The retail furniture industry is in growth mode, and this company has developed a diversified “omnichannel” revenue stream that produces profits of nearly double the industry average. Named after the trendy resort town in Oregon where it’s based, the company is offered for sale to qualified buyers exclusively by Raincatcher.
The US furniture and home furnishings market has historically been a massive, +$100 billion industry that tracks with the overall housing sector. As new housing units are constructed and vacancy rates decline, the furniture market is surging because homeowners naturally want to furnish their new residences. In 2016 the retail furniture market posted over $105 billion revenue, according to the market analysis firm First Research.1 As the US housing market is expected to continue its robust growth in 2017-2020, the furniture and home furnishings industry is expected to post double-digit revenue gains over the same period.
The headwind facing all “brick and mortar” retailers including the furniture industry is the Amazon.com factor. Chain stores in all sectors from grocery to fashion are urgently updating their strategies to defend against the continued growth of pure-play ecommerce competition. The company examined these market conditions and designed their innovative omnichannel model to compete in ways that Amazon and others cannot. It consists of the following four diversified revenue streams:
1. Professional Services — the sale and rental of whole-house furniture solutions to professionals in real estate, corporate, and income property housing fields;
2. Pre-Owned furniture — trade-in allowances and resale of preowned goods, including a program to take away and replace all furniture in a house for income-property owners;
3. E Commerce sales via their company website;
4. Design services and retail sales of trendy new and pre-owned furniture and décor.
Neither the local brick and mortar competition, nor the pure-play ecommerce sites like Amazon or Wayfair can compete across all four revenue streams. Consequently, the company’s model is scalable and generating nearly double the industry’s average profits. The company is located in a unique market hub with plenty of headroom for brick-and-mortar growth. The town is a tourist mecca for high-income households vacationing from Seattle, Portland, and Northern California, drawn to its ski slopes and tranquil lakes. It’s also consistently ranked as a top retirement spot. Housing vacancy rates are low and new construction is quickly snapped up. This indicates that local demand for the company’s furnishings and design services will continue to grow, while the company can attract an even wider audience online.