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Please provide an overview of the drapery industry in North America
Greetings!
Thanks for requesting an overview of the drapery industry in North America. The most useful source I found on the topic was an industry report composed of data from IBIS World. Unfortunately, this source only includes data from 2011. The short answer is that the industry was crippled in 2008, at the height of the financial crisis, but has since recovered nicely. It is, however, highly competitive, due to the consolidation of major companies, in addition to a "product saturation and general exhaustion of opportunities." In order to extrapolate from those older figures, I provided what up-to-date information I could find as well as some information on the drapery market's top earners and competitors. Below I have provided a deep dive of my findings.
METHODOLOGY
In order to provide you with the best possible answer, I used raw data from a handful of industry reports to illustrate the current state of the drapery industry in North America. As previously stated, the first source lists every piece of information that was requested, but unfortunately the data is from 2011. So in order to draw a tenable line from that older resource to the present condition, I used more up-to-date figures, such as a recent IBIS report, and a Statista report on average expenditures for curtains and draperies in the U.S. that would allow for a reasonable extrapolation on the subject. In the report, I also listed the top 5 competitors in the industry, according to a list precompiled in the 2011 report. I was able to find financial disclosures for the top-grossing company, but was unable to find financial data on the remaining 4.
A SNAPSHOT OF THE DRAPERY INDUSTRY IN THE U.S.
According a report compiled for the 2012 fiscal year, blind and shade manufacturing yielded $2.3 billion in 2011. 346 businesses were included in this market share, with profits being logged at $155.3 million, and products exported accounted for $42.4 million. The report notes that the projected annual growth rate from 2006-2011 was -6.8%, but this was due largely in part to the subprime mortgage crisis and crash of 2008. Projected annual growth for 2011-2016, according to the report, was listed at 3.4%.
Market share demographics for the drapery industry are broken up into four separate ages brackets: Under 25, 25-33, 34-65, and Over 65. "Consumption for home furnishings including window coverings appears to be dominated by consumers between the ages of 35 and 64 accounting for over 60% of sales." Adults under 25 account for the smallest share, 9%, while adults over 65 account for the second smallest, at 12%. Adults from the age of 25-33 are in the middle, accounting for 19% of sales.
Two key external drivers in the drapery industry are private spending on home improvement and the value and rate of residential housing construction. The report from 2011 suggests that rate of residential housing construction will increase in the coming years. This turned out to be true. As illustrated by Fortune,
"the overall trend in home construction is clearly positive, with the average annual rate of new groundbreakings reaching a 1.163 million rate so far in 2016, up about 5% from 1.108 million in 2015." This trend is set to continue in 2017, with home builders being encouraged by increased demand from buyers, looser credit, and higher wages. The rise in residential construction in the U.S. will provide growth opportunities for the drapery industry.
As far as key players and market shares are concerned, "the major market segment is home furnishing wholesalers," which accounts for roughly 54.1% of sales. "The remaining 45.9% encompasses direct sales to contract outfitters and specialty blind and shade retailers." The two top players in the industry "account for an estimated 52.1% of market share." Those key players are Hunter Douglas and Springs Window Fashions. Hunter Douglas has a 38.2% hold on the market, while Springs Window Fashions has a 16.8% hold.
According to the 2011 report, the drapery industry is in the mature phase "exemplified by high market concentration, product saturation, established technology and processes with little or no innovation, slow growth rate and rationalization of low margin products and brands." The industry is also highly competitive, as evidenced by two major players holding a combined market share of over 50%. As a result of these two cases, the industry is developed and rather well defined. "The uptake of new technology has been confined to large manufacturers. Other enterprises have been trying to grow through consolidation." Manufactures are able to distinguish themselves from their competitors in this industry on the grounds of their design, product quality, price, diversification, and customer service.
To engage with some more recent data, a report conducted by IBIS World in 2015 found that the window coverings industry has been largely characterized by recovery over the last 5 years, with an annual revenue in 2015 reaching $3 billion, and an annual growth rate of 3.1%. Furthermore, "the Western region of the United States accounts for a significant 22.9% share of industry establishments in 2015." According to a report on Statista regarding the average annual expenditures on curtains and draperies, the figure was highest in 2008 right before the crash, at $20.75 per consumer unit. This number went down thereafter but slowly began to rise again. In 2014 Americans spent an average of $12.38 per consumer unit on draperies.
TOP 5 COMPETITORS
According to the comprehensive report from 2011, the top 5 competitors in the drapery industry are listed as Hunter Douglas, Springs Window Fashions, Newell Rubbermaid (Kirsch), 3 Day Blinds, and Somfy Systems, respectively.
Hunter Douglas's net sales for 2015 were 2.552 billion, which netted the company a total of $156 million USD.
CONCLUSION
To wrap it up, the drapery industry appears to be recovering quite well from the financial crash of 2008. As a result of the crash, widow covering firms shifted their focus to the contract market, with the biggest name in the industry being Hunter Douglas. As of 2011, commercial jobs accounted for 25% of industry revenue.