Industry News
This section provides the very latest office furniture news not only from the UK, but from around the world. Our office furniture news section will keep you abreast with the latest happenings in the office furniture market. If you want to know about bids invitation from major clients, latest profitability and sales figures of leading furniture manufacturers and designer companies, published strategic plans of your competitors, openings, relocations and closure of furniture manufacturing plants, and much more, don’t miss our office furniture news section.
Herman Miller “Most Admired” Company
Tuesday 9 March 2010
Herman Miller was once again named a “Most Admired” company by Fortune magazine, marking the 21st time in 23 years that the Michigan–based office furniture manufacturer took the laurel over its respective Home Equipment and Furniture industry. Herman Miller, with a total score of 6.39, also ranked first among its industry in innovation and social responsibility. A spokesman for the company said “The Most Admired recognition is important to us,, particularly because we've sustained the top ranking over so many years. It's also a unique form of peer recognition because the survey participants are the executives and board members of the industry itself, along with third party analysts and experts. Finally, it's a source of shared pride across Herman Miller--we're committed to problem-solving excellence and creating the best solutions for our customers and we couldn't make this happen without the dedication of all our employees, across our entire business,” comments representatives of Herman Miller. “This achievement belongs to all of those who demonstrate the values that drive our business and accomplish the goals we set for ourselves every year.” Two of Herman Miller’s competitors, Steelcase (No. 6 with 5.76) and Muscatine, IA –based office furniture manufacturer HNI (No. 9 with 5.58), also appeared on the list, which Fortune describes as “the definitive report cars on corporate reputations.” Fortune’s annual Most Admired List, in cooperation with the Hay Group, sorts the top foreign companies operating in the U.S. by industry, representing the 10 largest in each. Over 600 companies in 33 countries were surveyed. The Most Admired feature will be published in Fortune’s March 22 issue.
Inscape sales drop 21.7% in latest quarter
Friday 5 March 2010
Inscape Corporation Thursday reported sales for the third quarter of fiscal 2010 were $CAN 17.9 million, 21.7% lower than the same quarter of fiscal 2009. Year-to-date sales of $CAN 52 million were 17.4% behind the same period of last year. The results reflect the contraction and pricing pressure being experienced in office furniture businesses. Without the benefit of gains from the U.S. currency hedge contracts, sales in the third quarter would have declined 23% and the year-to-date sales would have been down by 21%. The third quarter of fiscal 2010 which ended on January 31, 2010 had a net income of C$0.1 million or 1 cent per share compared to a breakeven result in the same period of fiscal 2009. The quarter included an expense accrual of $0.5 million contractual benefits relating to the resignation of former Chief Executive Officer, which was announced in November 2009. The third quarter's gross margin as a percentage of sales was 29.6% compared to 23.6% in the same quarter of last year. Year-to-date gross margin rose from last year's 23.5% to current year's 26.7%. While the gross margins were depressed by pricing pressure and unfavourable overhead absorption resulting from lower sales volumes, the negative factors were more than offset by gains in currency hedges, reductions in fixed overheads and improvements in variable production costs. The third quarter also benefited by the C$0.1 million reversal of asset retirement obligation discussed in the previous paragraphs. This non-recurring item contributed 0.9 percentage points to the third quarter gross margin and 0.3 percentage points to the year-to-date gross margin. The third quarter's SG&A expenses were C$0.3 million or 5.5% lower than the same quarter of last year. The variable selling expenses were C$0.5 million lower resulting from lower sales volumes. The fixed SG&A expenses were $0.2 million higher because of the C$0.5 million contractual benefit expense accrual for the former Chief Executive Officer. With the exclusion of this unusual item, the fixed SG&A would be $0.3 million lower than the same period of last year due to various cost control measures. As a percentage of sales, the third quarter SG&A was 29.1%, compared with 24.2% in the same quarter of last year because of current year's lower sales volumes and the contractual benefits accrual. Year-to-date SG&A expenses were C$2.3 million less than the level a year ago. $1.2 million of the decrease related to variable selling expenses and $1.1 million were savings from fixed overheads. As a percentage of sales, SG&A increased from last year's 27.7% to current year's 29.0% mainly due to lower sales volumes. The quarterly interest income was comparable to the income earned in the same quarter of last year. On a year-to-date basis, current year's interest income was less than prior year's records because last year's yield on investments started to decline only after the first quarter. "We are pleased with the modest return to profitability in the third quarter," said Madan Bhayana, Chief Executive Officer of Inscape. "Sales levels remain depressed as the industry continues to experience widespread reductions in demand. Our employees and business partners continue to rise to the challenge of improving our business processes while at the same time streamlining our cost structure. In spite of the challenging sales environment, we generated positive cash flows from operations which allow us to make financial investments that continue to elevate our products to the highest possible quality levels. "During the quarter, we purchased our New York State based manufacturing facility where our wall products have been manufactured for the past 12 years. In addition to the substantial economic benefits supporting this purchase, there are substantial strategic benefits as the Company continues to expand its market position in the moveable wall segment of our industry. Our Wall division has been awarded substantial contracts for US government facilities where there is a growing need for our flexible, sustainable and cost effective moveable wall solutions. The year-to-date nine-month period ended January 31, 2010 had a net loss of C$1.3 million or 9 cents per share compared to last year's net loss of C$0.3 million or 2 cents per share. Current year-to-date results included an unrealized U.S. currency translation loss of C$0.6 million whereas last year's results included an unrealized U.S. currency translation gain of V$1.3 million. When the unrealized exchange loss and gain are excluded from both periods, current year's net loss would be C$0.7 million compared to last year's net loss of C$1.6 million. We expect that sales for the fourth quarter of fiscal 2010 will be slightly lower than the third quarter of fiscal 2010." said Bhayana. At the end of the quarter, the company remained debt free and had cash and cash equivalents of $5.8 million and liquid short-term investments of $15.1 million. The decrease in cash and cash equivalent balance of about $3.3 million from the level at the end of the second quarter was mainly attributed to the purchase of the Falconer plant in New York State. The company does not expect significant change in the current working capital requirements in the near-term. The cash position and credit facility provide the company necessary capital resources to develop new products, meet all other expected financial requirements, and support business growth and acquisition opportunities.
Around 50 jobs to go at Senator
Thursday 4 March 2010
AROUND 50 jobs are set to go at Senator in Altham, Lancashire which has been hit by a downfall in businesses ordering office furniture. Bosses at Senator International said around five per cent of the workforce of just over 1,000 people will be made redundant. The group said a drop in order during a normally busy period had led to the announcement. Staff were told about the redundancies on Tuesday and were meeting with management yesterday as a 30-day consultation began. Paul Clarke, commercial director, said: “The first three months of the year are usually a busy time but nothing is happening at the moment. “In the current climate office furniture isn’t totally necessary. It’s like a new kitchen or work on your own home, you can usually hang on another year.” “We are confident of the future for its remaining workforce and the many local suppliers who manufacture a large proportion of its componentry . “These measures, as unpalatable as they are, will result in a more secure future for the company and its employees.”
Do flame retardants prevent fires while harming our health?
Tuesday 23 February 2010
When we think of flame retardants, generally fire safety comes to mind. However in the case of polybrominated diphenyl ethers, widely used flame retardants in the United States, the safety issue may have more to do with humans and animals being exposed to the toxic chemicals contained in the flame retardants themselves. PBDEs have been used in things like mattresses, couches, televisions, computers and even toasters. There are three commercial forms of PBDEs, two of which have already been banned in Michigan. The last remaining form is deca-BDE. While it’s been used successfully to prevent or reduce the spread of fires, it’s also on the U.S. Environmental Protection Agency’s list of “potentially carcinogenic chemicals,” due to a study in which lab rats that ingested deca-BDE developed liver tumors. Deca-BDE has also been shown to disrupt thyroid function, and have reproductive, developmental and neurological consequences. Even worse, deca is bio-accumulative, meaning that it doesn’t break down in our systems, it just continues to increase. Studies have shown that levels in humans have been doubling every three to five years. Many scientists are comparing deca-BDE to the PCBs used in adhesives, paints and lubricants that were outlawed in the 1970’s, but are still a major source of contamination in Lake Michigan today. While PBDEs are used in our electronics and furniture, unfortunately they don’t stay put. They’ve ended up in our food supply, and have been found in the highest concentration in foods containing animal fats. Scientists have found PBDEs in house dust as well. Deca-BDE becomes airborne, lurking in the air molecules when our television gets turned on and heats up. In mattresses, the dust releases into the air that we inhale while we sleep. One of the most alarming places these flame-retardants have been found is in breast milk. According to a Clean Water Action report, in the United States, “PBDEs have been found in breast milk of women at levels 10 to 100 times higher than those found in Europe.” Danger to our Children Experts believe our children are most at risk for deca-BDE toxicity because their systems are more delicate than adults, causing them to absorb more of the toxic chemicals. In a study published by the Environmental Working Group, levels as high as 114 parts per billion were reported in children, and levels in children were up to three times higher than those of their parents. In an article for WebMD, Linda Birnbaum, PhD, senior toxicologist with the EPA who reviewed the study states, “I think this study raises a red flag.” What’s being done? Michigan State Representative Deb Kennedy has re-introduced a bill this session to phase out deca-BDE. House Bill 4699 would phase out the manufacturing, distribution and sale of mattresses, upholstered furniture, televisions and computers in Michigan that contain deca-BDE. One change to the bill from last session is that if a manufacturer can make a case that deca-BDE is necessary in their product, they could apply for an exemption to the ban. If this bill passes, Michigan would be one of the first states to ban deca-BDE, with Washington being the first, and Maine, Vermont and Oregon following suit. The Michigan Association of Fire Chiefs, along with the International Association of Firefighters, supports bills that phase out PBDEs. The EPA has also been negotiating with two United States producers and one foreign producer of deca-BDE, who have voluntarily committed to end their production of the chemical in the next three years, phasing out their use in electronics by 2011. This phase-out does not include situations in which deca-BDE is manufactured overseas and arrives in the United States already in a product, such as a television. Since the vast majority of items on store shelves in the U.S. are imported, this could be a major loophole.
Outlook: US office furniture industry will grow again in a year
Monday 22 February 2010
The US office furniture industry should return to sales growth again in a year, after posting a further — albeit much more moderate — decline in 2010. The newest outlook from the Business and Institutional Furniture Manufacturers Association projects a 3.8 percent decline in North American shipments this year, to $7.55 billion. Quarterly shipment declines will steadily ease throughout the year before growth returns in the first quarter of 2011, according to the updated outlook from the Grand Rapids-based BIFMA, prepared by Global Insight. The outlook projects what BIFMA Executive Director Tom Reardon calls a “fairly healthy” 7.4 percent rebound in shipments in 2011, to $8.08 billion, halting the decline that began in late 2008. When complete, the downturn will have cost the industry nearly $4 billion in annual shipments in North America, or more than one-third of 2008’s sales volume. “That turnaround can’t come soon enough,” Reardon said. “We’re going to be bouncing along in this bottom for four quarters, but now there’s light at the end of the tunnel. We have something to look forward to.” The office furniture industry finished 2009 with North American shipments of $7.84 billion, according to BIFMA, down 29.7 percent from the $11.16 billion of 2008.
BBC spending watchdog pays more than £3m of public money on its own London offices
Sunday 21 February 2010
The regulator that checks BBC spending has paid out more than £3million for its own new offices, it was revealed today. The new base for the BBC Trust is a stone's throw from the broadcaster's headquarters and has been styled by interior designers and equipped with a video wall to give glamour to its entrance hall. It has a specially soundproofed office for the Trust's chairman Sir Michael Lyons to protect the privacy of his meetings. £3m office cost: BBC Trust boss Sir Michael Lyons recommended in 2004 that public sector offices should be moved out of London The spending on the offices in an Edwardian building close to Broadcasting House totals £3.2million - a cost of more than £70,000 for each of the 45 employees of the watchdog who will work there. Sir Michael has chosen accommodation in one of central London's most expensive areas in defiance of his own advice to Gordon Brown that both public regulators and BBC departments should shift out of London to save taxpayers' money. In 2004 a report for the then Chancellor by Sir Michael said that moving public sector offices out of London could save £2billion a year. His recommendations were that the Government should look at 'dispersal opportunities' for the BBC and that the legitimacy and independence of watchdog bodies would be improved if they moved to cheaper locations in the provinces. The BBC Trust, which is governing body as well as regulator of the BBC, has been under fire from both the Government and opposition politicians over its perceived lack of independence from the Corporation. Culture Secretary Ben Bradshaw has called it a 'cheerleader' for the Corporation and Tories - who believe the Trust's failings were shown up by the Sachsgate scandal when Jonathan Ross and Russell Brand left obscene messages on an elderly actor's answerphone - are likely to scrap it if they win the election. The new row over the Trust's accommodation arrangements comes as the National Audit Office prepares to publish a scathing report on the way the BBC spent £813million refurbishing Broadcasting House. It will look at how the project came to run two years late and £20million over budget. Auditors are also likely to consider whether it was value for money to spend £25,000 on a remote control helicopter flight to film the building as part of a £3.9million 'celebration' of Broadcasting House. The Trust's new offices in Great Portland Street have been decorated on the advice of interior designers Overbury on a theme that depicts antique radios and a gramophone. A black-and-white photograph of Broadcasting House covers an entire wall. United: Both Culture Secretary Ben Bradshaw (left) and his Tory counterpart Jeremy Hunt have been critical of the BBC Trust The £2.2million cost of renting the offices for eight years was pushed up by a further £1million spent on decorating and fitting out the building. Some £250,000 went on interior design. Tories were scathing about the move yesterday. Shadow Culture Secretary Jeremy Hunt said: 'This is a ridiculous situation and one that is costing licence fee payers yet more money. 'The BBC Trust is supposed to ensure we get value for money, something that has clearly not happened here. What with this and reports of massive overspending on buildings, the whole of the BBC needs to get a grip.'
HNI sales down 35.2% and announce Loss In Q4
Wednesday 10 February 2010
HNI (Hon) reported a loss for the fourth quarter due to a decline in sales across segments. The net loss attributable to parent company was $10.77 million or $0.24 per share, compared with a net income of $8.51 million or $0.19 per share a year-ago. Non-GAAP net income per share was $0.26, compared with $0.45 last year. Net sales for the quarter declined by 35.2% to $413.67 million from $637.94 million a year-ago. Four Wall Street analysts estimated revenues of $418.48 million. Segment-wise, office furniture sales declined to $328.45 million from $512.83 million, while hearth products sales declined to $85.22 million from $125.11 million a year-ago. Selling and administrative expenses declined 16.5% to $135.42 million from $173.06 million in the year-ago period. Restructuring and impairment charges were higher at $27.04 million, compared with $21.51 million in the year-ago period. Year-to-date net loss attributable to parent company was $6.44 million or $0.14 per share, compared with net income of $45.45 million or $1.02 per share a year-ago. Non-GAAP net income per share declined to $0.70 from $1.46 in the year-ago period. Net sales for the year declined to $1.65 billion from $2.47 billion in the year-ago period. Street estimated earnings of $0.55 per share on revenues of $1.66 billion.
Kimball's Q2 Sales Slip 16% YoY
Saturday 6 February 2010
Kimball International today reported second-quarter fiscal 2010 net sales of $275.2 million and net income of $1.9 million. For the period ended Dec. 31, sales were down 16% and profits were down 75%. The net income included $2 million of after-tax income from a settlement related to an antitrust class action lawsuit. Kimball took $200,000 of after-tax restructuring charges during the period. Net sales were flat at $166.9 million in the electronic manufacturing services (EMS) segment. Gross profit as a percent of net sales improved year-over-year. The net income rose to $2.67 million, from a loss of $709,000 last year. Net sales to customers in automotive were higher, but industrial control and public safety lagged. The class action settlement involved alleged illegal price-fixing of electronic components by a Kimball supplier. In a press statement, chief executive and president James C. Thyen said, “Our EMS segment continued its trend of sequential quarterly sales and margin improvement. We have seen encouraging signs of stability for our EMS segment as evidenced by increased customer demand as well as recent new business wins.”
Haworth's sales declined 32% to $1.11 billion in 2009
Friday 5 February 2010
Haworth Inc. followed the rest of the office furniture industry in 2009, recording a 32.7 percent sales decline. The Holland-based Haworth this morning reported 2009 global sales of $1.11 billion, which compares with $1.65 billion in 2008 and $1.66 billion in 2007. The results “reflect the economic crisis experienced by the entire industry,” Haworth President and CEO Franco Bianchi said. "2009 was certainly a challenging year for the industry and for Haworth," Bianchi said. Even with the difficult economy, Haworth was able to improve market share in North America in 2009 and launched several new products globally, Bianchi said. The company last year also strengthened lean manufacturing practices and further integrated global operations, and is developing new products for introduction in 2010, he said. The family-owned Haworth, as it scaled back operations to match "a market that was in severe contraction," was able to maintain a strong financial position, Bianchi said. As the U.S. economy shows signs that it's slowly improving, Haworth is "very well" positioned for any rebound in business that may occur this year for the office furniture industry. "We've been busy trying to, at the same time, prepare a strong foundation for the future," Bianchi said. "2010 will be a little easier, but it will be tough."
Knoll sees sequentially weak Q1
Thursday 4 February 2010
Office furniture maker Knoll Inc posted better-than-expected fourth-quarter results, but said its first quarter will be sequentially weaker. "We expect improvement in demand in 2010 to be back-half loaded," Chief Executive Andrew Cogan said on a conference call with analysts. Cogan said Knoll was seeing a greater pool of project activity than a year earlier, but added that most of it was not expected to have any effect on its results in the first half of 2010. He said gross and operating margins will continue to be under pressure until the company sees some improvement in demand. Knoll, along with peers such as Steelcase Inc (SCS.N) and Herman Miller (MLHR.O), has been hit by weak demand, high office vacancies and corporate downsizing, resulting from the weak economy. According to latest industry data provided by Business and Institutional Furniture Manufacturers Association (BIFMA), office furniture orders in December were down 12 percent, while shipments fell 20 percent. Orders and shipments are expected to drop 2.3 percent and 4.6 percent, respectively, in 2010, according to BIFMA. Knoll said backlog improved sequentially for the first time in six quarters, due mainly to its recently launched Generation work chair. Backlog was $153 million at the end of the fourth quarter, up 26 percent from the third quarter. Net income for the quarter fell 82 percent to $4.0 million, or 9 cents a share, from a year ago. On an adjusted basis, the company earned 14 cents a share, while net sales fell 33 percent to $183.9 million.Shares of the company were trading down 13 cents at $11.52 Thursday on the New York Stock Exchange
Medical Board president sued over teen's death
Tuesday 2 February 2010
CHARLESTON, W.Va. -- John A. Wade, a Point Pleasant physician, faces a lawsuit alleging that he was responsible for the death of 17-year-old Andrya Lynn Jordan, who died when a filing cabinet crushed her. The lawsuit against Wade, who is president of the West Virginia Board of Medicine, could go to trial later this year. Jordan, the lawsuit states, "was killed while she was loading a file cabinet with medical files when the cabinet tipped over, fell on her, pinning her against a white vehicle resembling a jeep parked near the file cabinet." Jordan was filing papers for Wade's medical practice in a "remote/garage storage building," said the lawsuit filed by Lori McCoy, Jordan's mother. The lawsuit, filed in Mason County, also names Steelcase Inc. -- that designs, manufactures and distributes file cabinets -- as a defendant. When she died on Nov. 26, 2006, Jordan was a junior at Point Pleasant High School who had been working for Wade since July. The lawsuit McCoy filed on Nov. 20, 2009, alleges that Wade failed to install the file cabinet properly and failed to train Jordan how to use it safely. Jordan, who was 5 feet 2 inches tall, was crushed by a file cabinet that was 5 feet 5 inches tall, the lawsuit says. The lawsuit also alleges that Steelcase "knowingly" designed and sold a file cabinet that "was unsafe and had design defects." Steelcase, the lawsuit states, failed to provide users with proper instructions telling them "to fasten the file cabinet to prevent tipovers, to load from the bottom drawer up and to open one drawer at a time."
Steelcase restores pay for white collar workers
Friday 29 January 2010
Steelcase workers have reason to celebrate. The company is reversing pay cuts it made as a cost saving measure last year. Company President, Jim Hackett informed employees Thursday. Steelcase cut pay for executives and white collar workers by 5%-12%. The across the board pay cuts were the first in company history. Steelcase employees more than 13,500 people worldwide.
Prestigious American design awards for Ahrend
Thursday 28 January 2010
Two products from furnisher Royal Ahrend have received a ‘Good Design Award’ from the Chicago Athenaeum Museum of Architecture and Design: the Ahrend 360 chair, designed by FLEX the INNOVATIONLAB, and the Ahrend p h i l i n k table, designed by Voet Theuns Architects. The ‘Good Design Award’ of the Chicago Athenaeum Museum of Architecture and Design is generally regarded as one of the world’s most prestigious awards for new products and graphic design. The Athenaeum awarded prizes in more than twenty different categories. Ahrend won its awards in the Furniture category.
January 2010 survey of the US Office furniture industry
Wednesday 27 January 2010
The January 2010 Mike Dunlap survey of the US office furniture industry trends which measures and quantifies the performance of the Office Furniture Industry has just been published. It presents a series of contradictions. • Gross Shipments have improved, but Order Backlog has declined. • Employment is steady while Hours Worked has increased above 50.0 for the first time since October 2008. • Capital Expenditure and Tooling Expenditure declined significantly in the 4th Quarter of 2009. • New Product Development has increased significantly. • Raw Material Costs and Employee Costs have risen significantly, but not to alarming levels. • The Personal Outlook Index remains below 50.0, but with little change from the October 2009 Survey. The largest perceived threats to the industry’s success are the economic issues and the global decline in demand for furniture. Price reductions, energy costs, healthcare costs, imports, and overcapacity, and taxes are most frequently cited. Smaller manufacturers (under $50.0 Million in Annual Sales) appear to be performing somewhat better against the larger (over $500.0 Million) in regards to sales and tend to be more optimistic. Survey Respondents do not agree with the Global Insight / BIFMA International forecast that shipments in 2010 will decline by 4.6% compared to 2009. 42.6% Respondents predict in increase by 0.1% to 5.0% Only 21.3% of the respondents predict a decline in 2010.. Economic recovery in this industry will be slow and long. We remain optimistic that the industry has “bottomed out” and that we expect modest recovery through 2010 and into 2011.
Row over Irish Aviation Authority's 300,000 Euro office revamp
Monday 25 January 2010
A dispute has broken out between the embattled Irish Aviation Authority and an office furniture supplier over the refurbishment of the authority's new offices on D'Olier Street in Dublin, Ireland In a recent address, the CEO of the IAA, Eamonn Brennan, said the Irish aviation industry was "experiencing the most challenging and difficult conditions in the history of aviation''. However, documents seen by the Sunday Independent reveal that this has not sparked any outbreak of fiscal rectitude when it comes to the fittings and furnishings of the authority's new offices. Instead, when it came to the tendering process, the authority is believed to have chosen a price that was significantly higher than a comparable bid from the Irish furnishing company Farrell Brothers. Responding to its failure to secure the contract, the company, which employs 100 workers, claimed that "we understand Farrell are €100,000 cheaper than the preferred supplier whilst meeting all your specifications''. They added that "given the prevailing economic conditions, we are fighting very hard for any business and this was reflected in the aggressive level of discount we applied to your project''. In a separate internal communication, a senior company figure claimed that their tender had been 30 per cent less than that of the preferred bidder and that another company had failed to secure the €300,000 job "despite the winning contract being 25 per cent dearer overall''. The communication included a stinging attack on the IAA as the figure claimed "over €100,000 is being wasted by a semi-state body on imported products which could be sourced in Ireland and would support our local economy''. It is believed that, in contrast, the winning company currently employs only two people in Ireland. The email from the losing contractor adds: "If I was given the task of sourcing a product for my employer, received five quotations, eliminated the cheapest ones then viewed the two remaining ones and bought the most expensive one, I would be fired." Speaking to the Sunday Independent, the Fine Gael transport spokesperson Fergus O'Dowd said: "It is a disgrace that in a scenario where an indigenous Irish company actually puts in the lowest tender they are not awarded the contract. In these straitened times we need value for money rather than comfort chairs for bureaucrats. "Stories such as this suggest it is time our disappeared Minister for Transport instituted a significant review into the procurement practices for semi-state companies.'' However, a spokesperson for the IAA said the authority had engaged in a "stringent, transparent and objective tender process'' which had been endorsed by "external legal advisers''. The spokesperson also said that "the quoted price differential was incorrect'' but added that some of the defeated tenders were cheaper than that of the successful company.