Furniture Industry Set for Post-Recession Growth, Says CIT Study
June 28, 2013,
CIT Survey: High Hopes for Holiday Sales
NEW YORK-The furniture industry will experience a "lift" in sales as pent-up demand from the Great Recession drives consumer demand, according to a study on the industry from CIT's trade and finance group.
The study, profiled in CIT's video titled "Furniture Moves Forward: Sector Sees Post-Recession Growth," said the recession actually provided some fuel to the industry, in particular the casual- and outdoor-furniture segments. These sectors benefited from people spending more money on their homes as opposed to vacations, according to Michael Hudgens, CIT's southeast regional manager of trade finance. "In 2012, the furniture industry grew almost double the rate of the overall economy," Hudgens said. "We think that was due to pent-up demand."
The study also asserted that this demand will lead to a continued surge in furniture sales. The industry, however, does face some challenges going forward, including determining where sales will come from and adopting e-commerce strategies. Another problem is serving the 25-35-year-old group, which doesn't want their parents' furniture and is beginning to shop for their own, according to the study.
The industry also faces issues, the top three of which, the study said, are rising costs, the consolidation of the customer base and securing financing. Labor is scarce and expensive, Hudgens noted, and retailers have consolidated, thus transforming themselves from independent stores to chains and big-box stores. In addition, the recession created a situation in which furniture companies had difficulty obtaining financing from banks, which backed away with the collapse of the housing market and the resulting downturn in furniture sales.