Furniture news: January 2009 | The Furnishing Report

JANUARY 2009
NEWS ROUNDUP

Cussins led consortium buys Sofa Workshop

30th January | upholstery | Sofa Workshop is back in the hands of Andrew Cussins, the man who founded the firm back in 1985. 10 stores and 50 jobs have been saved. The stores, as the Furnishing Report predicted earlier this week, include four in London and six others. The remaining 20 stores will close.

The stores to be retained are those in Bath, Bristol, Exeter, Guildford, Kingston, and Tunbridge Wells as well as the Battersea, Chiswick, King’s Road and Tottenham Court Road stores in London..........more

DeCoro deputy hints at manufacturing return for firm’s founder

30th January | upholstery | The executive vice president of defunct upholstery manufacturer DeCoro has said that the firm’s founder is mulling over plans to open a new factory in the near future. It is not known if the plant would be in China, where DeCoro's manufacturing facilities were located.............more

Ethan Allen profits slump as sales fall by more than a quarter

30th January | international | Ethan Allen, the US furniture firm with plans to enter the European market, has seen profits fall 73% in the three months to December 31st as softening demand resulted in a 27% drop in sales. The firm, which both manufactures and retails, recorded second quarter sales of $189.6m – down from $259.5m in the same period the year before, and profits of $5.5m, which compares to $20.6m in the second quarter of its financial year in 2007...........more

Cussins' Sofa Workshop link grows stronger

29th January | upholstery | The future of failed retail chain Sofa Workshop could become clearer within the next 24 hours with the firm’s founder Andrew Cussins thought to be close to a deal that would see him regain control of at least part of the business he sold to MFI back in 2002.

It is believed he is interested in the retailer’s London stores and up to half a dozen others. Andrew Cussins was widely reported to have tried unsuccessfully to buy the retail chain three years ago when MFI sold it on to New Heights. Both MFI and New Heights have subsequently collapsed.

Beale reduces furniture supply base as it looks to maintain margin amid falling sales

29th January | retail | Department store group Beale will work with fewer furniture suppliers as it bids to maintain margin and reduce costs. The firm recorded a 18.5% fall in turnover to £47.9m and a 7.8% drop in like for like sales in the year to 1st November 2008.

Chinese furniture imports continue to rise despite factory closures and consumer downturn

28th January | imports | The closure of furniture factories across China is yet to quell the flow of imports into the UK. In the first 11 months of 2008, EU furniture imports from China climbed 25% year on year, although half of all Chinese manufactured furniture leaving the country is now funded by foreign countries, including many firms in the UK.............more

Local retailers set to lose out as Ikea opening nears

28th January | retail | Ikea’s new Southampton store will devastate local trade, according to a new report by Experian, the research firm. It says nearby Eastleigh will lose out to the tune of £13.7m, while other towns including Winchester and Fareham will lose £10.7m and £4.4m respectively.

The research confirms fears put forward by independent furniture retailers earlier this month when they told the Furnishing Report they were worried about the impact the new £80m store would have on trade. The Southampton Ikea store is expected to produce annual sales of around £50m................more

Norwich independent launches online store after doubling warehouse capacity

27th January | independents | Furniture retailer Hovells has launched it first online store. The £3m Norwich independent says it hopes to learn ‘from the mistakes of others’ and admits it is late to join the online trading arena.

Sofa Workshop in administration but new owner could be in place by next week

24th January | upholstery | Sofa Workshop went into administration on Friday but an offer for the ailing firm is already being evaluated. Corporate recovery firm Leonard Curtis has been on standby for more than two weeks after the 30-store chain filed a notice of intention to appoint an administrator on 8th January.

The identity of the bidder has not been revealed but trade sources have indicated that the firm’s founder Andrew Cussins could be interested in reviving Sofa Workshop’s fortunes.............more

33 Land of Leather stores to start closing down sales

26th January | retail | Land of Leather is to close 33 of its 109 stores after administrator Deloitte admitted defeat in its efforts to find a buyer for the retailer’s entire store portfolio. Staff at the stores in question have been told, and pre-closure liquidation sales will get underway this week. Three of the stores are thought to be in Ireland...........more

Willis & Gambier parent eyes Italian sofa firm Incanto Divani

22nd January | supply | Italian upholstery manufacturer Incanto Divani has emerged as an acquisition target for Chinese furniture giant Samson Holdings - the company that bought Willis & Gambier out of administration late last year.

The Furnishing Report understands from a number of sources in the UK and Italy that talks are ongoing between senior executives of the two firms and it is thought that the Italian company will be a willing seller if Samson can meet its valuation.

New sub-brand for Myer’s as it moves into pocket springs for the first time

22nd January | beds | Open coil bed specialist Myer’s Beds has launched Myer’s Pocket – its first every foray into the pocket spring bed market.

Introduced this week at Interiors Birmingham at the NEC, the eight-bed range features products with a spring count of between 1,000 and 1,400 – and follows retailer demand for pocket springs within the Myer’s range.

Bed firm makes living and dining move

21st January | exhibitions | Lancashire bed manufacturer Sweet Dreams is to move into cabinet furniture for the first time. The firm, which also launched into the upholstery sector at the Manchester Furniture Show in July, used this week’s Interiors Birmingham show to unveil its first ever living and dining room ranges, as it looks to take on the role of full range supplier to furniture retailers.

More than 40 Land of Leather stores could close if buyer is found

20th January | upholstery | Over 40 loss-making Land of Leather stores may close if a buyer agrees a deal to take on the ailing upholstery chain. The retailer, which currently trades from 109 stores, went into administration just over a week ago.

Deloitte, the administrator, has already said that 14 parties have expressed an interest in buying the retailer and that it is unlikely that any suitor would want to take on the entire store portfolio. However, the Furnishing Report understands that the administrator may be prepared to shed more than a third of the firm’s stores in order to close a deal.

The usual array of private equity firms have been named as possible buyers, along with former LoL boss Paul Briant. Though several sources have indicated that Briant is likely to be among the interested parties, it is thought that he is currently out of the country.

British bed firm launches and sets sights on independent retail market

19th January | beds | A new firm offering UK manufactured memory foam mattresses underpinned by an innovative approach to temperature control has been launched today.

The Sleeping Zone Mattress Company, which takes advantage of trademarked Air Flow technology that uses zones within the mattress to effectively regulate heat, is headed by up Morgan McCarthy, who has held senior positions with some of the biggest names in British bed manufacturing over the past two decades.

Nathan launches French inspired line as it looks to grow stockist base

Nathan - Parisienne 19th January | cabinet | Branded furniture firm Nathan has made a bold move to extend its retail customer base with the launch of a French inspired living and dining cabinet range.

Called Parisienne, the 13-piece collection is manufactured in teak, Nathan’s signature timber, but features a significant aesthetic departure from the firm’s core product line.

Andrew Cochrane, md, said, ‘There will be some crossover but we do expect Parisienne to take Nathan into a new kind of retail store. We’ve already beaten our aim of reaching 200 stockists for the core product since we relaunched, but we think that with the new line, we can push that closer towards 300.’

Parisienne is further differentiated from Nathan’s core lines by the production of separate marketing literature, which describes the range as being part of ‘Nathan’s French Quarter.’

Sofa giant succumbs: DeCoro ceases trading and production stops at vast Chinese plants

16th January | upholstery | One of the first companies to put Chinese furniture manufacturing on the world map has ceased trading. Sofa manufacturer DeCoro has been the subject of intense rumour regarding its financial position for nearly a year following the collapse of two of its major US stockists.........full story

Peroda prepares to go into battle with leather sofa range – ‘We’ve got the ammunition,’ says Langford

15th January | supply | Well-known furniture agent David Langford has vowed to bounce back after what he described as his ‘toughest year in the furniture trade.’ Langford’s firm, Peroda Furniture, was stung when its Chinese supplier Eurosofa failed to pay ‘several hundred thousand pounds’ in commission, which Langford admits almost put the Oxfordshire firm out of business.

This was despite Peroda achieving orders totaling £5m at Interiors Birmingham in January last year when it launched the Eurosofa range. Since it ceased its association with the Chinese supplier, Peroda has found a new manufacturer for its designs that launched so successfully in Birmingham last year.

It will reintroduce the collection at Interiors Birmingham next week through a partnership with CDI, a southern Italian manufacturer, with Langford confident it ‘has the ammunition to fight the battle in 2009.’

Furniture and homeware struggles at Argos as like for likes dip

15th January | retail | Furniture and homewares were ‘the most challenging’ categories for Argos as the catalogue retailer returned a 7.8% fall in like for like sales to £1.85bn in the 18 weeks to 3rd January.

The retailer has been hit by the collapse of two its major suppliers into administration, Europa Sofabeds and Meristem Holdings, in the past two months.

Sister firm Homebase fared better, with group chief executive Terry Duddy saying kitchen sales had been positive.

Buyers circle Land of Leather as Sofa Workshop stops taking deposits

14th January | upholstery | The fate of distressed sofa retailers Land of Leather and Sofa Workshop could be settled within the next few days. The Furnishing Report understands a number of interested parties have come forward for Land of Leather although it is thought unlikely that all of its stores would be part of any deal.

Meanwhile, Sofa Workshop’s future remains in the balance, and the 31-store chain is thought to have stopped taking deposits following its decision to file a notice of intention to appoint an administrator last week.

Bensons for Beds LoL concessions continue to trade – Carrahar: ‘We may form new agreement’

13th January | concessions | Bensons for Beds md Bill Carrahar says the retailer intends to continue to trade its 14 stores that operate from within Land of Leather outlets while the upholstery chain is in administration, and that it may look to form a new agreement with its eventual new owners.

‘Dreadful numbers’ as BRC reports worst December on record

13th January | sales | Furniture retailers were among the hardest hit as the British Retail Consortium reported the worst December sales figures in the BRC Retail Sales Monitor’s 14 year history...............more

New chief executive for Habitat

13th January | management | Habitat has appointed Mark Saunders as group chief executive. He was previously vice president for Europe at clothing firm Levi Strauss..............more

Topps Tiles like for like sales fall

13th January | flooring | Christmas like for like sales at Topps Tiles have fallen by nearly 20%, but the flooring chain insists it remains well placed to take advantage of competitor weakness during the consumer downturn..........more

Land of Leather becomes latest casualty as it appoints administrator

12th January | retail | Leather sofa chain Land of Leather is in administration. The appointment of Deloitte as administrators follows the suspension of its London Stock Exchange shares this morning. The firm said in a statement that it was debt free, and that during the past year it had 'vigorously explored every available option to obtain working capital facilities for the business.'

However, it went on to say that it had been unable to secure additional funds due to the exceptionally difficult trading conditions and the lack of liquidity in the banking system. The firm blamed the credit crunch and subsequent consumer downturn for its failure and said that its January sale had been very disappointing. It added that steps had been taken to protect consumer deposits.

Independents prepare to ‘put their tin hats on’ as clock ticks down on Ikea opening

12th January | retail | Swedish home furnishings giant Ikea will this week take in the first furniture deliveries at its new Southampton store, which is due to open a month today. The £80m store, which is the retail giant’s first full scale British outlet in a city location, is expected to draw trade from across the south coast and has left independents fearful for their future...................read more

Sofa Workshop teeters on the brink of administration

9th January | upholstery | Sofa Workshop is on the verge of collapse after it filed a notice of intention to appoint an administrator as a protective measure. The chain was bought by cabinet retailer New Heights in October 2006, but New Heights subsequently went into administration in May last year.

Lifestyle and Furniture Brands agree settlement and inventory phase out

9th January | world | Furniture Brands International has agreed a settlement with Lifestyle Enterprises that will see the latter phase out existing stock with select customers and pay an undisclosed fee to Furniture Brands subsidiary Thomasville.

John Lewis Home sales climb 13.2%

9th January | retail | Department store retailer John Lewis saw a 13.2% in Home sales in the week ended 3rd January compared to the same period last year. The rise, though not as marked as its fashion (34.4%) and home technology (39.7%) categories, showed consumers are still prepared to spend on big ticket goods.

Multi-million pound upholstery business enters administration

7th January | sofabeds | Another of Argos’ furniture suppliers has gone into administration, the Furnishing Report understands. Europa Sofabeds, a large upholstery supplier based in the north east, has appointed the Leeds office of Begbies Traynor as administrator.

Europa’s problems follow the administration late last year of Meristem – a major flatpack cabinet supplier to Argos. Europa is also known to have supplied independent and mail order retailers.

High profile store closures and redundancies mask improved performance in Home sales for M&S

7th January | retail | Home outperformed all other categories at Marks & Spencer in the 13 weeks to 27th December – with sales climbing 1% against the backdrop of falling sales in all other departments. The widely reported store closures and redundancies are not thought to affect the general merchandise retailer’s furniture and homeware activity.

Trading Standards to investigate deadly Polish sofas being sold in the south east of England

6th January | fire | Dangerous upholstery that fails Britain’s stringent fire safety regulations is being sold across London and the south east. The sofas, which originate from Poland and carry false fire safety labels, are made from foam offcuts and PVC. They are being sold to businesses by travellers in Essex, according to an investigation by the Echo - a local newspaper in the county.

Undercover reporters posed as landlords to buy sofas from a man who claimed to be selling a dozen suites a day. The newspaper had the upholstery tested and found the products failed to meet the Furniture and Furnishings (Fire) (Safety) Regulations. It has passed on the results of its investigation to Trading Standards officers in Essex.

An earlier investigation by the same paper revealed similar suites were being sold by a furniture store in Basildon, which was later fined £10,000. It is alleged that the Polish made suites were brought into the UK via trucks and delivered to travellers camps prior to being resold to businesses.

‘Throwaway culture’ blamed as brand specialist retailer prepares to shut up shop

5th January | retail | One of the UK’s oldest family run independent furniture retailers is to close. Third generation Farrington’s Furnishers in Burton-upon-Trent will cease trading when the last of its stock is sold – with the owners lamenting a change in consumer buying habits. Steven Farrington, director, said that customers now preferred to change their furniture more regularly and demand for quality furniture built to last a lifetime was falling.

Furniture demand to fall as report calls economic outlook ‘exceptionally uncertain’

5th January | world | The UK will be one of a host of countries to see a fall in demand for furniture over the course of the next year. That’s the prognosis from the World Furniture Outlook Report 2009 – a study by the well-respected Italian research body CSIL Milano into global furniture trends.

Furniture creditors to benefit as pre-pack administration rules get a makeover

2nd January | legal | Furniture manufacturers and component suppliers who are owed money may be given more advanced notice of their customer’s impending failure under new laws governing the practice of ‘pre-packaging’ administrations.
The new legislation, which came into force yesterday, will make it mandatory that administrators disclose detailed information to creditors before and after a pre-packaged administration. In a pre-pack, a company is typically put into administration and swiftly bought out of it by new owners with reduced liabilities, such as, in the case of retailers, unprofitable stores or retail stock...........more

FLOORING

CF rebrands retailers as members

Carpet Foundation to phase out the use of Registered Specialist name and logo.

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FLOORING

Carpet trade in 25% target

Flooring retailers and manufacturers to unveil action plan for reducing waste sent to landfill.

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LEGALS

Cresta Furniture in administration

The Manchester office of PKF in charge after Preston retailer falls into administration.

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SPECIAL REPORT

The UK's greenest furniture firm?

A report on the changes made to the factory at Westbridge Furniture - Marks & Spencer's chief upholstery supplier.

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BEDS

Growth at £14m bed supplier

Burnley bed manufacturer Sweet Dreams to take on more staff following positive start to year.

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SUPPLY

G-Plan to roll out POS package

Sofa manufacturer to extend new point of sale package after a successful trial at Bristol independent.

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