Furniture manufacturer Angstrem began selling furniture showroom franchises

Major furniture manufacturers are looking for opportunities to expand their own sales after the departure of IKEA. So, Angstrem decided to launch a furniture showroom franchise, thus hoping to enter cities where the company is not yet represented. The pace of development of such projects may be negatively affected by the rise in cost of loans for small businesses, which are the main users of franchises, experts say.

Furniture manufacturer Angstrem has begun selling a furniture showroom franchise, the company told Kommersant. Today, as follows from the Angstrem presentation, potential partners are offered a “standard” format with a cabin area of ​​150 square meters. m. Investments in the opening of one facility are estimated at 3.55 million rubles, including a lump-sum contribution of 360 thousand rubles. Angstrem executive director Vadim Chernushkin noted that the franchise will strengthen its presence in the market and enter cities where the company’s salons are not yet represented.

Timur Irtuganov, General Director of the Association of Furniture and Woodworking Industry Enterprises of Russia (AMDPR), notes that franchises from furniture manufacturers are still rare, but are no longer isolated cases. According to him, this allows the company to increase production and sales in the face of a decrease in the average bill for furniture. Most buyers have lowered their requirements, for example, from “economy plus” to “economy,” Mr. Irtuganov points out.

Co-founder of Topfranchise.ru Viktor Bolshakov notes that interest in furniture store franchises is growing. In 2023, he clarifies, the number of applications to open such a business on Topfranchise.ru increased by 34% year-on-year and there may be a niche in the market for new projects. According to the expert, there are 59 franchises available in the category of furniture stores, kitchen showrooms and manufacturing, which is relatively small compared to other markets. Franshiza.ru expert Anna Rozhdestvenskaya points out that the supply of furniture franchises is growing, but “this is a rather specific segment,” where demand is mainly formed by entrepreneurs with experience in the industry.

According to Mr.Doors CEO Sergei Shikhov, the departure of some global players from the Russian market also played a role in the development of furniture franchising. He notes that the main demand is for franchises whose parent brands are ready to offer turnkey solutions. Previously, Mr.Doors focused on opening franchise salons in cities with a population of over a million, but now it is paying attention to cities with fewer residents, he adds. The Ascona company, which is also developing the franchise, did not provide a comment.

General Director of Infoline-Analytics Mikhail Burmistrov notes that after IKEA left Russia, the company’s share was evenly divided between furniture showroom networks, marketplaces, DIY retailers, and players have opportunities to increase their share. But, the expert notes, franchise development may be hampered by the poor availability of loans for small businesses and the shift in demand for furniture online. Managing partner of Vanchugov and Partners, Alexey Vanchugov, points out that during franchise development, partners from remote cities may not have time to sell out furniture from old collections and introduce new items, which creates risks of differences in the assortment between partner and own salons. In addition, franchise buyers may deviate from the retail prices recommended by the brand, warns Mr. Vanchugov.

According to AMDPR, in 2023, the volume of furniture production in Russia increased in physical terms by 34% year-on-year, to 67.5 million pieces, and in money terms by 25%, to 444.9 billion rubles. In January 2024, the figures increased by 47% and 28%, respectively. AMDPR explains the dynamics by the planned replacement of furniture in the secondary housing market and expects production to grow by 15–20% in the coming years.

Vladimir Komarov