world news - 18.11.2002
Small furniture firms battle to keep doors open
Three more companies post liquidation notices in an industry that is seeing falling sales amid the economic downturn
Small furniture firms battle to keep doors open
Three more companies post liquidation notices in an industry that is seeing falling sales amid the economic downturn
TIMES may be tough, but anyone who has been to Ikea over the weekend knows that it is still thronged with shoppers.
But while it is a case of 'sofa so-good' for Ikea and fellow furniture giant Courts, the economic woes have brought the curtain down for some small and medium furniture retailers.
Last Friday alone, three furniture companies — Dynasty Pacific Homes (Lakeside 2), Sterling Home Furnishings, Del Mar Furniture Industries — posted liquidation notices in the classified section of The Straits Times.
And they are just the latest in a string of furniture firms going bust.
Once-familiar names such as Homestead Furniture, Ideal Home, Actus and Pennsylvania House are among those that have closed down over the last two years.
Said Mr Paul Keng, honorary president of the Singapore Furniture Association: 'Since 2000, the industry has been experiencing a decline in sales.
'The economy has been bad and the number of home owners has not increased.'
The number of small and medium furniture retailers has dwindled from a high of 1,000 three years ago to between 600 and 700 this year, he estimates.
Survivors are increasingly feeling the pinch, too.
Small shops tend to be the hardest hit, facing falling sales, rigid rents and competition from the big boys which have more capital and offer wider choices.
'The bigger companies have the financial muscle to advertise. They appear more regularly in newspapers. We have to depend on word of mouth,' said Brasswoods founder Bhani Karthigesu.
And it is more than a mere table or bed that these furniture giants are advertising.
Indeed, it is an entire chic and modern lifestyle they promote.
A flip through any of their catalogues will reveal a wealth of ideas on doing up a home like a showroom.
'Buyers are becoming very sophisticated. They want shops not only to sell items, but also to offer ideas on how to decorate their homes,' said Mr Keng.
Of course, it helps that the big players offer the convenience of one-stop shopping — Ikea, for example, even has an in-house cafe for its tired and hungry shoppers — and other perks such as flexible repayment plans.
But the biggest draw is often lower prices.
'Big companies import in greater quantity and can sell at more competitive prices,' said Mr Michael Daryanani, managing director of Fantasy Waterbeds.
Still, some smaller players refuse to throw in the towel. What they lack in size, they make up for in numbers by banding together to build a critical mass.
The Furniture Mall at Turf City, for example, was opened only in June this year and has about 20 retailers.
This is on top of the two existing malls at the Woodlands Civic Centre and Plaza Hotel.
'The clustering of small shops allows us to negotiate better rentals from the landlord. At the same time, we can offer promotions and advertisements together,' said Mr Keng, who is also The Furniture Mall's managing director.
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