Demand for high-end home furnishings

There is increasing demand for high-end home furnishings such as luxury bed linen and exquisite flooring, reports CHRISTOPHER LIM

The high-end home furnishing market seems to be on fire these days. Retailers and distributors of everything from luxury bed linen to exquisite flooring may disagree on the reasons for the state of demand for their products, but they can all agree on one thing - life is good. People are spending and sales are swelling.

Just what kind of products are flying off the shelves? Adrian Loh, director of Equip-Design & Supply, reports brisk sales of shower systems, handles and locks. American brand Baldwin, which Equip-Design exclusively distributes in Singapore and Malaysia, produces luxury door handles. A pair of its Archetypes Chateau range handles goes for $10,000, but Mr Loh says that ‘many people have the money and are willing to spend on these fittings they use day in and day out’.

Simmons reports that its latest Beautyrest Black range of mattresses has been well received. The range, which starts at $11,000 for a queen-sized mattress and goes up to $22,500 for a king-sized one, sports such niceties as memory foam on top of a new type of pocketed spring, and is finished in cashmere woven with modal yarns, which is a natural yarn from beech trees.

What’s a top-of-the-line mattress without appropriately luxurious bed linen draped on it? Whang Sung Lin reports that customers have been snapping up the French D Porthault bed linen he stocks at his latest shop Corner D Porthault a Singapour, despite the store not even being officially open for business till this coming week.

‘I sell luxury sheets from France and Italy, and the French sheets go up to $10,000 a set. But it’s almost embarrassing because I haven’t officially opened the shop yet and quite a lot of things have disappeared off the shelves already. So, there’s definitely a greater appreciation of these high-end products nowadays and I’m thankful for that,’ Mr Whang says. ‘It’s not just my own shop, but even wine dealers and restaurateurs are telling me that people are opening their minds and trying new things.’

Upswing in demand

Floor and tile specialist Stile and sister shop home furnishing store Cream have both experienced a significant upswing in demand. ‘Business has been bad for the last seven to eight years, and last year, it really hit the bottom,’ Tan Kay Siang, managing director of Builders Shop Pte Ltd - the company behind both Stiles and Cream - comments. ‘Now, we feel the vibrance. There’s a lot more activity,’ he adds with obvious enthusiasm.

Although Stile and Cream both cater to the high-end market, Mr Tay says that ‘demand has shot up overnight, drastically, and not progressively’, starting at the beginning of this year. He estimates that Builders Shop’s business has gone up by 10-15 per cent compared with last year. ‘The developers have also been caught by surprise. This has spelled opportunity for us. Before that, it was really tough because developers have tried to keep their costs down.’ This success comes in spite of Boffi Xila 2.3 and Boffi Zone kitchen systems going for $200,000, which Stile recently supplied to Sentosa Cove and developments on Ford Avenue.

Mr Whang is not certain where the new demand for his bed linen is coming from. ‘I used to think I knew who my customers were, but I don’t any more,’ he admits. ‘There are people I’ve never met before who know a lot about sheets. They know exactly what they’re buying and I’m very impressed. I’m delighted to meet them because they’re like-minded people who understand what I’m trying to do, and it’s nice to be understood.

‘I suspect that as the prices of homes have gone up, home furnishings are taking up a smaller percentage of the total cost of the home so people are more willing to spend. If you’re moving into a $3 million home, $15,000 for a fitting is a low cost, relatively speaking,’ he speculates.

He also suspects that evolving tastes have contributed to the demand, stemming from people travelling more and becoming more educated. ‘There are also the children of my old customers, who grew up in homes where their mothers bought really good sheets, and they’ve grown accustomed to it, and now that they’re furnishing their own homes, they can’t have anything less. That’s a fairly natural progression.’

Equip-Design’s Mr Loh has a clearer picture of his current and future customer demographic. ‘Our existing customers are architects, interior designers, as well as our pool of loyal residential clients we’ve built up over the years. We’ve done palaces in Brunei, and have actually just tendered for Orchard Turn. Different brands will have different customer demographics. If you’re talking about designer goods, they’re usually 40 and above,’ he says.

But Mr Loh also knows who his new customers are. ‘I’ve realised that while 40-60 is the age where people used to make their fortunes, these days that age bracket is getting much lower. You have plenty of 20-something millionaires from all these IPOs, and they’re buying my products. That’s definitely a market I’d like to continue to reach. I also have a lot of Indonesians customers living in Singapore, with children who study here. There also other customers from around the region, and even farther afield,’ he comments, while pointing out a European customer walking into his Plaza Singapura showroom.

Builders Shop’s Mr Tay says that his customer demographic has remained fairly consistent over the years. ‘We appeal more to the young and trendy, who lean more towards modern, minimalist designs. It’s a mix of locals and foreigners, but the common trait is affluence.’

Equip-Design’s Mr Loh feels confident that demand is here to stay. Looking at local demand, he says: ‘People are changing properties often these days. Also, there have been so many en bloc sales, and once people sell and move elsewhere, they’ll want to redecorate. When these sites are redeveloped, they also have to be furnished with fixtures.’

But Mr Loh is also eyeing foreign demand. ‘Because the integrated resorts are coming in, wealth is also coming in,’ he says. ‘Billions of dollars are flowing into Singapore through the banks and brokerages every month, with the majority of it from foreign investors who have brought in money in anticipation of the IRs being set up. They’re just parking their money here right now in this safe haven, biding their time and collecting interest . . . When the IRs open, these people will come in, with houses already bought, and will start spending.’

Cautious with predictions

Although Builders Shop’s Mr Tay agrees that there is plenty of demand from foreigners at the moment, he is more cautious with his predictions. ‘Demand cannot continue to climb indefinitely. It really depends on whether or not there will be continued demand from foreign buyers. If not, things can’t be sustained.

‘With developers grabbing land like there’s no tomorrow, very soon there will be an oversupply if demand doesn’t match it. Our strategy is to focus on what we do best in order to maintain our appeal to our clients. We will push our knowledge-based expertise, and our passion, because we’ve never been able to compete on price.’

Bed linen merchant Mr Whang is still in the midst of analysing his Palais Renaissance shop’s future. ‘I’m also interested in pinning down where this new market impetus is coming from because I want to plan for the future. Is the growth going to be progressive over the medium term, or is it just going to be for a year or two? Everyone has a different opinion.’

Armani Casa, Giorgio Armani’s home furnishing branch, has enough faith in continued high-end furnishing demand that it’s opening its first store in Singapore on June 28. Located at Raffles Arcade, the shop will stock a wide range of products ranging from furniture to lamps. Fabrice Gouffran, managing director of Armani Casa and Hotels, feels that there is ‘enormous potential in the luxury home market due the important development of high-end real estate’ in Singapore. No wonder then, that the Singapore outlet is Armani Casa’s first one in South-east Asia.

The luxury brand predicts that its Singapore audience will be in line with its current average in America, Europe and Asia. ‘Our customer is in the upper side in term of incomes, from one country to another, the age of our customer ranges from 35 to 55 years old, with the average being around 41 to 44.’

With this Italian vote of confidence, and local merchants working hard to draw customers, it looks like the high-end home furnishing sector is in for an exciting ride.

Source: The Business Times, 01 June 2007