Buying Power

The Furniture Wars

Lutz
Is it me or are chairs getting bigger?
  • Why it matters

    Why it matters

    If furniture giant XXXLutz group sets up its own buyers association, it will be able to negotiate even harder with suppliers

  • Facts

    Facts

    • The XXXLutz Group is shaking up the world of mid-sized companies in the furniture business.
    • The firm was founded in Austria in 1945.
    • It is setting up its own buyers’ association to improve its negotiating power.
  • Audio

    Audio

  • Pdf

Inside the spacious exhibition halls in Cologne, furniture makers are setting up fantasy worlds for a furniture trade fair that opens on Monday. There will be €80,000 ($92,600) kitchens beds with box-spring mattresses and towering pillows, airy wall units featuring elaborate LED systems. But look carefully at the beautifully designed interiors and the cracks soon become visible.

“The idyllic world of the furniture business is starting to totter,” said Arnd Ziemer, editor of the trade journal “Möbelkultur.”

The most recent indication came at the start of this year, when the family firm Zurbrüggen, operator of five imposing furniture palaces made of steel and glass, chose to snuggle beneath the wings of the much larger Austrian XXXLutz Group, which has 30 furniture outlets in Germany alone.

The group’s chief financial officer, Christian Zurbrüggen, said he had decided to sell a 50 percent stake in the family firm to XXXLutz in a move to survive the ever more saturated furniture market.

“It is a matter of saving the company,” he said. “The changes currently underway in the furniture market will continue.”

The large furniture stores are vying for customers with substantial discounts and inexpensive food in their restaurants. Online marketers  are also making inroads, supported by investors willing to accept a period of losses.

Long-established family firms are stuggling, too. Zurbrüggen, for instance, has worked hard to cut costs, but is still losing money, despite generating more than €300 million in gross sales.

The company is now looking for help from XXXLutz, which plans to set up its own buyers association.

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