There are new signs of bounce in the hard-pressed homewares and furniture market, on which the springs went more than a year ago.
Last week BDO’s High Street Sales Tracker recorded a rise in monthly homewares sales for the first time in a year. That was followed by Tuesday’s BRC July sales data, showing the best furniture and floor coverings performance since May 2006.
Similarly, Carpetright founder Lord Harris last week pleased the market with stronger than expected first-quarter update. He celebrated the first quarter of like-for-like sales growth since the final period of 2007/08.
It is probably too early to breathe a sigh of relief just yet. Along with bad weather, which lifts demand for home products, discounting played a big part in driving sales. There was also evidence that replacement items sold better than discretionary lines.
But even the prospect of improvement is encouraging. Home categories, partly because of the big tickets attached to many products, are key indicators of whether the consumer economy is really on the up.
Once the downturn ends, the big-ticket retailing landscape will have been transformed. Recession has brought the downfall of a host of well-known quoted names, such as ScS and Land of Leather. Some have been resurrected in private hands but other private groups, such as MFI, have collapsed like a cheap cabinet. The upshot is there are only three home specialists left on the stock exchange – Carpetright, Dunelm and Topps Tiles – and their share prices are all on the up.
Once the market does settle down, the quoted specialists’ resilience is likely to leave them in powerful positions. Among the plethora of now private furniture groups some may emerge as strong players. Some, such as DFS, already are. But the quoted big-ticket and home specialists have shown their mettle and proved themselves strong enough to survive. They look to be in a good position to reward investors as the economy improves.
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