Premium Furniture Heats Up
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Though the numbers show that American consumers are spending less on furniture than they have previously, that does not go to say that all furniture companies are losing ground. Similar to general retail and automotive, the high-end and luxury brands are still proving to be desired products.
Interior design retailer Ethan Allen Interiors (NYSE: ETH) was recently upgraded to "buy" status by Raymond James. The company’s core competencies include design, sourcing, logistics, marketing, services, and execution. Ethan Allen products are sold exclusively through an international network of 300 design centers. They are a vertically integrated, specialty lifestyle retailer of quality home furnishings, including wood furniture, upholstery, and accessories. The company owns nine manufacturing plants in the U.S. and supplements domestic capacity with global sourcing. Their market capitalization is over $612 million.
Furniture stocks were recently hit hard after La-Z-Boy Incorporated (NYSE: LZB) posted weaker than expected results for the first quarter and said it was positioned to further capitalize on any strengthening in the economy, particularly consumer confidence and the housing market. La-Z-Boy is famed for introducing the recliner in 1928. Today the company considers itself one of the world’s leading residential furniture producers. The corporation’s proprietary distribution network is dedicated exclusively to selling La-Z-Boy Incorporated products and brands, and includes 309 stand-alone La-Z-Boy Furniture Galleries stores and 545 independent Comfort Studios stores. In addition, the company boasts in-store gallery programs for the Kincaid, England, and Lea operating units.
Furniture Brands International (NYSE: FBN) is an industry peer of both Ethan Allen and La-Z-Boy. Furniture Brands markets their products through a wide range of channels. They are a world leader in designing, manufacturing, and retailing home furnishings. Much smaller than both La-Z-Boy and Ethan Allen, Furniture Brands’ market capitalization is just over $63.1 million. They distribute their products through a wide range of channels, including their own Thomasville retail stores. Their portfolio includes a wide range of brands.
As general retail is taking a downfall recently, Ethan Allen is holding its own. It might be similar to luxury retailers in that it is not taking quite the hit as the generalized or discounted retailers. Luxury and high-end brands are still sought after by consumers; this is showing true in the furniture sector as well. Ethan Allen is a strong company with a loyal base of customers that will serve them well.
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