Furniture Insights® Newsletter Announces Retirement

January 2, 2024  by HFBusiness Staff in Business Strategy, Industry   

As for this month’s insight’s, from the pen of the publisher, “As we have seen for the last year or two, the monthly results have to have some explanatory comments. New orders, according to our survey, were up 12% in October versus October 2022 but the October 2022 orders were down 30% from October 2021 and were even down in the 2021 to 2020 comparison, as 2020 orders were up 40% over October 2019.”

“As we discuss later in the results below, there are so many factors that go into the results, it is difficult to explain them all. Hopefully, the information allows participants to have some feeling for how your results stack up against the industry and why there are differences for your business.”

“For outsiders, it is just difficult to understand the fluctuations in the past four years. Year to date through October, new orders were up 2%, after a 29% drop the year before.”

“Backlogs actually increased a bit over August but were down 43% from September 2022. It appears that backlogs are getting to something closer to pre-pandemic levels if one can determine how much price increases are included in the numbers. The other stats are at least somewhat in line with expectations as you can see from the full report.”

“Shipments were down 13% from October a year ago and down 18% from the 2022 year-to-date results. As expected, the majority of the participants followed along with the overall results. Shipments in late 2020 and 2021 were bolstered by the huge backlogs that were built in late 2020 and into 2021 but shipments were not always smooth as it related to volumes of shipments, and especially with imported goods, supply chain issues caused havoc for many. So, the consistency of shipments has not been what one would have expected with such huge backlogs.”

“Receivable levels seem to be in line and with a few exceptions, there have not been major losses through retail failures. While there are some concerns out there, most of the major retailers seem to be in pretty good shape.”

 “Inventory levels have come down to be more in line with current business conditions. While there are spots of shortages of employees, most of the employment needs have leveled off, except for certain needs in some skilled positions. The declines in overall positions have seemingly been handled through attrition for the most part.”

“Several of the economic reports appear to be a bit mixed in terms of expectations for 2024. As we have said many times before, the individual factors that make up the economy as a whole do not always move at the same pace. The same goes for the furniture industry, even when just looking at residential furniture.”

“So, while some expectations for certain parts of the industry have struggled, others have held up fairly well in spite of the slower economy in general. We continue to believe that planning for 2024 should remain a bit on the conservative side.”

“The Conference Board still suggests a short and shallow recession in the first half of 2024. We believe that maybe residential furniture may already be there. With 2024 being an election year, much of the normal advertising will be taken over by the political ads. We know that advertising does create consumers desires for new furniture so even if the economy does not go to a “light recession”, we would not expect a robust recovery for the residential furniture industry.”

”But we do believe that 2024 does give us a chance to create a new base level of business for future comparisons as price increases, due to abnormal fluctuations in freight, as well as other material and labor fluctuations, should become more like the normal changes to prices. So, while planning conservatively, we would think that maybe the industry can start to plan for more normal fluctuations in their expectations for business.”

Smith’s executive summary concludes, “Thanks again to all of you who have been so helpful to us and particularly to me. We appreciate your trust in sharing confidential information for us to share on a consolidated basis, as well as other comments, that you have allowed us to share without attribution. I hope to be able to see many of you in the next few markets, just to stay in touch. If I can ever be of any help to any of you, please feel free to reach out. In the meantime, please continue to respond and support Mark in the Firm’s efforts, when he reaches out.”

Click here to read this month’s full report.