The seasonality of the furniture sector is disappearing
"This positive period is the result of trends that emerged at the beginning of the year. In the third quarter, a new market trend can already be observed, which explains the increasing order volumes. The seasonality of the furniture sector, where orders increase in one season and decrease in the next, has disappeared. Order volumes are now spread throughout the year. This is what determines the evenly growing results," says Tomas Mauricas, the head of Kauno Baldai.
The new trends are a consequence of the pandemic and lockdowns. Clients who were unable to purchase furniture urgently or by their usual means of buying at physical stores continue to shop and renew their households. Today, goods can be examined at physical stores and can also be obtained faster.
Labour market and cost challenges
During the third quarter, Kauno Baldai displayed more moderate growth. In just the third quarter of this year, the company sold products worth 6.7 million euros, a 7% increase over the 6.3 million euros in sales over the same period in 2020.
According to T. Mauricas, the more modest growth is not due to a decline in orders or demand but due to challenges in the labour market, which were felt even more in the third quarter of this year. The company head is certain that this trend might continue for some time.
“We have currently arranged the manufacturing of orders up to the beginning of next year and even if we could technologically manufacture more, we are unable to increase our production volumes due to a lack of staff. Nevertheless, in response to these challenges, we offer current and newly joining colleagues at Kauno Baldai some of the best conditions on the market – from wages to training, career opportunities, and requalification,” T. Mauricas says.
He also adds that currently, problems caused by the pandemic and related restrictions can also still be felt – disruptions in supply chains, fluctuations in commodity prices, an increase in electricity prices. That said, in the third quarter, Kauno Baldai did observe the stabilisation of commodity pricing.
Major goals for the end of the year
The coming period will be crucial for the company – both at the end of this year and across the entirety of 2022, there will be no shortage of challenges and new opportunities. Kauno Baldai began a building conversion project – almost 20 million euros are to be allocated to the construction and setup of a new manufacturing building, which will replace the old premises.
“The new factory is crucial for our expansion – we plan to launch production in late 2022 and reach at least 70 million euros in sales within five years. We are currently ordering equipment and the construction work is well underway. We are also already planning to move, relocating our manufacturing to ensure that processes will proceed as smoothly and as effectively as possible. Naturally, the new, higher capacity factory will also require more staff,” T. Mauricas says.
In preparation for the launch of the new factory, Kauno Baldai is already intensively seeking new colleagues and the company’s expansion will create a quarter more jobs, reaching up to almost 500. Teams of upholsterers, seamstresses, operators, and carpenters are currently being recruited.
