Ashley leads Top 25 furniture sources
By Jay McIntosh -- Furniture Today, June 5, 2006
High Point — Led by the new No. 1, Ashley Furniture Inds., the Top 25 furniture sources for the U.S. market turned in a respectable 5.2% sales growth as a group last year.
But take Ashley out of the picture and the performance looks quite a bit weaker. Ashley alone accounted for more than three-quarters of the growth among the Top 25 manufacturers and importers. Excluding the company's results in both 2005 and 2004, the remaining 24 companies had an aggregate 1.2% growth.
That reflects a year of mixed results for the industry heavyweights. Fifteen posted sales gains in 2005 and nine had declines, with one flat.
In part, the results reflect a retail sales climate that was uneven at best. U.S. consumer spending on furniture and bedding rose 3.9% last year, and some high-profile retail failures and downsizing in the past two years — at companies including Breuners Home Furnishings Corp., Rhodes, Levitz and Kronheims — left manufacturers and importers working to replace lost distribution.
Ashley, which was the second-largest source in 2004, surged to the top of the list in 2005 with growth of 26.7% or $544.3 million, giving it a U.S. wholesale sales total of nearly $2.6 billion.
Much of the growth has come through the rapid spread of Ashley Furniture HomeStores, whose sales grew 73.2% last year to nearly $1.6 billion (see the Top 100 U.S. Furniture Stores report in next week's issue for more details). Sales in other channels also continued to grow, with the company introducing a separate Signatures line for non-dedicated stores.
Meanwhile, Ashley's two largest rivals had slight sales declines last year.
Former No. 1 Furniture Brands International said weakness at its midpriced brands led to its 2.5% sales dip. In part, this resulted from a decline in domestic case goods shipments as the company shut down more Broyhill and Thomasville wood plants and increased its offshore sourcing. Furniture Brands said its higher-end companies, Henredon, Drexel Heritage and Maitland-Smith, had revenue increases last year.
La-Z-Boy, the third-largest source, saw its sales decline 1.3% for the 12 months ended Jan. 28. It cited a weak retail environment and declines in business with rental stores and liquidating regional chains, plus the polyurethane shortage last year that affected shipments from October through December.
Sauder Woodworking, the sales leader in ready-to-assemble furniture and a growing player in assembled case goods, grew its U.S. sales by 5.3% last year to $695 million, partly because of its acquisition in July of importer Royal Patina through Sauder's Progressive Furniture case goods division. The company's RTA lines also had a healthy year, said CEO Kevin Sauder.
"I think we did take some market share this past year and also in the first quarter of this year," he said.
He added that key products are selling well, including the Christopher Lowell line at Office Depot and two groups at Wal-Mart.
The company also sold a non-furniture business, packaging producer Archbold Container Corp., last year to concentrate its resources on its main business, said Sauder.
Sauder Woodworking moves up one spot in the Top 25 this year to fifth, mainly because of a change in Furniture/Today's calculation of the Ethan Allen ranking. This year, the ranking excludes the retail markup at company-owned stores, as well as sales of accessories and exported products, giving Ethan Allen U.S. wholesale furniture sales of $584.9 million.
Ethan Allen's wholesale sales gain for the 12 months ended Dec. 31 was 4.3%, although the company said it was posting better comparisons in the second half as it grew more efficient at filling orders from both its U.S. plants and its offshore sources, reducing lead times.
Posting the second-largest percentage gain among the Top 25 last year was Standard Furniture, also known as Kathy Ireland Home by Standard, whose sales rose 13.8% to $272 million and pushed the company up four spots in the ranking to 17th.
Todd Evans, vice president of sales and marketing, said two big initiatives helped last year. The company instituted lean manufacturing practices in its U.S. plants, improving its stock turns, and also largely shifted bedroom furniture sourcing away from China because of the new U.S. antidumping duties.
"We did a lot of re-sourcing. Vietnam was a huge, huge, success for us in '05," said Evans.
He added that the Kathy Ireland brand continued to help with sales, giving the company brand recognition with consumers.
Importer Lacquer Craft, through its Universal and Legacy Classic brands, also had a banner year with growth of 12.5% to $410.2 million in U.S. sales, excluding OEM business. Lacquer Craft, which went public on the Hong Kong stock market last year through its parent company Samson Holdings, announced last month it had acquired a third U.S. brand, North Carolina-based upholstery producer Craftmaster.
Bassett Furniture also recorded a double-digit gain last year, with sales rising 11.2% to $319.2 million in the fiscal year ended Nov. 26. Much of the growth has been with business through the growing chain of dedicated Bassett Furniture Direct stores, which the manufacturer said accounted for 68% of its sales last year.
Two companies posted double-digit declines in 2005.
Ready-to-assemble producer O'Sullivan Inds., which filed for Chapter 11 bankruptcy protection in October, saw its sales decline 16.4% to $233.6 million. The company emerged from Chapter 11 last month with new financing.
Italian upholstery giant Natuzzi said its U.S. sales declined 10.5% to $265.9 million. The decline was in line with a worldwide weakness in business, with unit sales and average price both down from 2004.
One company that had been on past years' Top 25 rankings but is not ranked this year is casual and outdoor specialist Brown Jordan International. It has been determined that the bulk of the company's products are not comparable with those of others on the list, which all primarily make indoor furniture.
