American Furniture Retail Market in 2007 (I)
Friday, June 13th, 2008During the year of 2007, many manufacturers who has been supplying the US market experienced the hardest time ever. A lot of manufacturers in Guang Dong, China have gone bankruptcy. A lot of other manufactures was confronted with insufficient order confirmations.
Many people think that 2006 could be the worst year for the furnishing market. Indeed, we have seen giant furniture retails like Levitz, Rhodes, Gabberts and Kronheims closed their stores. The sofa retailer Klaussner chose to close 23 stores, which have not made any profits for the company in the whole year. Facing a market and economy like this, what should wholesalers and retailers do?
Harlem’s CEO, Bruce Berman stated that depite such a bad timing, if the furniture retailers can focus on their business and make improvements over time, they can still acquire a decent share in the shrinking market. He said that all merchdisers should know exactly what kind of products and services are expected.
One trend in the furniture market is the movement towards e-commerce. More and more retailers have started their own websites, either serves the website as an online catalog or a platform for online orders.
In general, we can divide the US furniture market into 9 categories:
- Bedding
- Master Bedroom
- Youth Bedroom
- Casual Dining
- Formal Dining
- Cocktail table
- Fabric-covered Sofa
- Leather-covered Sofa
- Recliner
Among these 9 categories, we can further divided them into upper, middle and lower level in terms of quality and price.
For beds, the best sellers are beds at prices about $700-$900, making up for approximately 26%. For youth bedrooms, the best sellers are about $300-$400. The situation is slightly different from the dining room market. It seems that American values the dining room set more than bedroom. Therefore, the upper level dining sets are the best sellers. Now you might be wondering what could be the profit margin for US wholesalers. Can they survive in the long term?
Generally, American manufactures adds 40% to the price. Thus, If one set is priced at $100, the price of that set leaving one of the ports in China is about $45.
