"Furniture Industry Faces Challenges in Second Half, Continues Price Increases Amid Recession"

Hyundai Livart Furniture Prices Average 5% Increase on the 5th
Hanssem Plans 3% Price Hike Around Mid-Month

Hyundai Livart Smart Work Center exterior view.

The furniture industry has been raising prices one after another since the second half of the year. As the real estate market remains sluggish, companies are making every effort to increase profit margins.

Hyundai Livart raised prices by an average of 5% on some home furniture items such as dining tables and sofas on the 5th. This is the second price increase after raising prices by 5-7% on home and office furniture earlier this year. A Hyundai Livart representative explained, "The furniture items whose prices were raised this time are mostly popular products released 2-3 years ago," adding, "The initial selling prices were set before raw material costs increased." He continued, "Although costs have risen by 30% over the past three years, the price increases have been kept to 2-5% annually," and added, "This additional increase was unavoidable."

Hanssem also plans to raise prices on some home furniture items within this month. In February, Hanssem raised prices on major furniture such as mattresses and storage cabinets by 3-8%. A Hanssem representative said, "Price increases are inevitable due to rising labor costs for delivery and installation," and added, "A price increase of about 3% is expected around mid-month."

Starting with Ace Bed's price increase at the end of last year, Hyundai Livart, Hanssem, and Fursys have sequentially raised prices earlier this year. It is highly likely that furniture companies will continue to raise prices gradually in the second half of the year. IKEA Korea is currently reviewing whether to raise prices. Simmons and Shinsegae Casa have declared price freezes this year, but the situation may change depending on market conditions.

Furniture companies' performance has rapidly deteriorated this year due to the impact of the sluggish real estate market. Hyundai Livart posted an operating loss of 7.6 billion KRW in the first quarter. Hanssem also recorded an operating loss of 15.7 billion KRW. Both companies were profitable in the first quarter of last year but turned to losses this year.

It is widely expected that the second-quarter results will also remain in the red. According to the consensus (market average forecast) for Hyundai Livart's second-quarter performance compiled by financial information firm FnGuide, an operating loss of 1.1 billion KRW is expected, marking a turnaround to a loss compared to the same period last year. Hanssem is also estimated to post an operating loss of 7.4 billion KRW. Regarding second-quarter sales, Hyundai Livart is expected to see a 4.11% decrease to 345.3 billion KRW compared to the same period last year, while Hanssem's sales are projected to decline by 1.64% to 491.7 billion KRW.

The third quarter is also an off-season due to the rainy season and summer vacations, making performance improvement uncertain. However, the stabilization of raw material prices is a positive sign. According to statistics from the Korea Lumber Association, as of March, the price of Russian sawn timber was 465,000 KRW per cubic meter. The price, which soared to as high as 900,000 KRW per cubic meter in March last year, has dropped to about half that level. A furniture industry insider said, "Although raw material prices have stabilized, the key to performance improvement is the recovery of the real estate market," adding, "We hope for a recovery starting with the autumn moving season in October."

This content was produced with the assistance of AI translation services.