German furniture makers see strong 2007
By Brian Carroll -- Furniture Today, January 28, 2007
Cologne, Germany — With refreshing confidence, German furniture manufacturers are expecting strong growth in 2007 after what was a robust 2006.
Despite the euro's strength against the dollar, which could hold down export sales, Europe's biggest economy is poised to further build on a dramatic expansion that began in earnest in early 2005.
That confidence shone through at this month's International Furniture Fair Cologne, Europe's largest home furnishings market.
German upholstered furniture specialist W. Schillig, for example, saw business grow nearly a quarter in 2006 and expects a "solid" 2007, according to David Stewart, national sales manager. The company's U.S. business, meanwhile, is "stable" but the exchange rate has slowed growth in that market, he said.
Another German upholstery specialist, Walter Knoll, celebrated what it called the most successful year in its history by recording a 14% sales increase, which included 18% growth in domestic demand. Sales across all divisions totaled 57 million euros (approximately $76 million) last year, extending a 12-year growth trend that has yielded a six-fold sales increase, according to the company.
Wall and wardrobe system specialist Interlubke finished 2006 "with a very positive result," according to Claudia Hielscher, a marketing specialist with the company, a characterization that applied to both domestic and export business. Asia was a particularly good market for the manufacturer.
The goal for 2007 is "moderate growth," Hielscher said.
German giant Hulsta reported a sales increase of nearly 9% last year to reach 297 million euros (about $395 million). The full-line furniture major is forecasting a "substantial" sales increase in 2007, according to the company, counting on a new kitchen equipment division for some of that growth.
The German furniture industry as a whole grew sales by 5% last year, according to IFF Cologne, a performance that pushed the industry to 18 billion euros ($24 billion). Germans spend about $500 on furniture per year per capita.
Germany's economy, meanwhile, is anticipated to grow by nearly 2% this year, according to the German Economic Forecast, published annually by the Munich-based Ifa Institute for Economic Research. German exports, including furniture, are expected to jump 10.5%, which would be the highest since 2000. Lower unemployment and high consumer confidence are combining to offset the strong euro's influence.
Strong earnings are allowing German manufacturers to invest in their factories and equipment. Walter Knoll, for example, plowed profits into building a new multi-functional company headquarters in Herrenberg, a $13.3 million investment.
Rolf Benz will continue to devote a "significant" percentage of profits to research and development, according to Juergen Hopf, who directs Rolf Benz's press office.
"The German economy is good and the French market is very good," Hopf said. "Italy is disappointing."
Ready-to-assemble furniture should enjoy a particularly robust year, according to analyst company BBE-Unternehmensberatung in Cologne, in part because of the growth in the diversity of distribution channels for this category. Specialty shops and centers, mail-order companies and home improvement centers all are expected to increase their demand for flat-pack furniture, according to the firm.
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