The Furniture Industry Faces a Future without Brands

The lack of differentiation has motivated users to start using store names to identify the items which are sold in these stores

 

The furniture industry has its own rules; one of them is that brands are not so relevant to the end customer. When customers arrive at the store or marketing space, it is normal they only check how the item looks, the comfort it offers and its quality. They rarely value brands before choosing a particular piece of furniture.

On the other hand, the latest mega-operations that took place in this fast changing market also confirm this hypothetical future without brands. For example, the Authentic Brands Group bought in 2018 a series of famous furniture brands at very low prices. The latest ones were Vince Camuto and Nine West. But they already had under their control other popular brands such as Thomasville, Broyhill, Drexel and Henredon. For the latest acquisition, they paid $ 38.5 million, the same that they offered at the beginning of this year for Brookstone, a bankrupt firm.

Of course, there are exceptions, but generally the behaviour of customers when arriving at a furniture store is almost always the same: they go beyond brands and look for advantages.

Probably, what motivates this behaviour in people is the fact that the furniture marks are not visible to the naked eye (they cannot be displayed). They only can be found inside drawers, for example, or when lifting cushions. In addition, the leading brands in this industry do not promote too much.

 This lack of differentiation has motivated users to start using store names to identify the items which are sold in stores. In some cases the names of suppliers are also used, as is the case of Ashley to refer to its group of brands, which is formed by several well-recognizable lines of furniture.

 

In the furniture industry, brands have a lack of context

 

Some of the brands acquired by Authentic started their journey in the furniture industry in the 1980s and 1990s. However, originally, most of these organizations were not specialized in this particular sector. Such is the case of Brown Shoes, which finally became Interco, after having bought Broyhill, Ethan Allen and Lane.

Furthermore, the Masco Company which was popular for its plumbing fixtures and for its services for cleaning wastes joined up the furniture industry by acquiring Drexel Heritage and Henredon.

Some of these companies underwent an unprofitable experience, which led them to be integrated into a single organization. In this way, the corporate entity Furniture Brands Inc. (FBI) was created. 

Another corporation who joined the furniture business was Kohler, when they bought Baker Furniture in 1986. This company originally carried out its activity as a plumbing supplier. In 2017, they left this market by selling their property to the Chinese interlocutor Samson.

However, it should be noted that not all was lean years for the brands mentioned above. In this case, we can talk about the FBI, who at its peak they had sales of millions that amounted to more than 100 billion dollars in a year (during a short period of time).

The sales of this entity were gradually decreasing and, as a result, the production processes to China was decentralised. Later, the group was dissolved and some factories continued active but turned out to unprofitable and inefficient, especially when comparing their operations with the gear of a specialized conglomerate. 

To get the FBI off the ground, private capital was invested. But the result was unsatisfactory. The debts increased in the same way that their sales decreased, which meant the total collapse of the group.

This disaster had as a consequence the creation of a new group called the Heritage Home Group (HHG). His goal was to reorganize the processes of the old FBI. However, in spite of the attempts of the new management, the HHG announced their bankruptcy in July last year.

The entity was dismembered in several parts, at which point Authentic came into play and consolidated its reference position.

We emphasize that the acquired companies do not have the same reputation as in their glory years. Broyhill, which was once considered one of the largest suppliers in this market, has been displaced by Ashley and by other import programs carried out by renowned retailers. 

Likewise, Thomasville, Drexel and Henredon also present an unfavourable panorama. Thomasville, who had followed a model of selling in stores being their own or franchises, was never characterized by selling furniture that enjoyed great acceptance and this caused that several customers stopped buying in their stores..

However, Drexel and Henredon continued being among the consumer’s preferred alternatives. In any case, nowadays their sales have decreased considerably; it is believed that they represent a small percentage if we compare what they had in its day.

Was it the error of Authentic to wolf this gang of old industry glories? If you ask an expert they will tell you that Authentic does not do bad business. Is it a long-term bet? It could be.

 

Is the brand important in the furniture industry?

 

For many experts, furniture brands are of vital importance because thanks to them the consumer guarantees a certain quality and continuity. On the other hand, it does not depend only on the criteria of the seller, but you will be purchasing a product that has been tested by other users and from which good references have been obtained in other stores.

Generally, brands are characterized by providing manufacturing and quality standards, which makes products more reliable. In this way, they can also represent other guarantees. Depending on the personal interests of the client, they may prefer such differentiating features like the commitment to sustainability in its manufacturing, etc.

Following this differentiation, there are other factors that dress the brand and which are usually in the hands of third parties, including the seller himself. The assembly, the customer service, the delivery times… This disparity associated with the marketing phase is motivating that, for many people, the most important thing is to work with a trusted store. And if is possible, a company who doesn’t register any bad review about their service in the digital sphere.

In short, the furniture industry faces other more functional and commercial challenges, regardless of the identity of the products that give it life. There have been many cases of brands that have left the industry or have filed for bankruptcy over the past decades, but there are also encouraging experiences. On the other hand, it is very common that people do not look at the brands of their furniture, as they undoubtedly search quality and advantages in their acquisitions.