Last year, one of the most common problems for casual furniture retailers was an excess of inventory. Many bought their product for 2024 in September, months after the Casual Market, so that they could sell through their in-stock product.
So how did the end of the year play out for them?
We spoke with a few who say they made it through most if not all of their inventory, with a few exceptions here and there. Grant Henegan of Viridien (previously Fire House Casual Living) based in Charlotte, North Carolina, is one of them, and he says they cleared it, but it did mean losing margin, overspending on advertising and being heavily promotional.
“It still has the consequence of further cannibalizing 2024 and ’25 sales,” he says.
Erik Mueller, CEO of Watson’s in Ohio and 2023 chair of the International Casual Furnishings Association board, says he was extremely focused on inventory management for the past 12 months. This got him to a better position, but there’s still some remaining that he’d hoped to sell off sooner.
Eli Hymer, buyer/designer/manager at Gasper Home & Garden in Pennsylvania, is in a similar position, adding that his store was fortunate that their sales were up year over year.
“That being said, we’re starting to feel special orders are picking up again, as we previously were selling mostly stock,” he says. “We have gone into our inventory, but it’s not where we want it to be. We had to buy new products just to stay up-to-date and current, but we still have inventory left over that we hope to get rid of by the end of the upcoming season.”
He explains that ever since the pandemic occurred, the store’s business has become year-round — he even had people come in the day after Christmas. “The pandemic has made people think more long term.”
How else has the industry changed over the past year?
Special orders, which slowed down when inventory was backed up, are now becoming popular again. Hymer says he’s seeing them starting to pick back up, which is good for everyone.
“There’s even more interest in special orders than there has been in the past,” he says. “And manufacturers seem to have an abundance of inventory. Last year, I was approached by so many manufacturers offering me extra incentives just to send special orders in, so that tells me that manufacturers are looking for business right now.”
Mueller — who is also the founder and CEO of manufacturer Plank & Hide — agrees, and says it’s because manufacturers have improved their lead times over the past year.
“And I would expect that to be probably a little better, even in ’24,” he adds. “Because I think all of the manufacturers are in as good of a position going into ’24 as they’ve been in a few years.”
Hymer says he’s very optimistic about the coming year for his store.
“We had a good year last year, and we’ve increased every year even since the pandemic,” he says. “We’re in a very solid market in a very wealthy area and our businesses is a little more recession-proof. I have friends across the country who are in a little more challenging markets and they’re affected by the economy more so than us.”
He also says he’d prefer if business went “back to the way it was before” because it was a more enjoyable way of doing business.
“I was buying 20-30 groups at a time in containers, so I’m looking forward to going back to the way it was where we only had to buy a few at a time,” he says. “I think it will probably be another year or so before we’re back there. But I think that manufacturers and retailers alike all want it to go back.”
Henegan says he has “very low expectations” for 2024 but he hopes to be surprised.
“I see the major retailers like Crate & Barrel, Pottery Barn, Rooms To Go and others grabbing market share from the specialty channel,” Henegan says. “They have affordable lines with good looks appealing to millennial buyers — now the biggest consumer cohort in the United States.”
Meeting them in the middle, Mueller says he’s cautiously optimistic about the new year.
“I think there’s going to be a little bit of an opportunity in ’24,” he says. “I’m looking at the next year and thinking it will be kind of flat, but we’re going to try to be creative and find ways to grow. Stores that got a little cleaner of inventory will probably have a better opportunity this year, because maybe the store is a little fresher or more exciting. If they’re not carrying some of that heavy freight it will put them in a little better position.”
Great Article Alex!