The readings this week, reported that Furniture Brands is doing a reverse spit, one for seven. Their stock was near zero. Foreign furniture and the recent economy has almost done them in. It was also explained that much domestic manufacturing has been jobbed out to the foreign producers. So, we end up with an American company that has everything built overseas. The labor their is incredibly cheap, in one activity, a worker gets about $40 a month. So, that puts a lot in perspective, cheaper priced and along with that cheaper built items, the price is what consumers understand. Doesn't bode well for the future of our industry and is certainly a thorn in our economy.
Even if the trend reversed toward the original direction, there is doubt that there will be enough skilled workers around to support production. Sounds like it is throw-away by design?
Doyle
I think some where we are going to come to the end of the road, the furniture is becoming so cheap, and consumers becoming so sick of it falling apart that something has to give. Maybe it will go back to the way it used to be, before the industrial revolution, when upholsters built upholstered furniture for their clients.
I build high end furniture because I cant compete in the low end market, nor do I want to, but maybe a mid range market will reemerge. I can easily imagine upholsters all around the US building and upholstering sofas and chairs, etc. It's not that hard and only requires a few tools, table saw, band saw, some clamps and a drill will get you going, just stick to dowel joints and simple shapes and one can turn out a mid range, high quality piece, compared the the junk that people are buying today. If the shape is simple and someone has several under their belt a complete frame can be built almost in the same amount of time it takes to completely strip an existing frame. It gets pricy when we start to add mortise and tenon joinery, inlays, finely finished exposed wood, fancy curves etc. Keep it simple and I think a local upholster can turn out a quality piece of furniture in a price range that people who want quality can afford.
FBN stocks were not near zero. I think the concern is that they might be headed there. 52 week range is 6.16 - 12.74.
Reverse stock splits are almost never a good sign - especially for a big company like this. Institutional stock holders
sold 69% of their holdings, 11 millions shares, in the last quarter to present.
I know someone who thought their stocks in another company more than doubled. There were really excited! But then I pointed out to them that their stocks had gone through a reverse split and yes, each stock was now worth more than double, but they only had 1/8 the amount of stocks that they previously had. Ouch.
I keep hearing comments from England about all the plumbers in England being Polish. I wonder if Englanders stopped learning the trades also and that's why Poles are able to find work in England as plumbers?
I recently heard a lecture where the speaker said that 52% of all PhD candidates in the USA are foreigners. And most of them return to their homelands after they receive their doctorate degrees. He also said that if it wasn't for these foreigners the majority of our graduate programs in the USA would close down for lack of candidates.
We are in some fascinating times of change today.
gene
Quote from: mike802 on May 30, 2013, 06:51:44 am
I think some where we are going to come to the end of the road, the furniture is becoming so cheap, and consumers becoming so sick of it falling apart that something has to give.
I think that day is coming. People are sick of buying the same couch every two years. I'm sure it comes as no surprise to those who repair furniture, but I was astounded when I recently had to repair a couch for a boat customer.
(https://forum.upholster.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F5vz2zd7.jpg&hash=91ff5eea494f8318c2a4cabcb11fbb6c) (http://imgur.com/5vz2zd7)
Just incredible the level of cheapness in this thing. If you buy new furniture you're sitting on $500 worth of lies. The manufacturers are thieves and I think people are starting to realize they're being robbed.
Furniture Brands is still in deep trouble. Their stock was less than a buck and that threatens being removed from the stock exchange. They did a reversal of 1 for 7 which put the stock around $10 a share.
If you look at their performance, lately their stock is less than $5 as we speak. This is after a 1 for 7 exchange. Put that in perspective and it looks like they are still headed toward virtually being removed from the stock exchange. Their HQ is located within a few minute drive from me. I would suspect, FBN to exist of any size will off shore some or more of their manufacturing, like L-Z-Boy has.
Another interesting story is L-Z-Boy, the bottom line is their retail store space is dedicated to more and more imported products. Domestic products continue to take less floor space.
Another given is.........our middle class has to grow or there will only be more of the same. Many low income people are struggling to purchase the low end foreign cheap products imported now. It is a dilema, sure people don't like the cheap furniture but can't afford better. Manufacturers cannot build quality in furniture and sell it at competitive prices, that leads to the path that FB is in now.
A point, a person on the news said that if merely a much higher percent of cars sold were totally produced locally, it would reverse the trend in our economic picture.
Think that will happen?
Doyle
Hey Doyle,
What is the stock symbol that you are looking at for Furniture Brands. I've got FBN on my watch list and I think we're looking at different stocks.
I agree with you about our middle class needing to grow. I have always thought that it was a big middle class that made this country great.
QuoteA point, a person on the news said that if merely a much higher percent of cars sold were totally produced locally, it would reverse the trend in our economic picture.
I wonder if this person was making a point for the government to take over even more of our auto industry.
gene
Gene,
Probably so, different stock or data with different dates.
FB has been struggling for most of the last number of years, perhaps 10. I don't see it getting better, too bad because that is production we can ill afford to see go off shore. I have a strong feeing if FB hasn't gone off shore with part of the work already is going to happen soon.
Warranty work on furniture I have done now for a while is now being manufacturered away. Some was built in this country, just a few years ago. As you know, in the Asian region, decent workers are being paid only about $.40 an hour.
As I run across something related, I will keep in touch.
Doyle
Gene,
we had different information on Furnitue Brands recently, so I thought I would relate what I read in the financial section of our paper today:
Todays News: Local business section
Title: REd Ink a Constant at beleaguered Furnitue Brands
Destruction of wealth puts company in danger of being delisted.
Some excerps:
The furniture indsutry rises and falls with housing market, and lately most sofa and dresser makers have been buoyed by the uptick in home sales.
However, FB is the notable exception. The company has lost money every year since 2007, and analysts do not see it turning around before 2015, meaning it could be later if ever.
the company propects are so bleak tht the company recently got a second delisting notice from the new York Stock Exchange in less than a year.
The first one was easily addressed. The NYSE requires stock price to be over $1, and FB was just under that. So it did a reverse stock split in late May, issuing one new share to replace seven old ones.
Based on simple arithmetic, the stock price should have gone to nearly $7. And it did - for nearly three days.
It fell sharply in early June and is now at $3.92, down 39 percent in less than two months. FB's market capitalizaion, or the total value of its shares, has fallen to $33 million, and the NYSE requires a minimum of $50 million.
FB has 18 months to regain compliance, and its share price may be depressed right now, because Samson Holding, a Taiwanese company that owns 12.8 percent of FB, wants to reduce its stake to under 10 percent.
Clearly, this company has destroyed wealth on a colossal scale. Its market capitalization was $1.8 billion in 2004.
..............
Anyway, Gene from reports, FB is in serious trouble, no wiggle room left. Of the three biggest furniture manufacturers, La-Z-boy, Ashly, and of course FB, FB is the only one running in the red. That is attributed to their price point, middle class is shrinking - and like the article above stated , they have been in the red since 2007.
Their capitalization is shrinking like a rock, as you read, a major investor is wanting out, they are trying to reduce their holdings, significantly.
just thought you would be interested.
Should you want to read the entire article, perhaps you can find the article on line, I would think there are several papers covering this report.
Doyle
bunch of stories about Furniture Brands:
http://www.furnituretoday.com/search/index.php?q=furniture+brands&sa.x=0&sa.y=0&siteurl=www.furnituretoday.com%2F&ref=www.google.com%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3D%26esrc%3Ds%26source%3Dweb%26cd%3D1%26ved%3D0CC4QFjAA%26url%3Dhttp%253A%252F%252Fwww.furnituretoday.com%252F%26ei%3DV-3pUY7KNNO64APAoIDIDA%26usg%3DAFQjCNGnOL2hMu-7W3AOIIuCGefx-E630g%26sig2%3Dmo4pKFSiAnfq-zyCKXT3_Q%26bvm%3Dbv.49478099%2Cd.dmg&ss=4480j1629742j20
Somehow, I missed Peppy's photo. That does not surprise me at all - business as usual for me.
Thanks for the info Doyle. It's good to be aware of what's happening in our industry.
I doubt they will go under, but you never know. That would be a lot of folks losing their jobs.
There's also a lot of institutional investors who own this stock. That tends to indicate a lot of pressure to find ways to turn things around.
I saw that 26% of their 2012 sales of over 1 billion went to 'general sales and administrative costs'. That's a lot of high paying salaries and perks for the owners and upper management.
gene
I hear you Gene, their Thomasville line offers their best chances.
Be interesting for you if you could catch the article because they are trying or have tried a $500 broyhile sofa but so far haven't got it cooking.
I don't understand that because people know that brand and the price should cause some sales. Why is going to take until 2015, at least, for a turn around?
They like their CEO, he is supposedly a good guy but time is running out on him.
La-Z-Boy and Ashley are sure dependent on off shore support. I haven't heard how LA-Z-Boy is woring out but mixed reports on Ashley off shore support.
Sad about Detroit huh?
Doyle
Foam going soft or some say flat in new furniture has been a problem lately. We are installing new foam after only about two or three months of use. Replacements are coming from the same factory that made the piece, which is usually somewhere in Asia.
I assume this problem stems from Keeping cost of new furniture down. Domestic foam has increased in price over time.
Is foam flattening getting worse?
Doyle
Furniture Brands continues decline since first posted and is now considering Ch. 11
EXTRA! EXTRA! Read all about it!
http://www.woodworkingnetwork.com/wood-market-trends/woodworking-industry-news/production-woodworking-news/Furniture-Brands-Weighs-Chapter-11-220370821.html#sthash.M73WC2Jh.dpbs
Quote from: DB on August 18, 2013, 07:23:15 pm
Foam going soft or some say flat in new furniture has been a problem lately. We are installing new foam after only about two or three months of use. Replacements are coming from the same factory that made the piece, which is usually somewhere in Asia.
I assume this problem stems from Keeping cost of new furniture down. Domestic foam has increased in price over time.
Is foam flattening getting worse?
Or, are people just sitting on their ass more? ;D
Corollary to Jojo's astute assessment:
Sedentary American asses are getting heavier. And heavier.
Silly me! forgot to add: "pass the remote, willya?"
Back to the developments with Furnitue Brands:
More bad news, they will be delisted this week from the NYSE, over the counter they go. It looks like chapter 11 is their next move. Net capitalization has and continues to drop, whole company is now just over 5 million, not much for one of the largest furniture builders left in the US.
Gene, if you have some additional information or reports, hope it is better news than I read. FBrands has, for years, had some very good lines, Drexel is just one. Hate to see them in so much trouble, their headquarters is here in our back door.
It sure seems that if America can't build it strickly by machine, we are out of the running, simply can't compete with Asian labor rates.
Doyle
More bad furnitue market news; this marketing area is approximately 3 or 4 million, said to support the following news isn't just a drop of rain.
The area was head quarters for Furnitue Brands now in chapter 11. There are two retailers, relatively large but who catered to different furniture markets. One the upscale and the other, the opposite end of the scale.
This week, it was noted that the upscale firm that typically sold the very nice expensive stuff placed a large ad in the paper with pictures. What was seen is they are marketing the same Asian made typical sofa/love seat combo that inclded recliners and is covered in processed black leather that the major low end retailer aluded to above sells. The price is essentially the same.
That short story indicates that the furniture market isn't going to "come back" like it used to be. The expensive retailer obviously was faced with a decision to go in the direction taken or go out of business.
This situation has been framed before and repeatedly for a while, but put in another way ..............It Sucks!!!!!!!!!
Doyle
There are pockets of success, however. I'm familiar (via family/friend ties) with a local company making, from scratch, very high end furniture sold via designers and boutique outlets. It's almost exclusively high end Italian leather covered. They're continuing to expand and hire. Crazy successful, but probably fewer than 100 employees, all told. Some manufacturing is done here in Florida, but most in Texas. I suppose if you find your niche, you're golden. But as for the big box furniture stores, they're stuck competing with each other for the average Joe's meager new furniture budget and average Joes (of which I'm one) just can't afford much.
June
when I , Joe meager ,moved to Florida I bought a living room, set couch love seat and table and lamps like $2500
9.5 year ago it lasted well I tossed the move seat as it didn't work in my new house
Here is a "Made in China" chair that I started on today. The customer complained that after only 1 year, the inside back has no support.
This is what I found when I opened it up:
(https://forum.upholster.com/proxy.php?request=http%3A%2F%2Fi775.photobucket.com%2Falbums%2Fyy33%2Fsofadoc%2Fth_MOV05443.jpg&hash=0931b620093adac70a38fc3c5e20c096) (http://i775.photobucket.com/albums/yy33/sofadoc/MOV05443.mp4)
It is all about cost isn't it. On the positive side, looks as if the frame is solid wood, no plywood.
Doyle
Quote from: sofadoc on October 08, 2013, 06:48:40 pm
Here is a "Made in China" chair that I started on today. The customer complained that after only 1 year, the inside back has no support.
This is what I found when I opened it up:
(https://forum.upholster.com/proxy.php?request=http%3A%2F%2Fi775.photobucket.com%2Falbums%2Fyy33%2Fsofadoc%2Fth_MOV05443.jpg&hash=0931b620093adac70a38fc3c5e20c096) (http://i775.photobucket.com/albums/yy33/sofadoc/MOV05443.mp4)
I had a similar experience with dining seats. Totally worthless.