Increased Remodeling Demand During Vacation Season
Government Housing Supply Sparks Rebound Potential
[Asia Economy Reporter Kim Jong-hwa] The furniture industry, which experienced an 'earnings shock' in the first half of the year, is showing expectations for a performance rebound in the second half. Leading indicators such as increased foot traffic and contracts at some offline stores are recovering, and the government's plan to supply 2.7 million housing units is also stimulating optimism about the industry's recovery.
According to the furniture industry on the 22nd, the sector suffered severe performance declines in the first half of the year, including decreased sales and a sharp drop in operating profits. Despite this depressed atmosphere, the industry has not given up hope for a rebound in the third quarter. This is due to signs of recovery in leading indicators such as increased demand for partial remodeling during the vacation season and higher foot traffic and contracts at offline stores.
Recently, there has been a rise in demand for partial remodeling, where only old spaces in the home are renovated during vacation periods. Hanssem announced that the number of partial remodeling consultation requests through Hanssem.com last month increased by about 10% compared to the same month last year. Additionally, last month, the number of consultation customers visiting Hanssem’s offline directly operated store, ‘Hanssem Design Park,’ increased by 12% compared to the previous month, and furniture contract amounts rose by about 10% from the previous month.
The industry views the government's housing supply plan of 2.7 million units, announced on the 16th, as a spark for a mid- to long-term rebound. There is also positive anticipation that raw material prices will soon peak and then decline. The furniture industry is hastening efforts to expand offline stores and provide additional marketing support for key products to attract customers.
Ace Bed is focusing on expanding offline stores, recently opening the premium brand ‘Ace Heritz’ exclusive store at Lotte Dongtan Branch, the first of its kind in Lotte Department Store last week. Shinsegae Casa launched the stay-type mega complex cultural space ‘Casa Grande’ and plans to add 12 more offline stores within the year, aiming for profitability through differentiation and improvements to its online shopping platform.
Hyundai Livart plans to recover profitability by expanding its total interior distribution network and strengthening the lineup of popular overseas premium furniture. Hanssem stated, "We have accumulated valuable experiences never encountered before in the recent market situation," and added, "We will demonstrate our resilience by building a business model that is not affected by external environments."
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