View Mobile Site
 

Ask the Expert

Signal Photos

 

Hard times for furniture stores

Ripple effect of sagging housing market causes demise of local outlets.

Posted: April 4, 2008 7:38 p.m.
Updated: June 5, 2008 5:02 a.m.
 
As a store manager for Granada Furniture, Joe DiVirgilio believes business at his Canyon Country furniture store has slowed down as a result of the current slump in the housing industry.

"There's no question about it," he said, referring to the effects of the "subprime problem" on furniture sales.

Now, after nearly 30 years in Santa Clarita, Granada Furniture is going out of business.

"We announced in January that we'll be out of here by the end of the summer," he said.

To clear out its inventory, the business has reduced its prices. Banners and painted windows outside hope to draw customers in.

Granada Furniture is one of the many local home furnishing stores that have been hurt by the sluggish housing sector.

"I think the slowdown of the housing market has definitely affected all retail that relies on it, including furniture," said Jason Crawford, the city's economic development manager. "It's unfortunate to see that happen."

The situation is not limited to the Santa Clarita Valley. Crawford points out that the struggling housing market's effect is visible in other areas, as well.

With nationwide chains like Wickes Furniture and Levitz Furniture going out of business, local branches, like the ones in the Santa Clarita Valley, will be closing.

Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., echoed Crawford's point and noted that there have been similar trends with furniture stores closing in Riverside.
"It's any area where there's a lot of home building," he said.

Kyser said that a "desirable area," like the Santa Clarita Valley's growing population and amenities create a market for furniture stores.

"There's the old phrase, 'retailers chase rooftops,'" Kyser said. "In the case of furniture, they were stampeding."

But along with both independent and corporate furniture stores, Kyser explained that businesses that sell appliances, building materials and, to some extent, garden supplies would also be impacted by the struggling housing industry.

As for why these retail markets are affected, Kyser said the purchase of a new home often requires landscaping, new furniture, window treatments and paint, among other things.

Kyser said consumers are also cutting back on spending in light of rising gasoline prices.

"In many cases, furniture is something you can put off to purchase," he said.

Before furniture stores and its related sectors can recover, Kyser believes the housing market needs to improve.

"It's going to take a stabilization and a real upturn in the housing sector before people start to feel better," he said.

Comments

Commenting not available.
Commenting is not available.

 
 

Powered By
Morris Technology
Please wait ...