Furniture Manufacturing
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Industry Overview
The US furniture manufacturing industry includes about 20,000 companies with about $60 billion in combined annual revenue. Major companies include Steelcase, HNI, Herman Miller, La-Z-Boy, Sealy, and Furniture Brands International. Some segments, such as mattress manufacturing and office furniture manufacturing, are highly concentrated, but the industry as a whole is fragmented: the largest 50 companies generate less than 40 percent of revenue.
The global furniture manufacturing industry generates about $400 billion annually, according to the World Furniture Confederation. Major companies include Natuzzi (Italy), IKEA (Sweden), Samson Holding (China), and Steinhoff International (South Africa). Many of the US furniture manufacturers have international manufacturing operations.
Competitive Landscape
The volume of home furniture sold depends heavily on the level of home sales, while office furniture sales depend on the health of the US economy. The profitability of individual companies is closely linked to volume, since many costs are fixed. Small companies can compete effectively if they produce specialty items or high-quality workmanship that can sell for a premium price.
Imports are a major source of competition. In addition, many US manufacturers have factories overseas, where labor and production costs are lower than in the US.
Products, Operations & Technology
Major product categories include household furniture (about 50 percent of industry revenue), office furniture (about 35 percent), and institutional furniture used in schools, hospitals, and churches (about 10 percent). Within the household segment, wood kitchen cabinets account for about 40 percent of sales; upholstered furniture another 25 percent; and nonupholstered furniture 20 percent. Products include "case goods" (bedroom, living room, and dining room furniture); upholstered items like sofas and recliners; mattresses and box springs; and other items such as occasional furniture, home entertainment centers, and grandfather clocks. Products may be factory-finished or ready-to-assemble (RTA). Within the office segment, wood and non-wood furniture accounts for 45 percent of sales; partitions, showcases, and shelving account for 30 percent; and custom architectural woodwork 25 percent. Companies tend to specialize in household or office and/or institutional furniture.
Large companies operate distribution centers and warehouses as well as retail outlets. Because of the vast number of items, styles, coverings, and finishes, much furniture is made-to-order, with delivery times varying between two weeks and several months.
Raw materials are the biggest cost item, usually around 45 percent of revenue, and include steel, hardwoods, plywood and chipwood, textiles, polyurethane foam, springs, and various glues, paints and finishes.
