Analyst Stump Shares Final Thoughts on M&A in the Last Decade

Charlotte, NC, January 24, 2020--Furnishings industry analyst Stump offers a wrap-up of the last decade, “After major headwinds the first three years of the 2010s, we can confidently claim the 2010s as a growth decade. Building on a terrific 2019, 2020 is without doubt off to a strong start.” 

Interestingly, the analyst notes that, “Approximately 20% of the residential furniture industry changed ownership, either through merger, acquisition, IPO, PE re-capitalization, or through liquidation during the past 40 months.”

It also reports that its team monitors the most important trends in the furnishings industry, and they are as follows, 

“* E-Commerce & Big Data: Amazon, Wayfair, and others continue to take market share from traditional retailers. This is true of most retail categories, and furniture is no exception. Larger items and upholstery remain mildly insulated, but as younger consumers become the dominant furniture buyers - and as delivery and last-mile installation improves - a greater and growing shift to online purchasing is destined to occur. These internet giants are also exploring growth in the hospitality sector. The effective utilization of data to understand customers, price points, point of sale, marketing, products, and supply chains is increasingly what sets apart the winners.

“* Tariffs: The Trump administration’s tariff on Chinese goods continues, as does the uncertainty of months of protracted negotiations. This has been a boon for some and a nightmare for others. The most visible result has been the re-balancing of production out of China to Vietnam, Mexico and other lower cost countries, as well as a return to “Made in USA,” particularly in soft goods. We will be monitoring the recently concluded Phase I agreement closely and hope for continued negotiations/deals in 2020.

“* Blending Channels: We continue to see the commercial, residential and hospitality furniture sectors blur, with strategic focus on taking products into multiple channels. Segment is no longer primarily defined by product but by process.

“* Give me growth!: Strong companies are getting stronger, larger companies are growing larger, and growth is top of mind. As weak companies fall away, this opens an opportunity for the stronger players to grab market share and grow even faster.”