Published on August 28, 2014, by Olivia Leroux in http://www.franchise-magazine.com
Already down on 2012 and 2013, the French furniture market lost a further 2.5%, in the first half of 2014. Manufacturers and distributors in the sector are calling for the rapid implementation of support measures by the government.
In the first half of 2014, furniture sales in France fell by a further 2.5% in value and evolving surface areas (and by 4.5 to 5% on a like-for-like basis). A "very difficult" situation, commented Didier Baumgarten, president of the French furniture and home equipment trade federation (FNAEM). The market is expected to end the year down by 3% or even 4%, as it did in 2013, when it barely reached 9.27 billion euros, i.e. below its 1990 level!
"As Didier Baumgarten reminds us,"Furniture is a durable and deferrable good, and is often the one that suffers from household trade-offs. With the crisis, it has frankly fallen into "the trough of the wave", he added. This has taken its toll on Fnaem members (38 chains, representing 2,700 outlets and 80% market share), who are said to have lost around "5% of their stores" since last year. When it hasn't pushed them to the edge of the precipice, as in the case of the Mobilier Européen group, which has been forced to sell off the stocks of some of the outlets in its emblematic Fly network in order to bail itself out, pending a possible buyer.
As in 2012 and 2013, bedding is holding up best, thanks in particular to an improvement in the French mattress renewal rate. But there's a downside, pointed out by Christophe Gazel, Managing Director of IPEA (Institut de prospective et d'études de l'ameublement). Its growth is achieved "at the cost of extremely aggressive promotion, with permanent discount rates of 30 to 40%", not likely to add value to the market. In the franchising sector, Maison de la Literie, the market leader, is pursuing its development with relative serenity.
The kitchen floats, the furniture dives
The bathroom remains in the background, even if, notes the observer, it is "gradually returning to the shelves of retailers" who had neglected it for a while. Benches and sofas are holding their own. On the other hand, furnishings (dressers, wardrobes, etc.) are taking a nosedive. Kitchens, also penalized by the sharp drop in new housing starts, fared better, however, coming in just below the waterline.
"There are still a few reasons for hope," notes Didier Baumgarten. He points to the "slight upturn in French furniture exports (+2%)" in 2013. " This is the result, in particular, of increased efforts by French manufacturers to seek out new markets, and by distributors to support them in doing so". Conforama in Europe, Ligne Roset in the United States, Roche-Bobois in Colombia, Gautier in Qatar or Mongolia: the major networks, which no longer hesitate to see far ahead, are leading the way.
This morning, the weakened furniture industry announced that it was calling on the government to implement several concrete and rapid support measures. "Following the example of what has been done with good results in Italy since 2013, we are calling for the introduction of a tax reduction for the purchase of new furniture. As well as the temporary authorization to break one's Plan Epargne Logement (PEL) to make these purchases", says the president of the Fnaem in the direction of Bercy.
