Ashley again leads Top 25 sources list
By Jay McIntosh -- Furniture Today, May 21, 2007
High Point — Ashley Furniture showed last year it hasn't hit a plateau yet, posting a 14.7% increase in U.S. sales in 2006 to once again lead Furniture/Today's list of the Top 25 furniture sources.
Ashley's U.S. business of just shy of $3 billion increased its lead over second-ranked Furniture Brands International, with U.S. volume of $2.3 billion, a gain of just 1.3% from 2005. La-Z-Boy, in the third spot at $1.5 billion, had a sales decline of 5.9% for the 12 months ended Jan. 27.
Mixed results turned out to be a theme for all the Top 25, not just the big three. Of the companies on this year's list, 11 saw sales grow from 2005 to 2006 while 12 were down and one was flat. Comparable numbers for the previous year weren't available for one newcomer to the list, Home Meridian International, which was created by the merger of SLF (formerly Samuel Lawrence Furniture) and Pulaski.
Ashley's growth rate last year was down from the increases of just over 26% the manufacturer and importer reported in each of the previous two years, but the 14.7% gain was the second best among the Top 25.
A big ingredient in Ashley's success continues to be the progress of Ashley Furniture HomeStores, the dedicated, primarily dealer-owned chain that posted another year of solid growth in 2006, according to Furniture/Today estimates. (For details, see the Top 100 U.S. Furniture Stores report coming in next week's issue.)
The one company topping Ashley's growth rate last year was Lifestyle Furniture Enterprise, the Asian importer whose U.S. shipments grew by 37.7% from 2005, to $357 million. Lifestyle also has a big Canadian customer base, and said its total worldwide shipments amounted to $420 million.
Lifestyle, led by China-based entrepreneur William Hsieh, started 2006 with a bang by conducting its own mini-market at its High Point showroom, flying customers to the North Carolina city and offering hard-to-resist specials on product. Lifestyle had a second mini-market this year.
As a sign of its continued growth, the company announced this February that it plans to build a $10 million, 110,000-square-foot showroom and office building adjacent to its existing Forbidden City showroom in High Point. It is expected to open by October 2009.
Other Top 25 companies with double-digit gains, based on company reports or Furniture/Today estimates, were three companies with strong upholstery offerings, Mississippi-based Franklin at an estimated 13.1%, Iowa's Flexsteel Inds. at 12.7% and Best Home Furnishings of Indiana at 13.1%.
Flexsteel, the largest of the three with U.S. sales of $369.3 million in calendar 2006, owes part of the gain a healthy increase in its contract furniture business. Excluding contract, furniture sales were up about 9%.
"We had a reasonably solid first half of the calendar year, and as we got into the summer, (the residential business) just slowed," said Flexsteel CEO Ron Klosterman.
That was a common refrain, with most companies reporting a weaker second half as retail business slowed. For many, the weakness has carried over into this year.
Among ready-to-assemble specialists, Sauder Woodworking held onto its No. 5 spot on the Top 25 despite a U.S. sales decline of 8.6%, to $635 million. Dorel, whose residential furniture is mainly RTA and futons, saw its U.S. furniture sales decline a similar amount, by 7.9% to $528.3 million.
RTA maker Bush Furniture ran counter to the trend with a 6% gain, to U.S. volume of $309.9 million in 2006.
One longtime Top 25 member that fell off the list was RTA manufacturer O'Sullivan Inds., which suffered an estimated 21.2% decline in U.S. sales to $184 million. The company will soon fade away altogether — Sauder has acquired its intellectual assets and will shift production of certain O'Sullivan products to the Sauder plant. That's likely to keep Sauder on top of the RTA pack.
