Kitchen furniture: flat market but huge investments
12 April 2011
A flat market can need more and not less investments. Maybe of a different kind.
In the European kitchen furniture sector the long term overall spending seems to have followed a negative trend, but while investments in machinery go down, there is an increasing expenditure in promotion and distribution.
There are the exceptions: Nobilia is still investing 20-40 million Eur per year for its two manufacturing plants.
Spending in promotion, distribution and marketing claims the lion’s share of investments for many companies, including for example Ballingslov (5% yearly investment in marketing the brands and launching new products) and SALM (target: from 3.7 to 4.0 salespeople for each franchising store).
Poggenpohl, Boffi, Fournier, Scavolini, Mostoles Industrial invest for a closer relationship among manufacturer and retailer. No more openings for Nobia during last year, but a lot was made during the previous years. Prestigious brands as Teisseire are bought from wealthy companies (Cauval). Others go on on the way of diversification (Demeyere, flat-pack, before kitchens and now textiles). Nobilia invests also in a multichannel strategy. Also to be mentioned investments on materials and components: surface materials, coverings, aluminium, engineered stone, glass, lights, small built-in appliances….Main issue: how to produce and sell “dream kitchens” at reduced costs.