Amidst challenges such as declining new construction, high interest rates, inflation, and a general reluctance to buy, the furniture trade is facing difficult times. This has led to bankruptcies and dwindling sales in the industry. However, Furniture company XXXLutz appears to be relatively unaffected by these difficulties.
With the Insolvency of Kika/Leiner and the closure of half of its branch network, XXXLutz was able to capture some of the released sales of 300 million euros. In response to the crisis, XXXLutz has adapted by offering more affordable and smaller furniture options. With declining new buildings but rising rents, there is still a need for living space. This has led to a demand for smaller and cheaper furniture items, particularly for rental apartments.
XXXLutz has engaged in an aggressive price war, advertising heavily and offering a variety of sales lines both in-store and online. Despite the challenges in the industry, XXXLutz has managed to achieve a small profit in Austria. The company, with sales of around 6 billion euros and 27,000 employees, has grown to become the second-largest furniture retailer in the world after Ikea.
The company has made strategic investments in other furniture retailers such as Poco, Conforama, and Lipo, expanding its reach and market share. Recently, XXXLutz made a significant acquisition with the takeover of Home24. This acquisition allowed XXXLutz to integrate household goods chain Butlers into its branches in Germany and Austria. The company recognizes the importance of online sales, with online business making up a significant percentage of total sales.
Despite the dense network of furniture dealers in Austria, XXXLutz continues to expand with new locations planned in Vienna and Linz. This expansion strategy is part of XXXLutz’s overall growth and positioning as a major player in the furniture industry