by Betsy Vereckey, AP Business Writer
\nHousing Market Plagues Furniture Makers
\n
\n\t\t
\nNEW YORK (AP) — The slowdown in the housing market is reaching well beyond the nation’s homebuilders — in the past few months, several furniture makers and retailers have cut their forecasts.<\/p>\n
Earlier this month, St. Louis-based Furniture Brands International Inc. forecast a fourth-quarter loss with sales falling in the mid-single digits. Stanley Furniture Co., which cut about 200 jobs this week at a North Carolina-based faciltiy, and Ethan Allen Interiors Inc. have both cut their guidance, blaming overall soft industry conditions.<\/p>\n
The guidance cuts come amid a correction in the economically crucial housing sector, which has cooled off after years of overheated growth. According to the Commerce Department, home construction fell to a six-year low in November, while sales of new homes fell by the steepest rate in three months in October. As new and existing home demand weakens, so does the need to purchase big-ticket household items.<\/p>\n
In a Dec. 7 client note, UBS analyst Margaret Whelan said the industry is in the middle of a cyclical downturn, given a slowdown in housing and higher interest rates. They’re also losing business to overseas manufacturers.<\/p>\n
“We believe the secular shift toward imports will compound the impact of this cycle on U.S. manufacturers’ sales and earnings per share, as price sensitive consumers accelerate demand for imports,” Whelan wrote.<\/p>\n
BB&T Capital Markets analyst Joel K. Havard also said the industry entered the key fall selling season in an inventory-heavy mode.<\/p>\n
“Given the unfolding weakness of the sector, a painful work out was in store,” Havard wrote in a Dec. 8 client note.<\/p>\n
According to the International Council of Shopping Centers, same-store sales in the furniture sector have declined 6.5 percent year-to-date. The same-store sales metric is considered the best measure of a retailer’s health and measures sales at stores open at least one year.<\/p>\n
“Softness from the new and existing home sales market has indeed taken its toll on furniture stores directly,” said Michael P. Niemira, ICSC’s chief economist and director of research. “We’ve been seeing soft demand for awhile. The question is will it moderate more than anything else.”<\/p>\n
Although analysts agree the sector still faces rough patches, they are divided on whether the housing industry slowdown is over, or if it will carry over into 2014. Some analysts say improvement in the housing market is possible, provided lower prices can draw buyers back into the market.<\/p>\n
Several weeks ago, the National Association of Realtors said existing home sales rose 0.5 percent to a seasonally adjusted annual rate of 6.24 million in October, following seven straight months of declines.<\/p>\n
In a Nov. 16 industry note, BB&T Capital Markets analyst Joel K. Havard said that although signs point to a difficult ending in 2013, there are reasons to be optimistic.<\/p>\n
“As the hoped-for holiday season recovery falls flat, we see an increased likelihood of a sector-wide rebalancing through a combination of reduced pricing, more generous trade terms, and restrained production,” Havard wrote.<\/p>\n","protected":false},"excerpt":{"rendered":"
by Betsy Vereckey, AP Business Writer Housing Market Plagues Furniture Makers<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-2908","post","type-post","status-publish","format-standard","hentry","category-furniture-world-news"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts\/2908","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/comments?post=2908"}],"version-history":[{"count":0,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/posts\/2908\/revisions"}],"wp:attachment":[{"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/media?parent=2908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/categories?post=2908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/indonesia-furniture.com\/articles\/wp-json\/wp\/v2\/tags?post=2908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}