Furniture Brands International runs a diminished furniture-making empire. A leading US home furnishings manufacturer, Furniture Brands' subsidiaries offer a broad portfolio of nationally recognized brands, including Broyhill, Lane, Thomasville, and Drexel Heritage, among others. Broyhill makes mid-priced wood and upholstered furniture for the bedroom and dining room, as well as other home furnishings. Lane Venture (outdoor wicker and teak collections) and Henredon (wood and upholstered pieces) target the premium-priced furniture market. Furniture Brands distributes its products through a network of company-owned furniture centers, independent dealers, national and local chains, and department stores.
In addition to making furniture, the company is also sells it through company-owned Thomasville Home Furnishings Stores. The 48 company-owned stores rang up $108.5 million in sales in 2011, representing nearly 10% of Furniture Brands' total annual sales. On the manufacturing front, the company opened a new cut-and-sew plant in Merida, Mexico in 2011 and expanded its operations in Indonesia.
Furniture Brands has manufacturing plants in the US and overseas, and sources some products from abroad. Its domestic operations consist of eight upholstery plants, two case goods facilities, one component manufacturing plant, and one multifunctional facility, principally located in North Carolina and Mississippi. The company also manufactures furniture in the Philippines, Indonesia, and Mexico.
Furniture Brands' sales have declined every year since 2006 and the company has been unprofitable since 2007. In 2011 sales fell 4% vs. 2010 and the company lost $44 million, compared with a loss of $39 million in 2010. Sales of higher-priced furniture outperformed sales of more moderately priced merchandise, while sales of upholstered products generally outperformed sales of case goods. Overall, the $1.1 billion in 2011 sales was less than half of 2006's sales. Furniture Brands blamed weak retail conditions for its continued poor financial performance. Indeed, a combination of factors, including the deep recession in the US, the twin housing and foreclosure crises, and tight consumer credit have all conspired to drive down sales.
One bright spot in recent years has been increased sales at its 48 company-owned Thomasville Home Furnishings Stores. Same-store sales at the company-owned locations increased 6% and 19% in 2011 and 2010, respectively. Sales at Furniture Brands' other retail stores declined over the same period.
In response to the poor business environment, Furniture Brands has consolidated its domestic operations with the closing and selling of excess manufacturing, warehouse, and office properties. The retrenchment in the US led to cuts in the company workforce. (The company employed about 8,800 workers in 2011 vs. 11,900 in 2007.) The cuts have primarily affected manufacturing centers in North Carolina and Mississippi.
Furniture Brands also is refocusing its distribution efforts. Thomasville and Drexel Heritage have expanded their networks of branded stores, both company- and dealer-owned, while Broyhill and Lane are focusing on distributing to traditional furniture retailers and mass merchants.
To tap the lucrative (more recession-proof) high-end market and sell directly to designers, Furniture Brands created the Designer Group, comprising several of the company's high-end lines to be marketed primarily through designers. The lines include Henredon, Maitland-Smith, Lane Venture, Hickory Chair, and Pearson.
In the meantime, the furniture firm also has been looking for ways to diversify. Furniture Brands, as a result, is looking to expand its licensing program. The Thomasville brand has already extended its reach beyond furniture into residential flooring, lighting, and kitchen cabinetry. The company is considering licensing its Lane, Broyhill, Drexel Heritage, and Henredon brands.
Samson Holding holds about a 13% stake in Furniture Brands. – less