According to CSIL’s report ‘The European market for Office Furniture‘, the office furniture market in Europe is going through one of the most radical transformations among the subsegments of the furniture industry. One the one hand it is being conditioned by changes in traditional working standards and on the other by an unfavourable macroeconomic scenario, which makes the growth path of this sector more complicated than in the furniture business in general. Companies operating in this sector continue to find the need to adapt to the changing climate, either by differentiating its product portfolio, changing its target clients, or relying more on services.

The European production fell by about 1% at current prices if compared to the previous year. Despite the decrease, an inflationary effect is clearly still affecting sector performance in a positive way. Germany, Italy and Poland represent the top three manufacturing countries in Europe. While Germany and Italy observed moderate increases at current prices, Poland decreased by about 5% in 2023.

The trade balance however returned positive after 3 years of a negative trend. This can be explained because of reduction of office seating imports (especially from Asia-Pacific), which are returning to more sustainable levels after the years of remote working boom.

European consumption of office furniture decreased by almost 5% in 2023. The performance was mostly affected by the negative trend of imports, especially the imports of seating solutions from the Asia-Pacific region. Among the largest western European markets, Italy and Spain outperformed the others by posting a marginal increase, while Germany, France, and the United Kingdom observed a decrease.

In absolute values the market has returned to pre-pandemic levels after several years of oscillation and turbulence, while the industry still struggles. However, with traditional working environments being left behind and an uncertain economic climate ahead, companies and leading players in the sector are needing to find alternative paths to increasing sales and profits.

A NEW PATH FORWARD

One way in which the office furniture sector is changing is reflected in the priorities of offices themselves. Today, more importance is assigned to workspaces that encourage active collaboration and the informal exchange of views, with spaces for presentations, seating areas and break zones to foster conversation and discussion. At the same time, there is a parallel need for zones that facilitate concentration, eliminating distractions. This has led to a reduction in consumption of office chairs (ergonomic work chairs) accompanied by a huge expansion of soft seating in office environments. Acoustic Booths/Room in Room Systems are also booming.

Another way that companies have adapted to changing market conditions is observed when analysing changes in the target customers of office companies over the past 5 years. It is clear that the corporate segment (while remaining the main destination) partially declined compared to 2019, a similar trend has been registered by government offices and the small business. Instead, the non-traditional, but office-related destinations grew the most. Above all, the education segment and other contract destinations in general. Even the home office (which has been declining since the peak of the pandemic) today shows a market value that is more than double what it was in 2019.

For many years the operational activity of office furniture manufacturers was solely focused on enhancing industrial production and product volumes. However, in a situation of declining market demand, companies are concentrating their efforts on increasing the quality of their offerings and enhancing the level of customer service. Specifically, leading players are using a combination of design and technology that was unthinkable even just a decade ago. The materials used, the finishes, the fabrics, the assembly characteristics, all start from a conception aimed at sustainability and recycling of the products themselves, as well as possible reconditioning to extend their period of use.

In other words, companies are focused on bringing fewer, more sophisticated products but at a higher price. This is confirmed by the fact that the share of “third party products” on company turnover has been gradually increasing in recent years. This gives companies more flexibility, containing cost levels while expanding their product portfolio.

QUICK FACTS 2023-24

2023
• Assmann (DE) completed the takeover of Frem Group Screens Limited (UK), which under the name Spacemann, focuses
on room-in-room systems, acoustic walls and soft seating furniture.
• Maars Living Walls (NL), previously owned by MillerKnoll (USA), was acquired by the Private Investor Nimbus.
• UE Furniture (CN) opened a new factory in Romania, mainly for office chairs and other upholstered seating.
• Cassina (IT, part of Lifestyle Design group owned by Haworth) acquired the design manufacturer Zanotta (IT) from Tecno.
Bruynzeel Storage Systems (DE) acquired museum storage leader Delta Designs Ltd (USA).

2024
• WeDo Holding (IT) acquired the office seating specialist Sitland (IT).
• Bisley (UK) acquired a stake in MARK Product (UK), a company focused on chairs, soft seating and outdoor, with a strong
focus on sustainability.
• Flokk (NO) agreed to acquire Stylex (USA).
• Holmris B8 (DK) was purchased by private equity firm Mentha (NL). Subsequently, Holmris B8 acquired Holmris/Form-
Funk (NO).
• Two leading Belgian producers Pami and Robberechts will merge.

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Sources: CSIL’s Office Furniture Industry Reports. See at https://www.worldfurnitureonline.com/multiclient-research/office/