Considering that raw material costs have risen and margins have already been reduced to the lowest possible level, the only chance for companies in this industry to attract customers in stores is through attractive ranges.
Awaiting a return in consumers’ appetite for furniture, companies in the industry are tentatively opening stores, with their hopes lying with the second half of the year and with 2012.
“The local furniture market is doing slightly better (at the beginning of this year), but it is not enough (to recoup previous years’ losses),” said Aurica Sereny, president of the Romanian Furniture Manufacturers’ Association (APMR).
Furniture sales on the Romanian market, including imports, were estimated at EUR1 billion per year, but in 2010 they fell by 15%, according to the association’s forecasts.
Sereny expects the domestic market to remain at the 2010 level, after three consecutive years of decline.
However, there is good news coming from exporters, who could see the same growth pace as last year, of 8.5%.
Mobexpert, the biggest player in the industry, a business controlled by businessman Dan Sucu, posted a 5% lower turnover in the first three months of this year, but made up for some of the decline in April.
Sucu announced at the beginning of the year he expects Mobexpert sales to return to growth in 2011, whereas last year its turnover exceeded EUR110 million, down 4% on 2009. Mobexpert could resume network expansion this year.
On the other hand, the sales of Elvila, the second-biggest player in terms of turnover, stagnated in the first three or four months of the year, according to data supplied by Viorel Catarama, the group owner.
In 2010, Elvila surpassed the EUR100 million turnover mark, after a 5% growth in sales, while its operating profit was 2.8%.
“2011 is the worst year and we can only hope that things will be better in the future. However, the problem of the exchange rate, which affects exports, remains,” said Catarama. He also ponders expansion.