Hanssem and Hyundai LIVART, which represent Korea's furniture and interior industry, saw their results worsen last year due to the construction slump. The downturn in construction led to fewer transactions of dwellings and a slowdown in new presales. It is also seen as the result of multiple factors at once, including a decline in furniture purchase demand from high inflation and a shift in consumer trends toward new platforms.
On the 10th, according to the Financial Supervisory Service's electronic disclosure system, Hanssem's consolidated sales last year were 1.7445 trillion won, down 8.6% from a year earlier. Operating profit fell 41% to 18.4 billion won. The drop in net profit was particularly pronounced. It reflects a base effect from one-off gains such as the sale of headquarters the previous year, along with overall industry weakness.
Hyundai LIVART also struggled. Last year's sales were 1.5462 trillion won and operating profit was 15.7 billion won, down 17.3% and 34.6%, respectively, from a year earlier. By quarter, the deterioration in profitability was even clearer. In the fourth quarter, sales came to 357.9 billion won, but an operating loss of 2.6 billion won expanded the deficit from the same period a year earlier.
The key themes running through the sharp earnings declines at both companies are a cliff in real estate transactions, cost pressure, and changes in consumer trends. First, the furniture industry is directly tied to moves and new presale volumes. The yearlong decline in dwelling sales froze demand for furniture replacements. The construction slump dealt a direct blow especially to business lines with a high share of business-to-business (B2B) transactions.
Among the two, Hyundai LIVART has the higher reliance on B2B. About 80% of Hyundai LIVART's sales come from B2B. Last year, Hyundai LIVART's B2B furniture (built-in and office furniture, etc.) sales were 494.5 billion won, down 23% from a year earlier. B2B business sales including materials also fell 13% year over year to 573.4 billion won. The construction slowdown affected results across the board.
On the supply chain side, cost inflation also ate into profitability. As prices of key raw materials such as lumber stayed high, margins narrowed. According to the Korea Forest Service, as of 2024, imported lumber accounts for 80.4% (21.23 million m³) of the country's total lumber use of 27.41 million m³. The furniture industry is highly dependent on imported lumber, and lumber is cited as a raw material with large supply and price volatility in global markets. On top of that, fixed costs such as labor and logistics added to the burden, increasing expense pressure.
Shifts in the consumer environment are another variable. As consumption pivots to living platforms and e-commerce such as "Ohouse," interpretations suggest that the traditional sales model centered on large showrooms is reaching its limits.
Accordingly, both companies are focusing on increasing the share of business-to-consumer (B2C) sales to minimize the impact of the construction cycle. At Hyundai LIVART, B2C accounted for 20.8% of total sales last year, up 3.1 percentage points from a year earlier. Hyundai LIVART's B2C furniture (home furniture and interiors) sales were 322.3 billion won last year, a modest decline of 2.7% from a year earlier.
A Hyundai LIVART representative said, "This year, we plan to concentrate our capabilities on improving profitability, strengthening the distribution network's fundamentals, and expanding new B2B projects," adding, "We are continuing cost improvements in the built-in institutional sector, and are advancing cost management across all areas through measures such as improving Production yield for materials and diversifying sourcing." The person also said, "We will shrink underperforming living stores with low efficiency and, instead, expand and develop our 'homterior' (interior) high-quality distribution network from the current 275 locations to 300 to strengthen customer touchpoints."
Hanssem is also accelerating its B2C expansion strategy. In the home furnishing institutional sector, it aims to strengthen competitiveness in key categories such as signature storage, hotel beds, student rooms, and kids. Through the rebranding of the premium kitchen brand "Kitchenbach," the company plans to raise average ticket size with a focus on mid- to high-priced products and seek improved profitability.
An industry official said, "There are limits to improving results through sales diversification and expense efficiency. For meaningful growth, dwelling sales need to become more active, which generates remodeling and furniture replacement demand," adding, "It appears more time is needed until such changes emerge."