Wood Household Furniture, Upholstered

Industry Snapshot

According to Dun and Bradstreet's 2009 Industry Reports, 1,483 establishments operated in the United States in the upholstered household furniture industry in the late 2000s. These businesses employed 57,604 people and generated $4.8 billion in annual sales. Although most establishments were small, with about 83 percent employing fewer than 100 people, firms that had more than 100 employees accounted for 65 percent of sales. Michigan accounted for the largest percentage of the nation's revenues in 2008, with $1.3 billion, followed by Connecticut with $1.0 billion. Rounding out the top five were North Carolina ($595.3 million), California ($472.3 million), and Mississippi ($441.2 million).

Organization and Structure

This industry is defined primarily by the materials with which the products are constructed, rather than the actual end products. All products feature wood frames and fabric or leather upholstery. Establishments within this industry produce a wide range of upholstered furniture for the home, including such upholstered living room furniture as chairs, rockers, couches, sofas, and recliners. Products manufactured in this industry include other household furniture, as well as juvenile furniture.

Establishments in this industry produced goods that were sold to distributors or directly to retailers. Manufacturers produced goods for sale at a variety of price points and under a variety of brand names. New retailing techniques affected the industry. Industry watchers noted a growing tendency among manufacturers to enter into agreements with retailers to open galleries devoted to the manufacturer's goods, which attracted customers and increased sales. The arrangement was mutually advantageous because the retailer had proprietary rights on the goods, while the manufacturer got a dedicated retail outlet for its merchandise.

Background and Development

Manufacturers of upholstered wood furniture benefited from an expanding market in the early 1990s, leading to approximately 5 to 6 percent growth between 1992 and 1993 alone. The industry was influenced by the rate of new home construction and the number of existing homes being remodeled. Standard and Poor's estimated that the upholstered wood household furniture industry would continue to expand through the end of the 1990s due to changing demographics. As baby boomers grew older and had more disposable income, they were expected to want to fill their homes with things that matched their upscale lifestyles.

In the late 1990s the economy was still going strong. Unemployment was low, and the stock market and consumer confidence levels were high. Housing starts were still strong, and low interest rates spurred home refinancing, resulting in more money to spend on household furniture. People in the United States also had more disposable income than ever, resulting in strong furniture sales. However, by the early 2000s growth rates for the furniture industry began to lose ground. Nevertheless, the upholstered furniture sector suffered fewer company closures and employee layoffs than the furniture industry as a whole, which experienced several company closings and employee layoffs. In 2004 the industry stabilized and began to grow at a more predictable pace.

According to the U.S. Consumer Product Safety Commission (CPSC), as reported in Furniture Today, "fires originating in upholstered furniture account for 20 percent of all fire-related deaths in the United States and kill an average of 10 people a week." The Upholstered Furniture Action Council (UFAC) enacted voluntary standards to promote the use of inflammable fabrics in 1974, but since the standards are voluntary, imported goods are often not compliant. John Dean, president of the National Association of State Fire Marshals (NASFM), called for more stringent measures. "The UFAC voluntary standard obviously isn't working because we are still losing 10 people a week," he said in Furniture Today.

The NASFM sought more stringent standards beginning in 1993, but its efforts had stalled due to staff changes and draft revisions by the CPSC. The recommendations initiated by the NASFM addressed the ability of upholstered fabric to resist fires caused by cigarettes and small open flames from such sources as matches, candles, and lighters. Concerns over consumer exposure to flame-retardant chemicals further slowed progress by the CPSC. Finally, in 2005, the CPSC released a draft for the regulation that offered manufacturers four options for compliancy: using an interior fire barrier; coating the cover fabric with a barrier such as leather, wool, or vinyl; employing a combination of the first two options; and utilizing any method that meets the standard.

The draft was not enacted, however. In mid-2007, several diverse organizations united to devise a plan to spur federal regulators to adopt fire safety standards. This group included such organizations as the International Association of Fire Fighters, the National Textile Association, Underwriters Laboratory, and Friends of the Earth. The consensus was that additional testing must be conducted to find satisfactory remedies that do not expose consumers to potentially toxic chemicals.

Current Conditions

Consumer concern about the contents of upholstered furniture and how it is manufactured continued to affect the industry into the late 2000s. According to a September 2009 article in Furniture World Magazine, "Product options in sustainable furnishings continue to grow as upholstery specialists . . . respond to consumer demand for environmentally conscientious manufacturing, renewable resources, and responsible sourcing." In addition, Jeff Hiller of the Sustainable Furnishings Council (SFC) noted that "the nature of upholstery makes this one of the hottest product categories to benefit consumers wanting to go green." Manufacturer Harden Furniture launched its EcoONE(tm) furniture program in 2009, which offered sustainable and chemical-free materials in all components of upholstered furniture for a standard upcharge fee. Such green components included foam cushions made with soy-based ingredients, framing material made from certified sustainable lumber, and fabrics made from organically grown cotton, bamboo, and hemp. Even the seat springs in the EcoONE furniture were green--made from recycled steel.

Industry Leaders

La-Z-Boy Inc. was the largest producer of upholstered furniture in the United States in the late 2000s, and its recliners were the world's leaders. Based in Monroe, Michigan, its brands included La-Z-Boy, Bauhaus USA, Hammary, and Kincaid. The company also manufactured chairs, sofas, and tables, all of which contributed to its 2008 revenues of $1.2 billion.

Furniture Brands International also ranked as one of the leading manufacturers of residential furniture in the United States. Revenue for 2008 topped $1.7 billion, portions of which were derived from its nonupholstered lines. Based in St. Louis, Missouri, this company produced such brands as Broyhill, Lane, and Thomasville.

Ashley Furniture Industries Inc. of Arcadia, Wisconsin, made upholstered, leather, and hardwood furniture and distributed it through more than 300 Ashley Furniture HomeStores throughout the United States, Mexico, Central America, Canada, and Japan. Estimated sales in 2007 totaled $3.4 billion.

Klaussner Furniture Industries Inc. manufactured furniture under the Distinctions, Realistic, and Klaussner names, as well as such licensed brands as Sealy. Headquartered in Asheboro, North Carolina, Klaussner owned a 20 percent stake in Jennifer Convertibles, a retailer of sofa beds and other upholstered furniture.