Survey: Growing Financial Toll On Casual Furnishings Industry

Furniture World News Desk on 5/18/2020

According to the latest survey of International Casual Furnishings Association (ICFA) members, financial pressures and frustrations continue to mount as the pandemic grinds on through what should be the industry’s prime selling season.

In the third round of surveys collected by research firm Industry Insights between Monday, April 27 and Thursday, April 30, the financial toll resulting from stay-at-home orders is growing more severe. Indeed, with almost 98 percent of the manufacturers, retailers and suppliers surveyed, the findings report direct, negative financial impact on their businesses due to the coronavirus (a figure that has almost doubled since the first survey was fielded in mid-March). Of these, more than half of the respondents now characterize the impact the crisis will ultimately have on their businesses this year as “very negative.”

While there is pain across the board, retailers continue to be the most heavily impacted group so far, with 65.5 percent reporting that their businesses have been deemed “non-essential” according to their local jurisdictions. “While the research reveals that the majority of our members, whether manufacturer, retailer, supplier or sales representative are ‘somewhat’ (38.8 percent) to ‘very necessary’ (48.8 percent), retailers are most likely to express frustrations with ongoing shut-down orders, particularly since the majority (96.6 percent) have reported no confirmed COVID-19 cases among their employees since the crisis began,” says Jackie Hirschhaut, ICFA executive director. 

“Though the dealers allowed to operate report finding some success with curbside pick-up and free delivery,” Hirschhaut says, “only 13.8 percent of the retailers surveyed reported they are considered essential businesses in their marketplaces, so it’s clear that the majority of stores remain shuttered.” Related one store owner, “I’m not sure why a small business like ours needs to stay shut down when we never have that many customers in at one time,” while another respondent posed the following: “Why can a customer shop at a store like Home Depot and buy patio furniture, yet they can’t go to a furniture store, pool store or specialty store to buy patio furniture?”

Manufacturers are faring somewhat better, though the number of organizations reporting cases of COVID-19 among employees has jumped to 16.2 percent (from barely 1 percent in the first survey). Among the steps taken to mitigate spread, like the installation of physical dividers between office and plant workers where possible, one manufacturer described, “We ramped up several physical distancing protocols in our production spaces and converted all our office staff to remote work conditions to ensure we remained apart and safe while still functioning in all departments at near full capacity. The warehouse operates with a one-way picking aisle, assigned equipment that is not shared and frequently sanitized, and usage of supplied PPE (masks and gloves) is mandatory, as are staggered breaks and lunches. Meanwhile, our distribution with eCommerce-based retail channels has exploded, replacing more than what we lost from physical location sales. Our production teams are working overtime to fulfill orders, splitting shifts and extending hours to cover the increases.”

Not surprisingly given the growing shift to online shopping, few manufacturers and retailers have dramatically reduced their technology spends since the first round of research was fielded, with 24 percent actually reporting moderate increases in the latest edition. Advertising spends, however, are shrinking, with 32.5 percent reporting “major” reductions in this survey, and another 35 percent reporting “moderate reductions.”

The latest research also reveals that the timeline has been pushed for when our member organizations expect the stay-at-home orders to be lifted and daily operations will return to a pre-COVID-19 state. “In the first survey, most respondents expected things to return to normal within two to three months,” Hirschhaut says. “The envisioned date for normalcy is now two months later than that, pinning hope on sometime in late September.” 

With Casual Market Chicago scheduled for Sept. 22-25, the majority of participants reported that they expect company travel to resume within three months, along with large group activities.

“When the time comes and the stay at home order is lifted, we will be ready,” noted one retailer. “Social distancing measures are in place in the store and ready to go.”

In the meantime, said one manufacturer, “We’re keeping in touch with dealers’ management teams and staff, through multi-media channels, sending updates and keeping a positive message, but realistic scenario for the future.”

This research was conducted by Industry Insights on behalf of the International Casual Furnishings Association among 80 respondents, including retailers, manufacturers, suppliers and sales representatives, between Monday, April 27, and Thursday, April 30.

About International Casual Furnishings Association: The International Casual Furnishings Association, based in High Point, N.C., represents more than 100 manufacturers and distributors of outdoor furniture and accents, along with retailers, sales representatives and suppliers to the industry. For a downloadable version of this press release, please visit the News page of www.icfanet.org.