[United States Furniture Industry]

by

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United States Furniture Industry

Introduction

The household furniture industry is a highly fragmented market that generated approximately $23 billion in 2001 from wholesale shipments and $64 billion in retail sales1. The two major segments that make up the household furniture industry include case goods and upholstered furniture. Our focus for research purposes will be limited to case goods, where possible, and will attempt address the wholesale and retail side of the industry. Case goods are defined as any home furnishing product made with wood. These products are typically large items that are shipped by manufactures in case crates (hence the name). Case goods include items such as bedroom sets, kitchen and dining room sets and wall units (e.g., cabinets, dressers, media centers, etc.).

According to the American Furniture Manufacturers Association (AFMA), case goods account for approximately 47% of the total US furniture shipments (in 2001). Wholesale shipments of residential case good products approximated $10.9 billion in 2001. The case goods sector within home furnishings requires a capital intensive manufacturing process due to the customization of products and hand-finishing that is often required. There are a variety of design styles, wood options and price points within the category. The largest consumer group for case goods is the 25 to 44 age segment2. This market segment encompasses the majority of new home buyers as well as individuals interested in replacement old, lowend furniture with higher-end pieces. However, the over 45 segment is also important because of their replacement/remodeling tendencies and their increased disposable income.

Until recently, Canadian manufacturers have taken up the 'low road' economic design, whereby enterprises argue mostly on the foundation of price. Rather than taking up the pattern of high value-added data intensive yield, manufacturers have tended to count on external determinants, especially the U.S., for conceive inspiration. This chronicled flaw in Canadian furniture assembling has left the business susceptible to the expanding power of retailers who use force on manufacturers to lesser profits. This incident, adjacent intensified worldwide affray, currency fluctuations, and tariff declines, has provoked instability in the sector.(Laursen, 2008)

Despite this general conference whereas, we identify the significant design divide up in the Canadian business, with the expanding number of manufacturers beginning to rework the configuration of their yield chains in alignment to assist expanded design. The incident of this assembly of businesses displays that the 'low-road' imagery is probably too unequivocal to apprehend present expansion in the industry. While both low-end and design-oriented manufacturers have been flourishing in exporting to the ...