Furniture Industry Assembling New Licensing Deals
High interest rates and inflation are roiling the furniture industry, forcing the breakup of several high-profile licensing agreements that have resulted in new ones.
The boom-and-bust cycle is partly tied to the U.S. housing market, where high interest rates have slowed sales, resulting in a sluggish market for furniture. Much of the downturn is tied to consumers having clamped down on discretionary purchases, new furniture being among them.
As a result, plans to buy home furnishings and electronics have been eroding steadily with consumers allocating an 8% share of their wallet during the four weeks that started Sept. 26 to those categories, according to Deloitte’s Global State of the Consumer Tracker.
At the recent High Point Market, a rash of bankruptcies was as suppliers sought to forge new agreements to replace those lost to forced partings.
Klaussner Home Furnishings’ sudden shutdown in August put its furniture licensing agreement with country music star Trisha Yearwood in play. The agreement was picked up by Legacy Classic, which launched a new collection at High Point.
Meanwhile, Noble House Home Furnishings, which had a licensing agreement with former Brady Bunch star Christoper Knight for furniture, fell into bankruptcy citing past supply chain disruptions and the $10 million it owed suppliers and warehouse companies. Noble was a major supplier to Walmart, Target, Costco, and others. The fate of the agreement with Christopher Knight could not be determined at our deadline. GigaCloud Technology made a bid for Noble in September.
And the Mitchell Gold Co., which operated under the Mitchell Gold + Bob Willams brand and had 25 stores, also sought bankruptcy protection in September after failing to reach an agreement with lender PNC Bank. It was ordered to liquidate this month.
Underscoring the financial struggles also occurring at retail only 40% of small business owners, many of whom are furniture retailers, were able to pay rent full and on time in September, according to Alignable’s survey of 4,523 businesses. Furniture and home furnishings sales declined 5.8% in September from a year ago, but improved from 6.3% and 7.8% in July and August, respectively.
Despite the financial struggles, there was no shortage of new licensing agreements at High Point. Magnusson Home Furnishings formally unveiled its licensing agreement with Delta Apparel for its lifestyle label Salt Life. The line features three collections and brought Salt Life into furniture for the first time. Dorel Industries’ Home Division introduced a limited edition The Novagratz collection for its long-running licensing agreement with interior designers Robert and Courtney Novagratz. Magnolia Network’s Bargain Mansions Tamara Day launched a new collection with licensee Spectra Home, including sofas, sectionals, chairs and other products.
With much of the furniture market’s volatility focused on lower priced goods, more premium brands have so far been unscathed.
The Metropolitan Museum of Art licensee Eichholtz formally took the wraps off its 90-piece collection, about half of which feature designs derived from the museum’s collection and the other half inspired by it. The line stretches from tabletop statues like the Object Sphinx of Hatshepsut and Bust Roman Imperial to the Acanthus white marble coffee table and Sofa Manhattan, the latter inspired the architecture of the museum’s Great Hall. The collection will be sold through Eichholtz’s web site as well as some Bloomingdale’s stores including Al Thayer Group’s location in Dubai, United Arab Emirates. The products also are available at Eichholtz’s store in Miami, FL. and will be in locations planned for Atlanta, GA; Washington, D.C.; Chicago, IL; Los Angeles, CA; and Monterey, Mexico.
The Eichholtz collection will be sold through the company’s website as well as some Bloomingdale’s stores including Al Thayer Group’s location in Dubai, United Arab Emirates. The products are also available at Eichholtz’s store in Miami, FL. and will be in locations planned for Atlanta, GA; Washington, D.C.; Chicago, IL; Los Angeles, CA; and Monterey, Mexico, said Mike Beke, head of collaborations at Eichholtz.
“The premium segment of the home furnishings market is still strong, and those consumers are seeking the beauty and storytelling of a collection such as Eichholtz has designed for The Met,” said Linda Morgenstern, vice president of brand management at licensing agency Beanstalk, which represents The Met.