By Emma Ritch
An increasing number of retailers are vying for a slowing furniture market on the Grand Strand and in Brunswick County, N.C.
While furniture sales across the United States have become the latest casualty of of slowing home sales and rising fuel costs, that problem is multiplied for retailers here who are splitting smaller pieces of a shrinking market.
“It doesn’t seem to be that styles haven’t changed enough to where people aren’t interested in what we have anymore,” said Pete Morgan, owner of Seaside Home Furnishings in Ocean Isle Beach and Calabash, N.C. “We have a lot of people talk about refurnishing the whole room, but they just don’t. People are holding on to their money.”
The furniture market performed well in early 2013, but retailers – especially stores that sell only furniture – have reported declining sales since late summer.
The furniture industry grew rapidly on the Grand Strand as the housing market boomed, but many local retailers say their inventories are growing – causing them to order less from manufacturers and to entice shoppers with major sales.
“The market’s not doing that great,” said Alan Jordan, manager of Carolina Appliance & Furniture in downtown Conway. “It’s the competition. There’s more of it now than there was three years ago. There’s more of us splitting up the pie.”
Morgan agreed: “What’s also hurting business is there’s been an influx of new stores. There are quite a few stores in the Myrtle Beach area now for people to choose from.”
The Myrtle Beach Area Chamber of Commerce saw a 30 percent increase in the past three years in its memberships among furniture sellers.
It now has 11 furniture sellers or dealers, four of which joined last year, said chamber spokeswoman Nicole Aiello.
Soon after the national housing market slowed in 2013, the Grand Strand’s condominium market began to decline.
The first quarter brought a downturn in condominium sales, and single-family home sales first declined in October after months of increasing or flat sales.
“We’ve definitely seen an increase in the furniture business, but as a result of the housing slowdown, furniture sellers may be feeling the pinch,” Aiello said.
“When they’re not buying property, shoppers don’t need to furnish new condos and homes.”
Hard economic times
The chamber also saw visitors spend less money this summer as disposable income dropped because of increasing prices in fuel, housing and insurance, Aiello noted.
When consumers have to cut back, furniture is often the first purchase delayed, said Larry Thomas, business editor of the trade publication Furniture Today.
“People seem to be less willing in general to spend disposable income on furniture. It seems they would rather spend it on travel and electronics – something more exciting,” he said. “Furniture’s a postponable purchase. Even if your sofa’s not in the best shape, it’s easy to live with it for another six months.”
Thomas, who has monitored the industry for 17 years, said the recent downturn is one of the worst he’s seen. Retailers are ordering less furniture from manufacturers because they can’t sell their existing inventories.
“When the economy goes into a nosedive, furniture feels the effects early on,” he said.
Overall retail furniture sales for the first nine months of 2013 were $86.7 billion – an 8.6 percent increase over the same period a year ago, according to the U.S. Commerce Department.
Thomas attributes that increase to more furniture being sold by nontraditional stores such as discounters, Wal-Mart, Kmart, Pier One and Pottery Barn. According to rankings by Furniture Today, Wal-Mart passed Rooms to Go stores three years ago to become the nation’s biggest furniture retailer.
Traditional stores hurting
Retailers that exclusively sell furniture are feeling more of a pinch, Thomas said.
Orders and shipments in 2013 in the industry have decreased 1 percent to date, according to BDO Seidman, an accounting and consulting firm that tracks furniture sellers and manufacturers.
Furniture sales have trailed last year’s levels for the past five months, but sales are now dropping faster: Orders are down 4 percent in July and 7 percent in August, according to the most recent data available.
Carolina Appliance & Furniture, which opened in 1968, is offering sales and improved service to capture the customer dollar, Jordan said. Sales have increased over last year but are falling short of company goals, he said.
At Seaside Home Furnishings, Morgan said the store is selling the same number of items as in a regular year but that customers are spending less on each item. The company is feeling an extra pinch because its coastal-themed furniture caters to the condominium market.
The company’s year was on target until mid-July, when the decline began, he said.
Seaside is 30 percent down for September.
“Last year, we were selling roomfuls and housefuls [of furniture] frequently,” Morgan said. “Instead, this year, they’re limiting themselves to maybe just the mattress instead of the whole bedroom set or the coffee table instead of a whole new living room.”
About 70 percent of furniture factories reported lower orders in August, and 64 percent had lower orders for the year to date, according to BDO.
Quarterly earnings reports by several major players in recent weeks – Stanley Furniture, Bassett Furniture Industries Inc. and Furniture Brands International – have reflected that market slump.
La-Z-Boy Inc. recently lowered its earnings-per-share projection to a range of 1 to 4 cents from the 11 to 15 cents previously forecast.
