Norwegian furniture manufacturer Ekornes, owner of the Stressless brand, has reported a decline in second quarter revenues while the UK market showed a slight positive trend.

According to its latest Q2 2024 trading update, operating revenues came in at NOK 975,1 million, down 3% from NOK 1,007 million the second quarter in 2023, reflecting lower demand and weaker consumer purchasing power.

Operating earnings (EBIT) for the quarter were NOK 53 million (-17), corresponding to an EBIT margin of 5.5%. This compares to negative 1.7% in the second quarter 2023 and negative 4.1% in the previous quarter. Earnings before tax for the second quarter 2024 ended at negative NOK 2 million, compared to negative NOK 80 million in the second quarter 2023.

“Revenues from the Stressless® segment, representing some 74% of Group revenues, were NOK 726 million, a decrease of 3% from the second quarter 2023, mainly due to a continued weak market development in Europe,” the group said.

“Revenues from IMG fell by 9% to NOK 190 million on lower order intake for the first half 2024 compared to the corresponding period 2023. Compared to the previous quarter, IMG revenues were up by 4% due to continued strong operational performance for the Thailand production facility.”

In the UK and Ireland, sales amounted to NOK 84 million (£6.1m), up from NOK 78.4 million (£5.7m), with year-to-date revenues reaching NOK 159.7 million (£11.6m), down from NOK 166.1 million (£12m).

Commenting on the UK, Ekornes continued: “The UK market showed a slightly positive trend in order intake during the quarter. A focused distribution policy and selective work with partners has proven successful, evidenced by the onboarding of new large partners during the period.

“However, the market remains fiercely competitive, requiring continuous strategic efforts to maintain and grow market share.”

In Europe, the market experienced weak footfall and activity in stores, with consumer sentiment remaining highly volatile. Germany, one of the largest markets for Ekornes in Europe, is particularly affected by a struggling economy. “The rise in bankruptcies and a general reluctance among companies to invest and place large orders are contributing to a weak outlook for the region,” the group said.

“However, branded furniture seems to deliver a more robust performance and promotions have supported the sales of recliners and power sofas during the quarter.”

For the first half year 2024, Ekornes generated operating revenues of NOK 1 948 million (2 142). The decline in revenues compared to the same period in 2023 largely reflects weaker consumer spending on household items and furniture as the overall cost of living has increased.

The reduction in revenues was partly offset by increased product prices and growing sales of the dining segment and sofas.

Tine Hammernes Leopold, CEO of Ekornes, commented: “Throughout its 90-year history, Ekornes has demonstrated a convincing track record of innovation and industrial growth. Having matured into a global provider of high-quality furniture with more than 4,000 sales points in 40 countries, we are now focused on leveraging our strong position to increase the company’s consumer and dealer appeal further.

“While increasing focus on brand positioning, we are also intensifying strategic efforts to simplify operations, maximize supply chain efficiency and modernize organizational structures and competence to fortify the business structure for long-term sustainable growth.”

Ekornes has recently announced two senior departures across its UK and EU business. Read more.