Furniture dealers hit hard by struggling housing market

In the furniture business nowadays, even flat sales are considered good.

Havertys, Sealy and other major manufacturers have seen sales drop 25 percent or more since last year. La-Z-Boy, Pier 1 Imports and other chains are closing underperforming stores, and the number of corporate bankruptcies is skyrocketing.

Home sales are the No. 1 driver of furniture sales, said Randy Good, executive vice president of Boyles Distinctive Furniture of Conover, N.C., about an hour northwest of Charlotte.

"Even if you downsize, most people still need to change something about their homes," Good said. "When the housing market goes down, that kills us."

A new home was Mariana Wirsam's reason for buying new furniture this week.

Wirsam and her family moved to Apex, N.C. and she spent $2,600 on a new dining room set, bedroom set, a desk and two sets of bookshelves.

Value and quality were most important to Wirsam.

"We've got a nice house, so we can't buy plastic furniture," she said. "But we didn't want to break the bank."

Finding furniture shoppers, even value-conscious ones, is getting harder.

In North Carolina's Triangle area, which includes Raleigh, Durham and Chapel Hill, sales of existing homes have been declining for 11 consecutive months, though home prices have continued to rise.

That's not too bad compared with harder-hit areas of the country like Broward County, Fla., where home sales have slumped and the average home value has dropped by nearly 20 percent over the past year.

"I've got friends with stores elsewhere in the country where they're having a lot more trouble," said Jerry Nowell, whose family has operated Nowell's Contemporary and Scandinavian Furniture since 1905 in Cary, N.C. "We're still doing fine. It's just not as fine as we were a couple of years ago."

Nowell theorized that the area's high number of independent furniture retailers could be helping to keep the furniture retail scene strong, because independent business owners are more flexible and can react quickly to changes in the market.

"A chain might collapse even if it's doing well in North Carolina, because of their exposure to the Florida market," he said. "But a locally based independent rises and falls with the local economy. ... I don't need to wait for a decision from the home office in Idaho to adjust my advertising budget."

Nowell brought in a flood of new inventory at the beginning of the year and had a big sale, which bolstered his first-quarter revenue. The second quarter of the year was flat.

"I don't think it's going to get better this year," he said. "The people who can hang in there, who can tighten their belts, will be OK."

Some have already succumbed to the slowing market.

Upscale furniture store Porto, which focused on custom-made, environmentally sustainable furnishings, closed its only stores -- in Raleigh and Chapel Hill -- last month.

"It doesn't surprise me, because we're very reactionary people, and we think five minutes into the future," said Porto owner Michael Perry. "People thought, 'Well I need my Suburban to carry around my two kids, so I'm not going to (buy expensive furniture).'"

The stores that remain are tightly controlling inventory, closing underperforming stores and boosting their advertising.

This week, Pier 1 Imports said it would close 20 to 25 stores by the end of the year but didn't specify which ones.

Boyles Distinctive Furniture is running more promotions, Good said, but "I don't think that's healthy. In the end, the customer probably gets a little more value, but ultimately, you have to build the marketing into your prices."

For now, though, the additional marketing may be necessary, at least until the housing market improves.

"We're just not on the front burner," he said. "We don't have a lot of tools that force you to want to buy. ... For a lot of people (buying furniture) is right above going to the dentist."

(E-mail Sue Stock at sue.stock(at)newsobserver.com)

(Distributed by Scripps Howard News Service, www.scrippsnews.com.)