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Furniture retailers are cashing in on the booming economy. Srinivasan Iyer reports

Furniture sales in the capital have suddenly shot off the charts. With steadily rising disposable incomes, brand new apartment and office complexes mushrooming on the horizon, and a trend in most households towards refurbishing and redecorating, major furniture retail outlets in the city are capitalising on the high demand. And as the economy booms, the furniture industry is seeing a corresponding quantum jump.

Khimji's and Home Centre say there is a lot of uptake from the nationals. Says Praveen Kapoor, divisional manager, home products division, Khimji Ramdas, "While the normal trend here is a discounted sale, we decided to be a touch different. We had implemented an exchange-offer campaign on home furniture and offered a 30 per cent discount on the invoice value of the new furniture, irrespective of the condition of the old items. Sales jumped more than two and a half times in July."

Says Saibal Basu, general manager of Landmark Group, which has the Home Centre brand under its umbrella, "The growth over the last few months is mainly organic. We have been adding new clientele, especially with the opening of the Home Centre outlet in Muscat City Centre, which has helped spur the rate of growth.” Home Centre's advantage, says Basu, lies in the fact that they think global but act local. “We know the international trends, as well as those in the GCC markets. We offer value for money, besides being a one-stop shop providing furnishings to home accents."

Witnessing growth

Most retailers in this segment have witnessed phenomenal growth in the last three to four years. The customer is spoilt for choice in range, quality and price. IDdesign, for instance, witnessed four years of continuous growth, with 2006 volumes jumping 38 per cent. A similar leap is expected this year too. Home Centre, which opened its newest outlet in Muscat City Centre, has seen 2007 sales growing 85 per cent compared to the previous year. "Home Centre has been averaging 40 per cent growth," informs Basu. Fahmy Furniture, which boasts of the largest showroom in Oman at nearly 10,000 square metres, has managed to grow volumes by 30 per cent in 2006. "We have already exceeded that figure in the first half of this year and are likely to post 35 per cent growth," informs J S Charles, general manager of Fahmy Furniture. Teejan Furnishing, which operates next door, has also seen a busy year with volumes rising by nearly 50 per cent. Another major player Alasfoor Furnishing has seen its retail sales maintain an upward trend despite increasingly focusing on the institutional segment.

Another important growth driver is the changing social trend. With the gradual shift from large joint families to nuclear units, there is high demand for white goods, furnishings and furniture. "The new generation of Omanis is well-travelled, and with a growing number studying abroad, they are aware of the latest international trends. This is the fastest growing segment and they know what they want," says Kim Jepsen, general mana-ger of upmarket furniture retailer IDdesign in Markaz al Bahja. "Thanks to changing sensibilities, we have witnessed a steady rise in sales this year. We have a good number of customers who simply walk in and ask for quotations. On the whole we have been doing quite well." Says Landmark Group's Basu, "It is now possible to find different rooms in the same house done up in various themes ranging from traditional and transitional to classic." Jepsen says that the taste in colours has also undergone a transformation. IDdesign's best-selling sofas are the ones in bright hues of red, lime green and petrol blue. Others are in keeping with the company's Scandinavian origins, like sand and mocha. The choices in designs too have changed. According to Khimji's Kapoor, straight-line, low-slung coffee tables and beds are in vogue. The Khimji's have tied up with Spain's Simplified, known for its uncluttered, functional designs. The furniture makes it way from Brazil, India, Singapore and Malaysia, while staying away from the 'factory of the world' – China.

IDdesign's items are mainly sourced from their factories in Europe. Fahmy specialises in classic Arab beech wood furniture that are ornate and involve intricate carving, exclusively sourced from Syria. "Fahmy has taken a conscious decision to stay away from products for the mass market, as our core buyers comprise upper middle class and rich Omanis," says Charles.

Cheaper options

Another popular area to buy furniture is Hamriya. The huge concentration of furniture shops in the locality gives buyers plenty of choice and bargaining power. The furniture is sourced from the usual suspects – China, Malaysia and Thailand. The shops here are not plush like Home Centre or IDdesign and products are arranged haphazardly. These are frequented by the middle class and Asian expatriates. "Our clients are not the same as those who go to Home Centre or Teejan. Our prices are much lower since our overheads are much lower and customers generally haggle over the price. For RO300, a buyer may find just a sofa set at one of these stores. But we can almost do up their entire house with that amount. Yes, the quality may differ, but expatriates who are here for two to three years don't bother about that," says an Abu Haroon International Trading employee. The market here is cut-throat. If a prospective buyer finds the price unsuitable he simply walks into another shop. A difference of RO1 or RO2 can make or mar a sale. Also, the shops here work on a cash-only basis and therefore see a seasonal shift in demand. "Usually sales decline during the beginning of the school year as the priorities shift. Also, the perception that sales rise during Ramadan is untrue because people spend on essentials like clothes and gifts and hold off purchases for a later date," he adds. Doubts about the viability of these outlets must be dispelled. They will continue to operate alongside the Teejans, Fahmys and Home Centres.

Stepping up service

One of the most crucial aspects of furniture retailing is the emphasis on customer service – or the lack of it. And retailers are taking steps to bring it on par with internationally accepted standards. Says Jepsen, "The days have gone when you had three salesmen smiling and wishing you a good day. The emphasis now is on giving customers their space while they look around, and providing helpful tips when approached. The market is very competitive now." While IDdesign puts a lot of emphasis on training its salespersons as well as all those involved at various points of contact with customers, others like Khimji's believe in suggestive selling, and educating buyers on the finer nuances of a particular product or material.

There seems to be some concern regarding delivery, but most retailers are making efforts to cut down the lead time – the time lag between placing the order to actual delivery of goods. At present, Home Centre works on a five-day lead time, and plans to cut this to three with the opening of a new warehouse in Ghala and by increasing the number of its delivery trucks to 22.

"But in the end," says Jepsen, "the customer has every right to ask for more and expect good service. Because, it is they who pay our wages." g