Furniture of soft power – Newspaper Kommersant No. 211 (7412) dated 11/15/2022

Furniture of soft power - Newspaper Kommersant No. 211 (7412) dated 11/15/2022

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The reduction in the activity of foreign furniture suppliers in the Russian market stimulates local players to expand their business more actively. Thus, the manufacturer of cabinet furniture Mr.Doors decided to start producing beds, sofas and poufs in the premium segment. The development of this direction is also considered by Angstrem. Russian companies have the potential to develop in the segment, but the process will be complicated, among other things, by a lack of specialists and problems with the delivery of materials.

Mr.Doors, a cabinet furniture manufacturer, will manufacture upholstered furniture by the end of 2022: beds, sofas, and pouffes in the premium segment. Kommersant was told about this in the company itself. The new line will be produced at factories in Kostroma and Malakhovka, Moscow Region, whose capacities may be increased. In addition, Mr.Doors is considering acquiring premium decor and furniture factories, a company spokesman says. Mr.Doors plans to invest over 100 million rubles in business expansion.

Mr. Doors founded in 1996 by Maxim Valetsky. In addition to factories, it includes a network of furniture stores, some of which operate on a franchise basis. In 2021, the revenue of Mr. Valetsky’s Furniture Plant No. 7 LLC increased by 30%, to 2.4 billion rubles, net profit increased almost seven times, to 37.49 million rubles.

Leyla Pavlova, a partner at the consulting agency Between2countries, points out that the premium segment of upholstered furniture in Russia is mainly represented by products from Italy and Germany, and local manufacturers usually work in the price segment no higher than the average. One Story partner Olga Sumishevskaya clarifies that more than 50% of the products of local manufacturers are in the economy segment. According to the Association of Furniture and Woodworking Enterprises of Russia (AMDPR), upholstered furniture accounts for about 7.5% of the range of local companies. Last year, the production of upholstered furniture grew by 11% year-on-year, according to AMDPR.

Mr.Doors explains the decision to enter a new segment by reducing the number of foreign players in the Russian furniture market, including in the premium segment. According to Mikhail Burmistrov, General Director of Infoline-Analytics, in the context of limited supplies from Europe to Russia, competition in the upholstered furniture segment has decreased, which attracts Russian companies.

Vadim Chernushkin, executive director of Angstrem, says that the company also plans to expand the production of sofas and armchairs. But, he notes, plans may be complicated by a shortage of specialists in this area. Leyla Pavlova also points to possible problems with logistics due to overloading of ports in China, from where a large volume of components for upholstered furniture is supplied. Mr. Chernushkin notes that Angstrem buys fabrics in China, and purchases foam rubber and mechanisms in Russia. AMDPR General Director Timur Irtuganov says that local fabric suppliers cannot provide the required assortment and sales volume.

Mikhail Burmistrov adds that Mr.Doors plans to develop a line of upholstered furniture in the upper price segment against the backdrop of the departure of part of the solvent population from the country, a decrease in demand for housing and the absence of a strong brand in the category do not look the easiest. According to Olga Sumishevskaya, the furniture market in Russia has faced a reduction in demand and the average check due to savings from consumers who mainly purchase inexpensive household goods. “Buyers postpone the purchase of furniture until better times or opt for cheap goods,” confirms Mr. Irtuganov.

According to the pessimistic estimates of AMDPR, furniture production in physical terms in 2022 may be reduced by 4-5%. In addition, competition in the market may increase again. According to Leyla Pavlova, companies from Turkey and Iran are interested in the Russian furniture market.

Alina Savitskaya

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