Furniture Industry with Continued Deficits
Rebounds in Q4 Last Year
Furniture industry performance, which had struggled due to the economic downturn caused by COVID-19 and the real estate market slump, rebounded in the fourth quarter of last year. The furniture industry plans to focus on securing growth drivers this year to continue the upward trend in performance.
Furniture Industry Successfully Rebounds in Q4 2023
According to the fourth-quarter performance estimates compiled by financial information company FnGuide on the 15th, Hanssem recorded sales of 502 billion KRW and an operating profit of 5 billion KRW. The operating profit turned positive compared to the same period last year. Last year's total sales are estimated at 1.968 trillion KRW, with an operating loss of 4 billion KRW.
Hyundai Livart, which began its rebound in the third quarter of last year, continued its growth in the fourth quarter. Fourth-quarter sales and operating profit are estimated at 417 billion KRW and 6 billion KRW, respectively. Compared to the same period last year, sales increased by 3.6%, and operating profit is expected to turn from a 31 billion KRW loss to a profit. Last year's sales are estimated at 1.582 trillion KRW, with an operating profit of 3 billion KRW, marking a return to profitability.
Shinsegae Casa is projected to record sales of 60 billion KRW and an operating loss of 3 billion KRW in the fourth quarter. Although it is expected to fail to escape losses that have continued for six years in 2023, it is analyzed that the company laid the groundwork for a performance rebound by reducing the deficit in the third and fourth quarters of last year. In particular, sofas and beds released at the end of last year recorded contract amounts worth tens of billions of KRW in less than a month.
Consumers Start Opening Their Wallets... Strengthening B2C
The furniture industry has begun to strengthen its focus on the business-to-consumer (B2C) market, which accounts for the largest share of sales, to continue the performance rebound. Hanssem has actively started targeting the children's furniture market. Although the number of children is decreasing due to low birth rates, it is expected that parents will increasingly invest generously in their children. In fact, sales of Hanssem's elementary school furniture line ‘Joy S2’ increased by 44% from the same period last year, from the 15th of last month to the 12th of this month.
Shinsegae Casa reported that sales of dress rooms and storage furniture and accessories from its furniture brand Casamia rose by 21% in the first week of the new year (January 1?7) compared to the previous week. By category, built-in wardrobes and system closets for dress rooms increased by about 10%, storage furniture such as cabinets and drawers rose by 30%, and accessories needed for organization increased by approximately 53%. Shinsegae Casa analyzed that this reflects demand for tidying up homes to welcome the new year.
Each company plans to continuously strengthen competitiveness in the B2C market this year. Hanssem transformed its offline stores into ‘future-oriented experience spaces’ along with a renewal of its online mall. The focus is on changing stores from product and exhibition-centered to experience and interaction-centered. Hyundai Livart aims to establish itself as a premium brand by enhancing the quality, design, and service of furniture targeted at B2C customers. Shinsegae Casa plans to diversify sales by focusing on sofa products and expanding to beds and mattresses, improving inventory management efficiency.
A furniture industry official explained, "Despite the sluggish recovery in housing transaction volumes, we confirmed a rebound in last year's performance," adding, "Consumers are expected to open their wallets more for furniture purchases this year compared to previous years, and with raw material prices stabilizing, profitability is expected to improve."
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