Our company, Mann, Armistead & Epperson, is an investment banking firm that is more than 29 years old, and one of our specialties is the furniture and mattress sectors. Fortunately, we had already had a successful year before the pandemic hit, selling a U.S. mattress maker, owned by a South African company to the largest U.S. mattress maker and selling a major U.S. furniture store chain to a public Asian mattress manufacturer.
We are blessed to have a global reputation because of our specialization and long history, but the real key is our people and knowledge. We monitor the merger and acquisition sector closely and carefully, as you might imagine.
You might assume that the COVID-19 mess might discourage both sellers and buyers in home furnishings, but you would be wrong. Before this recent summer recovery in sales and consumer activity, our industry’s long ties to the housing industry were encouraging various acquirers to look at furniture and mattresses, primarily for long-term demographic reasons. As our sales recovery continues, this creates more attention.
Yes, we are benefiting from consumers NOT spending normally on dining out, amusement parks, live entertainment, spectator sports, museums and libraries, vacations, foreign travel, personal grooming and even gambling to some degree. And yes, we are getting people to focus more on the home and all everyone can accomplish from their home.
The needs of the various possible acquirers and sellers are too many to mention, but we stay in touch with the hundreds of private equity firms that are the correct size and temperament to consider home furnishings. Of course, as we just demonstrated, many foreign companies want to have a larger presence in the United States.
I recently read an interesting article on how the sudden pandemic will encourage more companies to acquire their competitors. The reasons are obvious but interesting. Buying a successful business is almost always less expensive and offers less risk than a start-up of a new operation. Up front you get a product line, knowledgeable employees, systems and controls, and an established presence in the market.
Don’t look now, but for an industry our size, about $130 billion at retail in 2019, we have more manufacturers, importers, vendors and more retailers than almost any other industry you can name. Is anyone dominant? Ashley is as close as we come, and it has less than 10% of our business.
We have seen consolidation almost everywhere, and the globalization of furniture is likely to encourage it further.
Ours is a huge, diverse industry with opportunities and niches galore just waiting for the next great idea. Even with the recent pandemic, we are getting more attention.
And we deserve it!