Furnishing sales revive as people buy homes

Last year, retailers present in the home segment were out of business as sales de-grew and furniture sales were sluggish.

However, that trend is reversing, as consumer sentiment revives.

Now, retailers are banking on the November-December wedding season to spur sales. Some, such as Creative Portico, have launched wedding specific collections to help off-take.

Pantaloon Retail’s subsidiary Home Solutions runs eZone and Home Town stores, of which the latter has started to show growth after reporting de-growth throughout the last financial year.

Kishore Biyani, managing director, Pantaloon Retail, told DNA Money the segment has started to pick up since last month and Home Town is showing growth of 5-7% this month.

Manish Parekh, director, Nilkamal Ltd, that runs the @Home chain of furniture stores, said there has been quite a lot of movement in the real estate sector and that people are buying new homes, which is a positive sign for sales of furniture and home furnishing in the coming months.

“We noticed some serious buying at our stores this festive season. People are buying furniture again, a category that had slowed down last year. We have grown by 15% from Diwali last year. Home segment in retail is a scalable and we are pretty confident of growth,” Parekh said.

Jay Gupta, managing director, The Loot, that sells home furnishing products of various brands, differs. “The trend reversal in home segment cannot be so frequent. Consumers still are not buying furnishings much,” Gupta said.

The Diwali sale week in Mumbai was affected due to unexpected rains and the election, which Gupta said made Diwali come and go “too quickly” for retailers.

“Earlier, consumers used to make Diwali purchases much before the festival arrived, now the purchase is happening at the last minute. Sales have been down by 25% this Diwali across the home, apparels and accessories segment for us,” Gupta said.

Creative Portico — that sells the Portico New York brand of furnishings — has re-started its retail expansion which it had paused. The company also has shop-in-shop stores at major retail outlets and is now looking to open standalone stores as well.
Welspun Retail, the retail arm of Welspun Group that runs 200 Welhome stores across the country, is also back on the expansion track. This fiscal and the next, the company plans to open around 100 new stores.

Dipali Goenka, director Welspun Retail, expects this quarter to be good for sales. “From the festival period right till December should bring cheer to retailers,” she said.
According to industry estimates, the organised retail market for the home furniture, accessories and furnishings segment is around Rs 1,000-1,250 crore and retailers believe there is a huge opportunity as consumers shift their purchases to the organised sector.
A sector analyst at a brokerage firm told DNA Money, “From what the retailers are saying, the home segment definitely is reviving. The trend has seen consumer sentiment returning to normal and the trend is sustainable. There is no reason why the home segment should not do well in the months ahead.”