Furniture makers relying on exports
Greek furniture manufacturers– one of the sectors experiencing a steady decline due to the combination of increased competition and shrinking demand — are desperately looking for new opportunities that will help them stay afloat.
According to the Hellenic Statistical Authority (ELSTAT), turnover in the sector dropped by 22.7 percent in the August 2010 – July 2011 period compared to the same period in 2009-10, which had seen an added drop of 13.6 percent.
The Fourlis Group, which among other activities is involved in developing the IKEA homestore network in the region, is looking to foreign markets in order to boost its capital. Following the recent inauguration of an IKEA store in Bulgaria (an investment worth 60 million euros), it is clear that the group?s target to have 10 stores in Greece, Cyprus and Bulgaria by 2012 will be reached. Meanwhile, Fourlis has also invested 40 million euros in a 50 percent share of a mall to be built by the Danaos company in Sofia.
Varangis has also turned its attention abroad by investing in its own diversification. In September, the listed company established a firm in Doha specializing in internal design and building equipment, while it is about to complete a project worth 1.6 million euros in Oman. Varangis?s position continues to be negatively influenced by its exposure in the Greek market, while management expects the situation to get worse and is therefore focusing on exports for the next few months.
With sales down by 60-65 percent in comparison to 2008, Dromeas is another company that has turned its attention to international markets, with one project in the works for CERN (the European Organization for Nuclear Research) since March. It is also continuing to work with the European Union, which has brought it a 3 percent hike in sales abroad in the first six months of this year, in comparison to a 32 percent decline in domestic turnover. Servicing its debts is now Dromeas?s chief concern, while its administration has said that it may have to renegotiate the terms of its loans.
SATO has restructured its network of stores in order to cut its operational costs, while also investing in the homeware chain Entos in an effort to gain a larger chunk of the domestic market through an aggressive pricing policy. However, rapidly declining demand does not bode well for the company, which is now seeking ways to utilize its real estate assets.
In contrast to the prevailing trends, Neoset is investing in the domestic market with a restructuring of its retail network and the introduction of new stores promoting a different philosophy that includes bringing the kitchen and home furnishings departments together. The company has further launched a number of new products and invested significantly in advertising.
