June 16, 2006

Furniture companies are squeezed by haggard consumers

Filed under: General, Furnitures — admin @ 1:20 am

ATLANTA, June 15 (Reuters) - Furniture companies faces tougher times as higher petrol prices and rising interest rates put more pressure on middle-class consumers, leading them to drag back from big-ticket purchases. 

This week, Stanley Furniture Co; became the newest in the sector to cite sales weakness when it cautions that second-quarter results would fall short of preceding estimates. Its shares closed down 4 percent on Thursday after falling as much as 6 percent earlier in the day. 

“We’ve seen retail furniture (sales) be slow since March,” said Jerry Epperson, and furniture analyst with Mann, Armistead & Epperson in Richmond, Virginia. “The recovery just isn’t there right now.” 

Though furniture sales are classically weakest at this time of year and stronger in the second half, an added confront is getting middle-income consumers to buy in an impression of higher gasoline prices, minimal wage increases and slower housing growth, Epperson said. 

“The investment climate hasn’t been the best,” Epperson said. “Asset prices, particularly home prices, aren’t rising like they were before. We’re not seeing the home refinancing that put a lot of money in people’s pockets.”

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