Family-owned furniture fittings business Blum has recorded a drop in turnover of 12% to €2.3m million for the 2022/2023 financial year ended 30 June 2023.

Managing directors of Blum Philipp Blum and Martin Blum

Following a period of “above-average” growth, including an 11.6% increase in  2021/22, managing directors Martin and Philipp Blum said it was an expected and foreseeable development.

The company reported the furniture industry has been experiencing a sharp decline in demand since the second half of 2022.

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Managing director of the Blum Group Philipp Blum stated: “After a period of high investment in home improvement, we have been observing a turning of the tide since autumn 2022.

“High levels of inflation, rocketing prices and the global energy crisis have generated a feeling of immense uncertainty among end users. This translates into restrained purchasing behaviour.”

In addition to the challenging market environment, Blum reported the cost of raw materials, energy and human resources remains high.

It also stated China’s COVID policy lasting almost a year and the cessation of deliveries to Russia have slowed down business for the Austrian company.

Philip Blum stated: “After two years of above-average growth, the drop in turnover is a foreseeable development.

“We were expecting a downturn, however the speed at which it happened was surprising for us.

“Although we need to adapt to this challenging situation, we are sticking to our basic strategy.”

Managing director Martin Blum added: “Our long-standing corporate philosophy and values will remain our compass; we will continue to focus on close customer relations, innovation and the further development of our 9,330 employees across the globe.”

Blum reported the effects of inflation and uncertainty during the course of the past financial year were felt in the European markets, in particular.

Turnover was stable in the Asia Pacific region, with the exception of China and it stated North American market, especially in USA, were satisfactory.

However, following two years of strong momentum in the furniture industry, the fittings manufacturer is now experiencing the downswing: “The drop in orders is challenging and we need to prepare for another difficult year.

“We have taken on the challenge and believe that markets will recover in the medium term,” said Philipp Blum.

In a bid to meet its longer term ambitions, Blum has continued to make investments across product, facilites and people.

Following its acqusition of electronics company Industrie Electronic, Blum introduced Ampersos furniture with built-in charging points at Interzum and published its first sustainability brochure.

The company has also invested €390million euros in premises around the globe in 2022/23, €255million of which was spent in Vorarlberg.

Over the next few years, the company will add 560,000 sqft  of production and storage space for more than 16,000 pallets at its main site in Vorarlberg.

After three years of building work, Blum opened a site in Shangai in March, will complete Plant 6 in Gaissau this summer, 2023 with further extensions to Plant 2 in Hoechst and Plant 4 in Bregenz.

It is also evaluating potential sites for a plant in eastern Austria in order to create additional capacity for the production of box systems.

According to Blum, the new facility could be up and running in about four to five years’ time at the earliest.

However, for Martin Blum, one of the most important investments in the future is training young people at the company: “Our up-and-coming skilled workers will safeguard our future.”

From September 2023, Blum will expand its training portfolio to include an additional apprenticeship in IT: Application Development and Coding, aimed at school leavers as well as students.

The family-owned business is currently training a total of 399 apprentices around the world in 11 different professions.

Positioning the business to meet continuing economic challenges, Blum has also grown its management board.

Longstanding employees Wolfgang Heinzle, Alexander Roloff and Klaus Wendel have joined Gerhard Humpeler, Martin Blum and Philipp Blum.

“We are pleased that our team has been strengthened by the addition of three competent and experienced colleagues.

“We will work with experts across all fields to further develop the company and take on the challenges we face, because only together will we succeed,” stated Philipp Blum.

On the outlook for the company, both Blum managing directors continue to anticipate headwinds.

“We’re going to need a lot of perseverance until consumer confidence and markets stabilise again”, explained Philipp Blum.

“Our long-term orientation and committed and flexible employees are our strength and what make us a reliable partner for our customers on a daily basis”, concluded Martin Blum.