Furniture: Toughing up

By Matt Balmer
February 4, 2018

As the UK furniture market grows tougher, companies are starting to go under or be sold off. Richard de Melim looks at the recent troubles of Multiyork and Feather & Black and why drawing conclusions is dangerous.

By Richard de Melim

The run-up to Christmas — a crucial time for furniture retailers — got off to a terrible start: upmarket sofa chain Multiyork and its sister bedroom business Feather & Black were placed into administration within the space of five days at the end of November.

Hilding Anders, a Swedish bed manufacturing conglomerate, has since acquired 17 of Feather & Black’s 25 stores and will continue to trade the brand. DFS, the UK’s largest sofa retailer, has acquired 12 Multiyork stores. But although it has additionally acquired Multiyork’s IP, DFS plans to use the retail space for its other retail brands, chiefly Sofa Workshop.

The remaining 38 stores are due to close in February, meaning the Multiyork name will disappear unless or until DFS decides to resurrect it. So what do the collapse of Multiyork and downsizing of Feather & Black say about the top end of the furniture market?

Furniture is a deferrable purchase, which makes it a good barometer for wider economic trends. Often the first industry into a recession, so too is it the first one out. But while furniture is often a distress buy, this is less true towards the top end of the mass market, where Multiyork and Feather & Black both operated.

The issues at both Multiyork and Feather & Black were twofold. Firstly, neither business was quick enough to arrest long-term profitably issues; secondly, both had come under increasing competitive stress.

Between 2013–15, cumulative losses totalled £6.6 million and £6.1 million at Multiyork and Feather & Black respectively, and while both returned to profit in 2016, it was not enough to save them. Retailers such as Furniture Village, whose price architecture stretches into that of Multiyork and Feather & Black, underwent significant store expansion. At the same time, investors continue to throw cash at mattress startups that have, to an extent, undermined the price proposition of more expensive rivals.

The demise of both retailers is indicative of a tighter market – but a better measure of its health comes via the sale of OKA Direct. The premium furniture and interior design retailer was acquired by independent Italian investment group Investindustrial.

The company’s interiors stable already includes designer home companies B&B Italia and Flos. It has paid a reported £40 million to add OKA to its portfolio in a deal that makes a real statement about how some perceive the potential, and performance, at the top end of the mass market.