Ekornes provides operational update to secure future

Ekornes, the largest furniture producer in Norway and owner of the brand names Ekornes®, Stressless®, Svane® and IMG, implements temporary capacity adjustment to secure a long-term sustainable and profitable business.

Demand for household and furniture remains weakened as consumer finances are constrained by higher interest rates and rising living expenses. Addressing the challenging market conditions, Ekornes implemented several initiatives to reduce costs and safeguard profitability through 2023.

The trend of weak demand continued in the fourth quarter 2023 with reduced order intake for Stressless®, primarily in the Central-European markets. Promotions during the seasonally strong-selling November and December periods stimulated sales less than expected. Entering 2024, current order intake indicates a continued weak market development, a trend expected to continue during the first half of 2024.

Adapting to the situation, Ekornes will adjust operational capacity at the Stressless facilities in Norway through temporary redundancies of up to 10% of the 760 FTEs employed within production and assembly at the factories. The Company today initiated negotiations with union representatives. In total, Ekornes employs close to 2,700 FTEs worldwide.

“Ekornes continuously aligns its organisation and production capacity to prevailing demand through the cycles, securing sustainable operations. The initiative reflects a continued slow pace for the furniture industry, and it is essential that we act to ensure resilience and long-term competitiveness for the Group”, comments Tine Hammernes Leopold, CEO of Ekornes.

Although the demand for quality furniture is expected to return to normalized levels in the longer term, the length and magnitude of the current downturn remains uncertain. Ekornes has a flexible operating model and is continuously evaluating measures to ensure profitable growth.

Geoffrey Stafford, Sales Director UK & Ireland, commented from a UK perspective: “In light of the Ekornes’ global operational update, it is evident that our strategic approach underscores the need to stay nimble in response to fluctuating demand, emphasizing the importance of ensuring stability for long-term success.

“While the challenges in the furniture industry persist globally, it is reassuring to note that the UK market for Stressless remains resilient, maintaining consistent sales even amidst reduced demand. The UK market’s steady performance adds a positive dimension to the broader operational adjustments, showcasing the effectiveness of our approach in navigating through industry challenges.”

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