The reason there is a shortage of furniture (sorry, sofa and table buyers).
Last March, Olivia Messer, a freelance journalist, placed an order from Joybird for a sumptuous green velvet sofa. She had just bought a house in Florida, and her parents bought the item as a gift for her 30e birthday. The retailer warned, however, that the sofa may not arrive for four months. Last week the delivery finally arrived. It contained half a sofa.
By email, customer service told Messer that Joybird needed three to five days to search for a loading dock and find the rest of its order. Messer attributed the delay and his sofa cut in half to the vagaries of the pandemic. “Honestly, I think a lot of starting over in a new place and moving, renovating and buying furniture – some used, some new – right now is just becoming a little comfortable with the uncertainty, ”she said via text, adding that this isn’t the only recent furniture purchase she has had to wait for. For now, the missing half-sofa has not yet arrived.
Rarely has it been so difficult to get your hands on a bar cart, loveseat or dining table. Extended delivery windows for furniture have become commonplace as the global economy has begun to shed its pandemic sleepiness, with issues emerging along the supply chain. “A sofa would normally take eight to ten weeks under normal circumstances. Now they take 25 to 35 weeks for a special order, ”said Steve Giorgi, co-owner of the Giorgi Brothers furniture showroom in San Francisco. “It depends on each supplier. We have about 200 suppliers, and the furthest we have is September 2022. ”Demand for new furniture has skyrocketed during the pandemic, especially since the third quarter of last year, with people setting up offices and rooms. relaxation areas set up in their homes.
Meanwhile, shortages of various raw materials, transportation issues, and labor shortages are leaving many manufacturers and retailers in a pinch – and at times completely unlucky. La-Z-Boy revealed in a February earnings call that he lost $ 30 million in business in the last quarter due to disruptions in shipping and manufacturing. * Tim Fiore, who oversees Surveys of manufacturing companies for the Institute for Supply Management, says the furniture industry had the highest order book rate among any industry it monitored in June. “If I look at what has happened in the furniture industry over the past two months, this is probably our hottest line of business,” he said. “It’s by no means the biggest … but it’s the highest reorder number.” Lots of orders and a buckling supply.
In terms of materials, shortages of foam and lumber are seriously hampering furniture supply chains. In February, freezing winter storms caused widespread power outages in Texas and other southern states. In addition to leaving millions of people without heat or electricity, inclement weather also crippled several of the country’s major producers of propylene oxide, a main ingredient in foam. These factories are still recovering, and foam manufacturers have not been able to provide enough material for mattresses, sofas and chairs. “There is a rationing of foam,” Giorgi said. “The foam makers try to give people what they can give – give you something for nothing – but they’re still running at 60% or 70% of what factories need to run at full capacity. “
Additional fallout from the February storms left other factories to catch up by producing nationwide supplies of nuts, bolts, fabrics, drawer rails and brackets to hold chairs and shelves together. This tends to affect more expensive products. “On the high end, the bespoke stuff is the little components that keep it from being finished,” said Jerry Burdick, owner of iDeal Furniture in Las Vegas. “For example, you can get a fully cut and sewn custom leather sectional, but to complete it you need small steel components. “
Lumber is the other crucial raw material for furniture that has become much more expensive and harder to find. As my colleague Henry Grabar has pointed out, there is an imbalanced supply and demand dynamic in the sector. There has been a rush for lumber not only because of the demand for furniture, but also because of a boom in home construction and renovation. At the same time, sawmills reduced their operations after the Great Recession and no longer have the capacity to increase production, even though the timber they want to cut is plentiful. Building more factory infrastructure is costly and risky, and wood prices are already starting to drop. As Grabar wrote, “A new sawmill could take years to complete – and the last wood price spike, in 2018, has come and gone in half that time.”
The transportation of raw materials, components and finished products has also been a problem for international furniture supply chains. Imports from Asia, especially China, are stalled due to the pandemic and are skyrocketing. “I expect this to be a big deal in July, and we really don’t expect it to clear up until the end of the year,” Fiore said of the shipping delays. “On top of that, you no longer have air cargo because you don’t fly on international flights, which filled planes’ bellies with high-value cargo.” The Washington Post reports that shipping costs from Asia have quadrupled in some cases. Shipping containers are overbooked as many companies attempt to replenish stocks that were low during the pandemic and traffic jams are materializing at ports due to COVID outbreaks. In January and February, hundreds of dockworkers contracted the coronavirus in southern California, severely limiting the country’s ability to accept imported goods. A delta variant outbreak in Guangdong in June also had a ripple effect globally, as the province is a huge shipping hub that handles 24% of Chinese exports. This is bad news for the furniture industry, which is particularly dependent on imports from Asia. “Everything has something Asian, whether it is a fabric, a metal clip or the entire bedroom, there is nothing that is entirely made here”, said Giorgi, who noted that virtually all metal clips on American sofas come from China.
Given the global economic forces at play, small furniture retailers like Giorgi and Burdick can do little to cope with shortages and extended delivery times, although they have tried to reorient their businesses a bit to adapt to this new landscape. Burdick relied more on domestic manufacturers. “My store has changed a bit. I have products in there that are more made in the United States, just because they don’t depend so much on certain parts and foreign parts, ”he said. “I mean, everyone’s a little bit, but not where you’re completely disabled if you don’t get imports.” And while Giorgi’s boutique has historically specialized in bespoke products, it has recently tried to source more prefabricated items so people can buy things right away if they don’t want to face the challenges. extra long delivery times.
Despite all the headaches and higher costs, both store owners said this furniture rush was ultimately a net benefit to their businesses. “It was one of our best years. One of our best years in a long, long time, ”said Giorgi. “It’s been a lot of work, but we’re very lucky to be so busy. You may have to wait for half a sofa or more, but showrooms are a killer.
Correction, July 23, 2021: This post initially misspelled La-Z-Boy.