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Affected by the Federal Reserve's interest rate hike, the chill in the US technology industry seems to have spread to the manufacturing and retail industries. Recently, American home furnishing giant MillerKnoll announced its third-quarter results for fiscal year 2023: the company achieved consolidated net sales of US$984.7 million, a decrease of 4.4% compared with the same period last year. It can be seen that its sales have decreased significantly and its profits have fallen. Accordingly, in order to further reduce costs and improve operational efficiency, MillerKnoll announced at the same time as announcing this performance that it would cease operations of its home furnishing brand Fully. Amazon's home furnishings store Fully will cease operations
It is learned that according to foreign media reports, MillerKnoll recently announced that it will stop operating the home furnishing e-commerce brand Fully as an independent brand at the end of April. Currently, Fully’s homepage is selling remaining stock at a half-price discount, the lowest discount ever. At the same time, it was observed that some of the products sold by Fully on Amazon are also in the status of "currently out of stock" . It is worth noting that according to MillerKnoll, the closure of the Fully brand is expected to cost it US$37.2 million (approximately RMB 255 million) . It is learned that Fully was founded in 2006. The original company name was ErgoDepot, and it was later changed to Fully in 2016. After experiencing several acquisition storms, Fully became an independent e-commerce brand under its parent company MillerKnoll in 2021. Its main products are ergonomic office furniture, such as standing desks and ergonomic chairs, which are not only popular among American consumers, but have also been listed on the Best Sellers list of Amazon US many times. However, in the context of high inflation and cost crisis, Fully did not seem to escape the impact of a sharp decline in consumer demand, and its operations ran into problems. It is observed that to this day, the latest post on its Twitter social media account, which has thousands of followers, is still on November 9, 2022. According to industry insiders, its parent company MillerKnoll had actually begun to decline as early as 2021. Prior to announcing that Fully would cease operations, MillerKnoll also revealed in early April that it would close its furniture manufacturing plant in Sheboygan, Wisconsin, and would begin layoffs of 162 employees from May 23 to June 5 to help the company better integrate resources. But overall, from frequently appearing on Amazon's BS list in the past to its current cessation of operations, Fully's decline is still regrettable. However, under the fatal impact of weak global demand, Fully's collapse is not an isolated case. Home furnishing industry sees a "wave of closures"
It is learned that according to industry insiders, due to factors such as high inflation, skyrocketing costs and the prevalence of price wars, since 2022, a number of well-known home furnishing retailers have applied for bankruptcy reorganization one after another. By the end of 2022, home furnishing e-commerce platforms Brosa and Made.com had already fallen into bankruptcy: - In November 2022, the British home furnishing e-commerce platform Made.com entered bankruptcy management procedures. It owed huge debts when it was shut down, and there were still 12,000 unfulfilled orders in the UK and other parts of Europe.
- On December 14, 2022, Brosa, a well-known home furnishing e-commerce platform, entered bankruptcy management procedures and held a "bankruptcy sale" on its official website. When it was shut down, there were still unfulfilled orders worth about US$10 million.
As of 2023, the crisis is still spreading in the home furnishing industry. On February 8, American home furnishing giant NBG Group filed for Chapter 11 bankruptcy proceedings. According to its bankruptcy notice, NBG had debts of up to US$500 million when it shut down , and the top 30 creditors involved as many as 23 Chinese companies. In early January, American home furnishing retail giant Bed Bath & Beyond said in a regulatory filing that due to the continued deterioration of its financial condition, there are significant doubts about the company's ability to continue operating, and it will consider filing for bankruptcy as a strategic option. However, it is worth noting that, unlike the other home furnishing giants mentioned above, 3B Home Furnishing has not yet officially entered the bankruptcy management process, but is seeking to get out of the bankruptcy crisis by selling assets or raising funds from existing creditors. As of April, 3B Home had raised approximately $48.5 million by selling 101 million shares, but still failed to resolve the bankruptcy crisis. Overall, since the end of 2022, the home furnishing industry seems to have been swept into a flood of bankruptcies. The reasons for this are, on the one hand, high inflation and declining consumer demand for higher-priced home furnishing products have led to a slowdown in the performance growth of home furnishing giants. On the other hand, after the benefits of the epidemic have disappeared, the large amount of stockpiled inventory has become an operating burden. In order to ease the pressure on cash flow, the home furnishing industry has launched a fierce competition of low prices, which has greatly reduced profit margins and even caused "insufficient income to cover expenses." However, what is surprising is that despite the downturn in this industry, Amazon is still going against the trend and its market share in the home furnishing industry continues to grow. According to the 2022 home furnishings market report by market research firm YipitData, US home furnishings retailers such as Walmart and Target have fallen into difficulties due to inflation, economic recession and declining consumer demand, but Amazon's market share has increased significantly: From January to October 2022, Amazon's share of the US home furnishings market increased by 2.34% year-on-year to 86.13%. There is no doubt that the home furnishing industry is now in a stage of fierce competition and the market is at a low point. How to adapt to the laws of market development, accumulate survival advantages, and wait for the next opportunity for explosive growth like Amazon is an issue that cross-border sellers urgently need to consider. What do you think about this? Welcome to discuss in the comment area~
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