Despite lower input prices, wholesale bypass will continue to pressure industry operators
New York, NY (PRWEB) July 06, 2014
The Window Coverings Wholesaling industry has been largely characterized by a recovery in demand during the past five years. Because demand for industry services is entirely dependent upon demand for blinds, curtains, shades and drapes, industry revenue is closely linked to patterns in housing starts. When the housing bubble burst, demand for industry services plummeted as fewer people were moving into new homes that required new window coverings. However, as housing starts have grown during the past five years, window coverings wholesaling demand has slowly recovered, growing at an annualized rate.
During the five years to 2019, industry revenue is expected to recover to prerecessionary levels. According to IBISWorld Industry Analyst Jocelyn Phillips, “As consumer confidence increases, private spending on home improvements is expected to rise, driving expected revenue growth during the next five years.” The world price of cotton, a major input to many industry products, is expected to fall during the next five years as well. This will provide industry firms with an opportunity to expand their average profit margins. Increasing reliance on less expensive products imported from overseas will further shore up profitability.
Nonetheless, “Profit and revenue growth will likely remain limited in the near future due to wholesale bypass, and competition from window covering manufacturers,” says Phillips. Large home furnishings chains and mass merchandisers fulfill a significant portion of downstream demand, and these giants have increasingly been able to buy in bulk and negotiate directly with manufacturers for better prices, cutting out the wholesaler's traditional role. Manufacturers can also hire their own sales teams to sell products directly to independent retail stores, further limiting market opportunities for industry wholesalers. Online commerce companies like Amazon have also made it easier for manufacturers to sell directly to customers without relying on independent wholesalers. Under these external pressures, many operators will not be able to remain competitive, and the total number of industry firms is expected to decline during the five years to 2019. Despite higher consumer confidence, lower priced inputs and the growing value of personal homes will pressure remaining operators.
For more information, visit IBISWorld’s Window Coverings Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes operators that serve as intermediaries between manufacturers and retailers. Operators purchase large volumes of window covering products, including curtains, blinds and draperies, for sale to retailers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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