Wayfair, La-Z-Boy and other furniture companies report booming demand. But delays persist.
“I have no idea when something will arrive. They said it could be in eight months, “said the 26-year-old property manager. “If I had known, I would have just been waiting to buy furniture.”
Across the country, furniture retailers are reporting months of delays in every step of the supply chain – from overcrowded factories to congested ports – amid rising demand for desks, chairs and couches during a pandemic that left millions of families mostly home for almost a year. Companies say the lack of shipping containers, as well as materials like steel and acrylic, has made it nearly impossible to properly store stores and warehouses.
Meanwhile, the furniture business is booming, fueled by huge leaps in work-from-home arrangements and home sales, making it an unexpected bright spot in the otherwise ailing retail sector. Americans spent an estimated $ 11.3 billion in furniture and home decor stores last month, up 12 percent from last year, according to data from the Department of Commerce. Monthly sales in the industry are up 181 percent since April, while retail sales are up 34 percent overall.
“You have two problems: high demand and a disrupted supply chain,” said Greg Portell, a partner in the consumer and retail practice at consultancy AT Kearney. “All the places where this stuff is made, whether internationally or domestically, have been disrupted by Covid and are under enormous strain.”
La-Z-Boy customers are now waiting for an “unprecedented” five to nine months for their orders, managing director Kurt Darrow said in an earnings call last month, adding that production disruptions and shipping delays have recently increased to $ 30 million for lost deals totaled quarter. The factories are also understaffed because so many production workers are infected with Covid-19 or have to be quarantined after the holidays.
“Individually each of [those hurdles] is not that important and could be overcome, ”said Darrow. “But if they’re coming at you from six or seven different directions, the size adds up.”
La-Z-Boy added weekend and night shifts at its US plants and expanded manufacturing facilities in Mexico. Even so, executives say consumer demand is so high the company can’t make enough sections and other big-ticket items to keep up.
“The demand we are getting … is holding up much further than we’d like,” he said. “But that is the state of the industry. It’s not just a La-Z-Boy problem, it’s for everyone. “
Dan Flickinger, the general manager of Kasala, which has four stores in the Seattle area, said furniture that would normally take three months to arrive from China can now cost more than nine. Orders placed this month won’t come in until December, he said. Even then, there is no guarantee that they won’t languish in port for a few more weeks.
“A lot of our furniture is handcrafted and requires an enormous amount of components, so one missing part can mess up a whole lot of production,” he said. “Our warehouse is so close to the port that we can see the containers fairly well, but we cannot reach them.”
According to analysts, the furniture industry, which imports the majority of its products, is particularly hard hit by the challenges in manufacturing and shipping. According to Mark Yeager, managing director of Redwood Logistics, ocean freight shipping fees from Asia to the US have in some cases quadrupled from around $ 1,500 per container to $ 6,000. In addition, capacities have declined as storage space is used on international flights, which have fallen sharply due to restrictions related to pandemics. And in the United States, weather-related rail disruptions and a shortage of truck drivers have only added to the mess.
Originally, overseas manufacturing was the bottleneck, said Jonathan Johnson, managing director of Overstock.com. “Now it is shipping that is slowing down.” The online retailer’s sales rose 75 percent last year to $ 2.5 billion, driven by demand for patio furniture, trampolines, sofas, carpets, and other home furnishings. “If you look at the Pacific outside of the ports of Los Angeles and Long Beach, it’s like the [Interstate] 405 in rush hour. The shipping lanes are jam-packed. “
Retailers also have to prepare for an era of increased online shopping when it comes to bulky purchases with large tickets such as couches, beds, and dining tables. Many chains are quick to build mobile apps and websites, and add roadside pickup options to suit their ecommerce purchases. At Ikea, for example, online sales now account for 25 percent of all orders, up from 15 percent before the pandemic. The company recently created a new mobile app and added staff to its call centers.
Shops are also increasingly rethinking the layout to make it easier for customers to quickly test sofas or mattresses before committing.
“The customer arrives in stores at a different time in their journey,” said Debbie Propst, President of Herman Miller Retail, which owns the modern high-end furniture chain Design Within Reach. “They used to come at the beginning when they were just starting to look. Now they have all done the research and sit down in a particular chair to see if it is right for them. “
The company quickly redesigned its website at the start of the pandemic, and its newest store, opening this week in Southampton, is an attempt to get closer to the wealthy New Yorkers who moved into their summer homes during the pandemic. A number of Herman Miller seating stores in cities like Austin, Los Angles, and New York were also added to keep up with a 300 percent increase in sales of ergonomic desk chairs.
Retail orders rose 41 percent last quarter, driven by demand for upholstered seating, patio furniture, and home office staples like desks and filing cabinets. Consumers are also increasingly looking for multi-purpose furniture, Propst said. Sectional stools and stools with integrated storage space are just as popular as the recently launched Edel Table from Stamford, Conn., Which starts at 1,800 US dollars and doubles as a dining table and desk.
Many furniture stores say the pandemic sales followed an unpredictable but clear pattern: revenues plummeted in March and April when much of the country was locked down. But in May, when Americans realized they would be stuck at home for the long term, they grabbed desks and patio furniture, then upholstered chairs, couches, dining tables, and just about everything else – and demand has remained high since then.
“It’s been an extreme roller coaster ride,” said Bruce Champeau, president and chief operating officer of Minneapolis-based furniture chain Room & Board. “We went from closing to record sales one at a time.”
Annual sales increased 30 percent year over year to nearly $ 500 million, he said, and expects to break $ 600 million this year. The demand, he said, had evolved as people looked around and said, ‘You know what? Maybe we’ll update our sofa. Maybe we’ll replace this and that. ‘”
After Stephanie Campisi moved from California to Athens, Tennessee, in December, she visited a local mattress store to buy a bed. Everything was sold out and she was told the next shipment would take more than two months.
She ended up going to Walmart and buying a $ 150 foam mattress for her family – including a toddler and a dog – to sleep on while they waited for the moving company to deliver their belongings.
“We were really surprised,” said the 35-year-old children’s author. “We thought you would just go to a store and buy a mattress that is in stock. But the pandemic has changed even the simplest of things. “
Bed sales have skyrocketed during the pandemic, according to retailers and mattress makers like Tempur Sealy International, Casper Sleep and Purple Innovation, who posted annual sales growth of between 20 and 50 percent over the past year.
“When people realized they would be in their homes for a long time, they started looking at the things that frustrated them,” said Stephen Oblak, Wayfair’s chief merchandising officer. “That has resulted in a lot of furniture and textile sales.”
Tasha Belikove, who has been working in her Los Angeles apartment for almost a year, says she is constantly looking for ways to upgrade the two-bedroom apartment she shares with a roommate. So far, she has bought a desk, bed frame, living room rug, and Peloton exercise bike, and is considering buying a dining table and upholstered chairs.
Furniture, she says, was one of the few areas she enjoyed herself in as she saves on Uber trips, restaurants, and travel.
“I definitely looked around my apartment and found that I hate everything,” said the 27-year-old social media coordinator. “When I’m in a pandemic and literally see nothing but the inside of my apartment, I want to spend all my money on new furniture.”