this year at 47%, down from 60% in the spring. This month’s Statistically Speaking will highlight 2019 yearend economic indicators and point to a hopeful 2020.
U.S. Economic Indicators
As shown in Table A, GDP growth continues to be slow but stable – showing increases every quarter in 2019 through Q3, the most recent data at press time. Many indicators slowed in the second quarter of 2019 and declined, most notably U.S. imports and exports, as companies began to grapple with the longer-term repercussions of the tariff wars. Imports slowed in the Q2 2019 – decreasing 2.8%, while exports took a downturn in the third quarter – dropping 5.9%.
But the consumer shrugged off the negative economic news with slow but steady spending, up 2.9% in Q3 2019. Private residential investment, which has consistently fallen in 2018 and through the first half of 2019 found its footing in the third quarter, growing 5.1% Additional economic indicators from the Bureau of Labor Statistics (Figure 1) show the unemployment rate remaining low – fluctuating around 3.6 for most of 2019 and finishing November at 3.5. Average hourly earnings continued to slowly rise each month – increasing from $27.82 in May to $28.29 in November. Prices indexes, both consumer and producer showed virtually no growth. And not surprisingly the U.S. Import Index has showed negative fluctuations due to the ongoing trade war with China, but finished November at 0.2.
Personal Consumer Expenditures
Personal consumption expenditures have maintained growth throughout 2019, despite business’ pulling back over trade war concerns and a slowing global economy. Spending on both services and durable goods have propelled positive growth (Table B). Consumer spending on healthcare and housing increased above 4% every quarter in 2019 compared to 2018. Among the biggest losers in the battle for the consumer dollar are motor vehicles and gasoline which dropped dramatically from 2018, along with clothing and footwear that showed only slight growth.
After a disappointing first quarter in 2019, the second quarter posted good growth in all major spending categories before slowing in the third quarter and through October of Q4 (Table C). At press time, data from Adobe Analytics estimates that the sales for the full weekend (Thanksgiving through Cyber Monday) topped $29 billion, or 20% of total revenue for the full holiday season, up from 19% last year. Many retail tracking analysts reported brick and mortar traffic down and mobile phone shopping significantly up.
As shown in Table D, spending on furniture increased each quarter in 2019 over the same period in 2018. All categories of furnishings and durable household equipment maintained positive growth with the exception of carpets and other floor covering – dropping 0.6% in 2019 Q2 and major household appliances down 0.1% in the first month of Q4 2019.
Furniture and furniture accessories (clocks, lamps, lighting fixtures, and other household decorative items) both outperformed all U.S. durable goods in 2019 (yearto-date through October) with strong growth in the second quarter (Table E). Retail Sales by Home Furnishings Outlet Total U.S. retail sales, including brick and mortar stores and Internet shopping, were up each quarter in 2019 over the previous year’s quarter. Starting out 2019 with just 1.8% growth in the first quarter over 2018, each quarter followed with increases over 3% (Table F).
After increasing by 6.3% in 2018, furniture store sales were down 2.4% in the first quarter of 2019 compared to Q1 2018, while home furnishings store sales also declined 0.9%. Furniture store sales were the first to pick up – increasing 0.4% in Q2 2019. Home furnishings store sales began to show a positive change over 2018 in the third quarter of 2019 – increasing 0.9%. October sales were up 3.9% for furniture stores and 0.6% for home furnishings stores (Table F).
The much higher reported increases in personal consumption expenditures for furniture products and home furnishings emphasize the pinch retail furniture and home furnishings stores are feeling from online retailers and big box stores. E-commerce shopping for all products, including furniture and home furnishings continued double digit growth throughout 2019. Meanwhile, the biggest home furnishings retail loser, electronics and appliances stores, saw sales drop 2.9% to 5.2% every quarter in 2019 compared to 2018.
Table G details the other major types of retail sales categories. Retail sales of electronic shopping and mail-order houses continue to skyrocket as more consumers turn to online shopping. On the flip side, department stores (excluding discount department stores) continue to plummet – down 12.1% in 2019 Q2 and 10.9% in 2019 Q3. Although discount department stores also show negative growth, warehouse clubs and superstores have posted slow growth each quarter in 2019 over the same quarters in 2018.
Consumer Price Index
The Consumer Price Index (CPI) rose last November by 2.1% compared to November 2018, but was down 0.1% versus October of 2019. Many Furniture and Home Furnishings product categories increased their year-overyear prices from Nov. 2018 to Nov. 2019 with the exception of Floor Coverings, Window Coverings and Major Appliances. Exactly how much of this increase is associated with the Chinese tariff trade war is unknown, but portions of the tariff increases have been passed along to the consumer. However, compared to October, month-to-month November CPI growth declined less than 1% in all home furnishings categories, except for Window Coverings which increased slightly and Major Appliances which fell 2.9%. (Table H).
Housing
Although housing inventory in 2019 has been slow to keep up with demand, both new single-family home sales and existing home sales increased from January to October. Existing home sales grew from 4.93 million to 5.46 million, while new single-family home sales increased from 644,000 to 733,000 (Table I).
Housing starts have fluctuated throughout the year – peaking at 1.38 million in August, while completions dipped in September down to 1.14 million before finishing October at 1.26 million. The most promising outlook for 2020 is building permits took a significant leap in October to 1.461 million permits, the highest of 2019 (Table J).
Imports and Exports
Partial import data from the fourth quarter of 2019 showed October imports of furniture and bedding posting the ninth straight year-overyear monthly decline falling 10.5% over October 2018. Compared to the previous September, October one-month imports increased 3.1% primarily due to the surge from Vietnam. Chinese imports of furniture and bedding fell 37.4% over October 2018 and a one-month September to October decline of 6.6%. Outsourcing to Vietnam, Malaysia, Taiwan, Indonesia, and Cambodia has been evident as these countries have increased imports.
Trump announced mid-December of 2019 a “Phase One” deal that shelved new tariffs on $160 billion of Chinese smartphones, electronics and other goods that had been set to take effect before Christmas. He also cut the tariff to 7.5% from 15% on another $120 billion in Chinese goods. As the trade deal moves further along, a future issue will look more closely into the impact this war has had on the furniture industry and what temporary and permanent steps U.S. companies have taken to protect themselves against future wars.
December 13,
2019 by HFBusiness Staff in Business Strategy, Industry
Metropolitan Statistical Areas come in all sizes, the largest being New York-Jersey CityWhite Plains, NY-NJ (a subset of the larger CBSA) and the smallest being Fairfield, IA. Statistically Speaking has divided the counties in larger markets over 1 million in population into three designations for analysis – Core, Central, and Outlying. The layers of these markets have unique demographics and marketing within them is not a one-sizefits-all approach. Core counties always contain the principal city of the MSA, followed by Central counties that also contain large distinct metro areas. Outlying counties are still part of the MSA, but are further out from the Core and contain smaller towns. Markets with less than 1 million in population are smaller and are divided into only Central and Outlying areas.
The largest MSAs, those with populations 2.5 million and over, consist of 23 markets with 169 counties. MSAs with 1 million to 2.5 million population have 43 markets encompassing 248 counties. Figure 1 shows a summary of MSAs by size and by Core, Central, or Outlying counties and the number included in the U.S. Census Bureau’s ongoing American Community Survey. Bottom MSAs consist of many smaller counties and markets.
It might surprise some to learn that 21.9% of all industry sales are sold in only 31 of the 3,142 counties – the Core of the largest MSAs. (See Figure 2.) Over 60% of industry sales occurred in 66 markets with population over 1 million. The MSAs with populations between 250,000 to 999,000 account for 22.6% of sales. While containing 344 counties, markets with less than 250,000 population only account for 7.8% of total furniture industry sales.
Age Range
The Core urban areas of the top populated MSAs, 1 million and over, have the greatest concentration of 25 to 54-year-olds at 42%, while Central and Outlying areas have a higher percentage of older people (Table A). Central counties are the next layer out from the Core in the mega metro areas. Smaller markets under 1 million are not designated with Core counties rather only Central or Outlying. These Central counties also have more people in prime furniture buying years (25 to 54) compared to Outlying counties. In general, the less populated markets have a higher percentage of people over 55 – roughly 34% in Central micropolitan statistical areas and Outlying markets with less than 250,000.
Income
As shown in Table B, Central counties beyond the Core within MSAs that have a population 1 million and over make the most money – a median income range of $75,000 to $99,000, partially due to more married-couples with dual incomes. Both the Core and Outlying counties within the largest MSAs have a median income between $50,000 and $74,999. Central counties in smaller MSAs and Micropolitan Statistical Areas also earn between $50,000 and $74,999, while Outlying counties in smaller MSAs that have a population less than 250,000 have a median income of $25,000 to $49,999.
Consistent with the median income chart (Table B), Table C shows the Central counties out from the Core in large MSAs over 1 million population have the highest household incomes with 11.7% earning $200,000 or more, compared to only 4.2% in Central counties in small MSAs with a population less than 250,000. The highest percentage of lower income earners under $50,000 can also be found in the smaller MSAs under 250,000 population. Urban, highly populated Core counties within top MSAs have a higher percentage (39.3%) of households earning under $50,000 than Central and Outlying counties within those markets, 31.3% and 35.7% respectively.
In terms of average incomes (as opposed to median), Central counties, suburbs closely connected to the Core areas, also have higher average household incomes than both the Core and Outlying counties regardless of the size of the MSA. Central counties in MSAs with a population above 2.5 million have an average income of $108,866 compared to $99,585 for Core counties and $98,772 for Outlying counties. In populations 1 million to 2.5 million, Central counties have incomes 18% higher than Core counties (Table D).
Housing Status
Not surprisingly, the larger the MSA the higher percentage of occupied housing units versus vacant housing units. Central counties within MSAs with populations 1 million and over have 91.9% occupied housing units, compared to 85.8% for Central counties in MSAs with population less than 250,000 (Table E).
The percentage of owner-occupied versus renter-occupied housing units fluctuates based on whether the counties are Core, Central, or Outlying within the MSA (Table F). As expected, Core counties within the largest MSAs have the most renters – roughly 47% percent of renter-occupied housing units. Outlying counties have predominately owner-occupied units, above 70% for both top and bottom MSAs.
While bigger MSAs contain households making higher incomes, housing is also more expensive and many more homeowners carry mortgages. Therefore, the smaller the MSA, the greater the percentage of owner-occupied housing units without a mortgage (Table G). Central counties in MSAs with population over a 1 million have 32.1% of owner-occupied housing units without a mortgage compared 37.2% for Central counties in populations between 250,000 and 999,999 and 41.5% for Central counties in populations less than 250,000. Over half of owner-occupied units (50.8%) in Outlying counties within the smallest MSAs are without a mortgage reflecting an older population.
The percent of occupied housing units with family households versus non-family households varies by type of county within the MSAs. At 70.8%, the highest percentage of family households in occupied units, are in Outlying counties within MSAs of a population 1 million and over. The percentage of family households ranges between 61% and 69% in all other counties types (Table H). In all counties within MSAs both big and small, married couple households are the majority type of family household – most above 73%. The larger MSAS, Core counties have the fewest married-couples in family households at 69% (Table I).
November 14,
2019 by HFBusiness Staff in Business Strategy, Industry
The explosive ecommerce growth comes in spite of a report indicating only 14% of consumers actually prefer to purchase furniture online (Euclid Analytics). This leaves brick and mortar retailers scratching their heads trying to determine how to give consumers the shopping experience they apparently prefer.
Despite predictions that the rate of ecommerce growth in the furniture industry would slow, ecommerce sales have continued at over 20% annually in recent years. This article updates Statistically Speaking’s June 2018 article Ecommerce Strengthens Foothold on Furniture Industry.
The retail furniture industry reached $112.8 billion last year, a growth of 7.0% over 2018 (Figure 1). While total furniture and bedding retail sales have maintained robust growth through 2018, 2019 year-to-date has slowed – only increasing 3.6% from 2018 Q3 YTD to 2019 Q2 YTD.
Ecommerce Total U.S.
Internet sales of all consumer products from all retail outlet types, ecommerce companies or brick and mortar stores selling from internet websites, are estimated to have reached $524 billion in 2018 (Table A).
In 2018, overall online/ecommerce retail purchases for all consumer products slowed, but still grew 3.6 times faster than all other retail channels. At $269 billion year-to-date, ecommerce growth is 5.9 times faster than the first half of 2018. Total retail sales increased by 5% from 2017 to 2018, compared to 14% for ecommerce.
A recent report published by the Census Bureau segments sales by ecommerce retailers by merchandise lines through 2017 giving a glimpse at penetration by product category.
Among different types of ecommerce retailers, online sales of furniture and home furnishings products was the second highest product category in sales at $48.7 billion increasing 22.3% from 2016 to 2017 (Figure 2). Ranking number one in sales growth, computer software including video games, grew by 23.9% to reach $15.4 billion in 2017. At $66.7 billion, clothing and clothing accessories had the highest sales among ecommerce retailers and with an annual increase of 11%.
Sales of combined furniture and home furnishings through ecommerce retailers have increased from $7.9 billion in 2006 to an estimated $59.7 billion in 2018 – an average per year growth since 2009 of 23% (Table B).
While internet purchases have continued to gain a bigger piece of the retail pie over recent years, online sales represented only 8.6% of all retail sales for all consumer products in 2018 (Table C). And mid year-todate that percentage has declined slightly – down to 7.5% with mail orders picking up to 4.4%.
Brick and mortar retailers have tried various approaches to competing with ecommerce retailers by attempting to market through their own websites, but with little success. Furniture and home furnishings stores lag behind other retailer types in terms of ecommerce sales as a percent of total sales (Table D). Ecommerce sales were 1.2% of total sales in 2017 for brick and mortar furniture and home furnishings stores, compared to 3.8% for clothing stores, 2.9% for sporting goods, hobby, and book stores, and 2.1% for electronics and appliance stores. While the success of online retailing among brick and mortar merchants has increased over the years, the ecommerce sales comparison remains vast between brick and mortar stores and pure ecommerce retailers.
Furniture Industry Channel Growth Of the $112.8 billion furniture industry, sales can be distributed between (1) brick and mortar stores, (2) ecommerce retailers plus ecommerce sales by brick and mortar companies, and (3) mail order houses. In 2018, furniture and bedding sales by brick and mortar stores (non-internet) totaled $87 billion compared to $23.09 billion for ecommerce and $1.9 billion from mail order houses (Table E). As shown in Table F, ecommerce continues to gain a greater share of the furniture industry – jumping from 3.8% of sales in 2009 to 21.2% in 2018. This includes not just sales by ecommerce retailers, but also online sales by brick and mortar retailers of all types – including furniture and home furnishings stores, department stores, warehouse superstores, etc. Meanwhile, brick and mortar share of total sales fell from 93.5% in 2009 to 77.1% in 2018 — decreasing 6.6 percentage points from 2017 to 2018.
The total furniture and bedding industry grew 7% last year. It is estimated that brick and mortar store sales of furniture grew only 3.2% while ecommerce retailer sales grew 25.7 (Figure 3). Over the course of nine years since the bottom of the recession in 2009 furniture sales through ecommerce have grown at an annual rate (CAGR) of 27% compared to brick and mortar retailers at 3.0%. Total industry sales have grown at an annual rate of 5.1%.
Table G shows the annual year-over-year growth of the three outlet types. Note that the rate of ecommerce sales growth peaked at 31.2% in 2015, but has slowed slightly to an estimated growth of 25.7% in 2018.
Home furnishings products – floor coverings, window treatments and home accessories – have shown consistently higher online sales than furniture as consumers are still finding it easier and less daunting to buy home furnishings online without seeing or touching them in a store. However overall growth of furniture products sold via ecommerce has been higher than home furnishings. Table H shows that home furnishing ecommerce sales have grown from $6.5 billion in 2009 up to an estimated $37.4 billion in 2018 – a jump of 477%. During the same time period, furniture ecommerce sales rose 761% from $2.8 billion to $23.9 billion.
Furniture retailers, who have historically enjoyed high margins, claim that although ecommerce home furnishings companies are taking business from brick and mortar stores, many ecommerce retailers have yet to make a profit. And there is some truth to that. For example, ecommerce home furnishings giant Wayfair, sold almost $7 billion in 2018 across five branded furniture and home furnishings websites. But gross profit of $1.5 billion was offset by $2 billion in operating costs. Much of that operating cost has been spent on acquiring new customers and repeat purchasers, which they hope will pay off in the long run. Wayfair also opened its first retail store in Natick, MA and an outlet in Florence, KY.
Perhaps the primary obstacle brick and mortar stores face with ecommerce retailers is the consumer’s online exposure to a vast selection of thousands of furniture items and efficient websites to drill down to exactly what they want. This, coupled with easy checkout, fast delivery and liberal return policies, are challenges traditional retailers have yet to fully formulate a strategic response.
October 15,
2019 by HFBusiness Staff in Business Strategy, Industry
This month’s Statistically Speaking highlights the effects the current 25% tariffs have had on many furniture imports, using data from the U.S. International Trade in Goods and Services Report and the Bureau of Labor Statistics. For the consumer, trade wars elevate concerns about increases in furniture prices. Before this year, the Consumer Price Index for furniture fell gradually since 2012 from an average of 120.3 to 111.1 last year (1982 base year = 100). At press time, available data through August showed that furniture prices appeared to make a significant move upward in July facing the threat of increased tariffs then eased back in August as the international dance between the U.S. and China continued. The CPI for furniture climbed to 115.2 in July, then fell to 113.9 in August (Table A).
Prior to the Great Recession, U.S. imports peaked in 2007 at $41 billion for the broad import category that includes furniture (Table B). Since bottoming out at $30.1 billion in 2009, imports have grown to $67.1 billion in 2018 – a jump of 123%. However, in the first half of 2019, furniture and bedding imports are tracking to be lower this year. For the first and second quarter of 2019, imports were $31 billion compared to $32.4 billion in the first half of 2018. As shown in Table C, tariffs have historically hovered around 1.1% of furniture imports until 2018 when they increased to 2.3%. Since the first half of 2018, tariffs as a percent of furniture category imports climbed to 3.5% by the end of 2018 and up further to 5.7% in the second quarter of 2019.
Imports declined in the first half of this year compared to the same period last year for the first time since 2008 – falling 4.3% (Table D). Import growth had tapered down somewhat post-recovery from the recession before the dramatic drop this year. The first major increase in import tariffs began in 2018 – increasing from $660 million in 2017 to $1.5 billion in 2018. The big jump in tariff growth occurred between the first half of last year ($311 million) and the second half of this year ($1.8 billion) – a jump of 465.9%.
In 2018 the U.S. imported $67.1 billion in furniture and bedding goods and parts worldwide. Over half of those imports are from China, $34.8 billion in 2018, with Mexico, Vietnam and Canada trailing in the distance (Figure 1). Worldwide imports are on track to decrease in 2019 with imports from China taking the biggest hit. As of this year’s second quarter, imports from China are $14.3 billion compared to last year’s second quarter total of $16.5 billion. While imports from China decline, many companies are turning to Vietnam and Canada as alternate resources. Imports from Vietnam have increased from $2.3 billion in the first half of 2018 to $3 billion in the first half of 2019, while Canadian imports increased from $2.4 billion to $2.6 billion over the same period. Mexico import growth has stayed relatively flat.
As shown in Figure 2, the U.S. has mainly imported from China, followed by Mexico. Total Chinese tariff dollars for the first half of the year total $1.7 billion with trade agreements protecting many other countries, including Mexico who paid only $6.8 million.
Tariffs as a percentage of Chinese imports were consistently below 2% before reaching 4.2% in 2018. Beginning at 1.6% in the first half of 2018, tariffs on China’s good increased to 6.4% by the end of last year and by the second quarter of this year has reached 12% (Table E).
As shown in Figure 3, China has fallen from over 50% of total world imports in 2017 and 2018 to 46% in the first half of this year. Alongside China’s downturn in percentage of total imports, Mexico, Vietnam, and Canada have all increased their share of total world imports.
Import Sales by Product Type
Among the different types in the broad furniture import category, import sales of Household Furniture is highest at $48.4 billion in 2018, followed by Lamps and Lighting at $12 billion and Office Furniture at $2.6 billion (Table F). Import sales of Household Furniture slipped from the first half of 2018 to the first half of 2019 – dropping 5% and Lamps and Lighting decreased by 8.7%. Office Furniture import sales increased by 10% during the same time period. Household Furniture has consistently represented around 72% of the broad import category since 2002 (Table G). Lamps and Lighting have fallen in recent years— ending the first half of this year at 15.9%, while Office Furniture has gained a slightly larger share of 4.4%.
September 3,
2019 by HFBusiness Staff in Business Strategy, Industry
This month’s Statistically Speaking studies a March 2019 report from the U.S. Census Bureau’s Statistics of U.S. Business. Although data collected ends in 2016, the report shines the light on challenges furniture and home furnishings stores have faced over the last 10+ years and continue to face going forward.
As shown in Table A, the disparity between furniture store openings and closings was the highest from 2007 to 2012. The ratio of furniture store closings as a percent of total stores averaged 11% in the five years during and immediately following the recession. Despite a boom of store openings from 2011 to 2012, the ratio of furniture store openings averaged only 8.3% in the same five years. From 2012 to 2016, the net change in stores has stayed relatively flat – never showing a positive net change for furniture store openings.
The disparity between store openings and closings has reached even wider for home furnishings stores – closing an average of 11.6% of stores per year from 2007 to 2012 and only opening a yearly average of 6.5% (Table B). Since 2012, the number of store closings has exceeded openings with the net change a negative 1.4%.
The heaviest decline in both furniture and home furnishings stores occurred between 2007 and 2012 (Table C). Furniture store locations dropped 18.8% during that period from 27,386 stores to 22,201. Meanwhile home furnishings stores fell 22.5% from 33,787 stores in 2007 to 26,184 in 2012. Furniture stores declined another 0.9% from 2012 to 2016, while home furnishings stores lost 5.3% more stores. Overall, from 2007 to 2016, the number of furniture store locations decreased by 19.6% and 26.5% for home furnishings stores.
Partnered with store closings is loss of store employees. For both furniture and home furnishings stores, the largest decline in the number of employees occurred in 2009 – a drop of 13.1% and 17.9%, respectively. Decreasing the number of employees steadily from 2007 to 2012, employees in furniture stores diminished by 28.4%, while home furnishings stores cut employees by 29.8%. Both furniture and home furnishings stores had employee growth from 2012 to 2016 as furniture stores increased employees by 7.9% and home furnishings stores by 5.7% (Table D). And though employment continues to slowly increase, it is still well below 2007 levels, 20% less than for furniture stores and almost 24% less for home furnishings stores.
Although hit hard by the Great Recession, furniture and home furnishings stores had a surge in new store openings from 2011 to 2012 (Table E). New furniture store openings jumped by 64.6%, while new home furnishings store openings increased by 20.9%. Unfortunately, as shown in Table F, 2012 also had the highest number of new furniture and home furnishings store clos-ings – new stores dropping by 75.6% and 33.8% respectively.
Between 2007 and 2011, the rate of loss of store employees was higher than the decline in store locations as shown in Figure 1. In 2007 furniture stores averaged 9.9 employees per store and home furnishings stores 9.6. By 2011 this ratio had fallen over a full person per store. There are many reasons for the decline in store employees and the fact that the number has not yet entirely recovered. During the recession the decline in sales was the driving force for employee losses. But since that time, especially for furniture stores, many stores have downsized store size and outsourced functions, especially warehouse and delivery. Of equal importance is the loss of store traffic. According to studies by Impact Consulting Services, the parent of Home Furnishings Business, where once a customer shopped several brick and mortar stores, online research prior to entering a store has helped reduce the average number of stores shopped per purchase to two.
As shown in Table G, small independent stores with under 10 employees make up the greatest share of total furniture stores in the U.S., roughly 44% in 2016. That share has diminished since 2006 – falling 5.7 percentage points from 49.7%. The largest furniture stores (corporate) with the highest number of employees (500+) grew their share of furniture store locations from 18.1% to 27.4% in nine years – a jump of 9.3 percentage points. Overall furniture retailers with less than 100 employees all lost share to larger corporate furniture stores.
The majority of furniture store employees (52.4%) worked in stores owned by corporations with more than 100 employees in 2016 and 41.3% of those were employed in furniture stores with 500+ employees. The largest retailers (500+) were the only employee range to gain a greater percentage share 2017 to 2016 – increasing by 9.5 percentage points. The shifts in store percentage and employee size were not as great for home furnishings stores (Table H). While home furnishings stores with 500+ employees did increase as a percent of total stores by 1.9%, stores with under 10 employees remained just under 60% of total home furnishings stores. Home furnishings stores with the most employees were also the only employee range to gain in size – increasing 4.2 percentage points to 55.7% in 2016.
Although the shakeout continues, the stores left standing (existing stores) are showing signs of some stabilization. Tables I and J track employment growth for a full year comparing 2007 to 2016. Progress is tracked in terms of whether existing stores grew employment, lost workers, had stable employment, or closed their doors by yearend. There are two important positive outcomes from this comparison. First, the number of stores increasing employees or with stable employment increased from 54.7% of the total existing stores at the beginning of 2007 to 70.9% by 2016. Also, the percent of existing stores that closed was almost cut in half in 2016 versus 2007, 6.6% closed (2016) compared to 12.8% (2007) (Table I).
The percentage of existing home furnishings stores that closed by year-end has decreased from 11.5% in 2007 to 7.7% in 2016 (Table J). While the percent of existing home furnishings stores open at year-end decreasing in employee size has fallen 5.2 points to 25.6% in 2016, the percent of existing stores open at year-end increasing in employee size has grown slightly by 0.6 points to 24.8%.
The percentage of existing home furnishings stores that closed by year-end has decreased from 11.5% in 2007 to 7.7% in 2016 (Table J). While the percent of existing home furnishings stores open at year-end decreasing in employee size has fallen 5.2 points to 25.6% in 2016, the percent of existing stores open at year-end increasing in employee size has grown slightly by 0.6 points to 24.8%.
Big-name store closings, like Mattress Firm, make the headlines, but the stark reality of the furniture industry is in the smaller headlines in hometown newspapers. These are seasoned retailers closing after decades of successful operation. Here are a few excerpts from local stories in 2017 that gave us pause. We selected a cross section from around the country: n Dearden’s, serving Southern California shoppers for 108 years, closing all eight of its stores n Montclair will bid farewell to one of its oldest-running businesses when Hampton House Furniture closes (NJ)
- All six Rothman Furniture stores closing – serving St. Louis homes since 1927
- Louis Shanks cites ‘dramatic’ retail shift in departure from Houston
- After 112 years in business, doors closed for the final time at Lee’s Furniture in Montrose (PA)
- Gray’s Furniture closing doors after 57 years on Broad Street (Selma, AL)