FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / Blogs / Read Blog


Lemons, Furniture Polish and an Industry in Transition

November 04, 2014, 07:00 AM

When life gives you lemons, make furniture polish. This is the kind of innovative thinking the furniture industry needs to survive.

I was struck by this thought this week when I came across a quote by American composer Alfred Newman who once said, “We are living in a world today where lemonade is made from artificial flavors and furniture polish is made from real lemons.” After I chuckled, it gave me pause for thought. Lots of things in today’s world aren’t what they appear to be.

Take the manufacturing sector, for example, specifically manufacturing operations within the furniture industry. I know many of you have furniture manufacturing clients, and I appreciate how challenging those relationships have likely been over the past decade. But, take heart—the industry is poised for a turnaround depending on how—and how quickly—it responds to the multiple economic and social forces at work right now.

In October, ABTV released its 2014 Furniture Industry Watch Report during the fall High Point Market. We uncovered good news: Housing starts are up and existing home sales are increasing. As the housing market goes, so goes the furniture industry. As of 2013, new furniture orders had steadily increased by 23% since 2009. However, the industry faces some major challenges.

One of the key findings in our 2014 report is that manufacturing today isn’t what it seems. The problem? The industry is transitioning, but its image isn’t. Many still subscribe to long-held beliefs that associate furniture manufacturing with layoffs, untrained manual labor, and dark and dusty work conditions. The reality is that the furniture industry, as with other manufacturing sectors, is introducing advanced technology into its processes, replacing traditional manual processes with sophisticated machines that operate in clean environments. This has resulted in a skilled labor shortage.

An aging workforce has depleted the pool of skilled workers in the furniture industry—particularly upholsters and sewers. And fewer younger people are looking for those jobs. According to a recent survey, only 17% or people chose manufacturing as a top career choice.

The challenge is how to attract and retain qualified labor and overturn negative industry perceptions. The answer lies in the reality that this problem is greater than the furniture industry itself—the manufacturing industry in general is in need of a total image makeover.

This raises another industry challenge—the need to effectively communicate with multiple generations of consumers and workers in order to match marketing outreach and product preferences to different audiences and bridge the skills gap in order to remain competitive. Trends are driving trends, as our report points out.

For example, Baby Boomers are now downsizing from traditional five bedroom family homes to updated three bedroom town homes or condos. They are stunned to discover that their old furniture is not scaled to fit new, sleekly designed contemporary environments. They are off-loading so much of their stuff all at once that the used-furniture market has become glutted, and non-profit donation centers have become pickier about what they’ll accept for resale. Inexpensive imports are now an attractive alternative to second-hand furniture and collectibles.

Then we have the Millennials or Gen Y-ers who are driving their own trends, too. Environmentally friendly furniture trumps furniture made in the U.S.A., smaller is better because it’s more affordable and sized to fit their smaller, preferred living spaces, and social media is a critical element in this generation’s bag of research tools used when considering a furniture purchase.

By the year 2020, it is estimated that Millennials will comprise nearly 50 percent of the workforce, a reality the furniture industry must recognize as it markets to this consumer group and hires them. This generation thinks, acts and consumes in vastly different ways compared to previous generations and is already shaping a new world order. And, their preference for using technology as a primary communication tool is driving development of new distribution channels.

The Internet is changing the furniture retail landscape. Many retailers, particularly in the lifestyle category, have entered the rapidly growing e-commerce market that offers customers the convenience of purchasing furniture directly from their websites. Increasingly, consumers are more willing to purchase furniture online, sight unseen, and are embracing this new distribution channel. E-commerce is one of the new frontiers that the furniture industry must embrace.

Clearly, the furniture industry is at a critical turning point. The skills gap that exists is one of the big hurdles the industry must find a way to overcome. There is a need to communicate simultaneously with multiple audiences that are now active in the workforce and consumer populations, each with their own set of standards related to product and employment preferences. And, the industry must be willing to innovate and buck trends in order to thrive. Bold decisions made now will create course-corrections that can send the furniture industry in the direction of increased profitability, competitiveness and market share for the foreseeable future.

We’ll need to keep a close eye on how the furniture industry responds to these forces for the near-term.

In the meantime, can I interest anyone in a can of furniture polish?

Peter L. Tourtellot
Principal | Anderson Bauman Tourtellot Vos & Company
Peter Tourtellot is a founding principal of Anderson Bauman Tourtellot Vos & Company, a corporate revitalization company that works with companies in more than 40 industries throughout the United States. Founded in 1989, ABTV brings successful outcomes to companies in distress.

In his capacity as a turnaround professional, Tourtellot has served as interim CEO and president of companies in a wide variety of industry sectors, as well as a consultant to many others.

A leader in the development of the turnaround management profession, he is a past president and chairman of the Turnaround Management Association and a past president and chair of its Carolinas chapter. He has served as chairman of the association’s Certification Oversight Committee, a position that was created upon the merger of the Association of Certified Turnaround Professionals into the Turnaround Management Association in January 2008. He also serves as chair of the academic committee for the Carolinas Chapter of the TMA.

Tourtellot is a past president and chairman of the Association of Certified Turnaround Professionals and served as vice president of education and a member of their board of directors prior to the merger.

Tourtellot is a member of the advisory board for the Love School of Business at Elon University where he served as chairman from 2003 until 2010.
Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.