Stubborn inflation and stalled housing construction are causing problems for the German furniture industry. The ailing manufacturer Hülsta is now threatened with ceasing operations.
The Westphalian furniture manufacturer Hülsta is on the verge of extinction. The employees were informed at a meeting “that with the opening of insolvency proceedings on June 1st there is a risk of operations being shut down,” said the provisional insolvency administrator, Christoph Morgen. Until then, all existing customer orders should be fulfilled as far as possible. The 280 employees receive insolvency money from the employment agency from March to May.
MWS Westfalen Works NDS GmbH & Co. KG and MWS Works Westfalen GmbH, known under the name Hülsta, recently filed for insolvency with the Münster district court. The predecessor company Hülsta-Werke Hüls GmbH & Co. KG had already filed for bankruptcy in October 2022. The process was completed at the end of 2023, after which a new investor took over the business.
“Significant decline in sales”
According to the company’s own statements, the reason for the financial difficulties of the company from Stadtlohn near the Dutch border is a considerable decline in sales and external factors such as the difficult market situation, which do not mean that sales can be expected to cover costs.
The company has been around since 1940, when Alois Hüls opened a furniture carpentry shop in Stadtlohn. The name Hülsta is made up of the founder’s family name and the place name.
The industry suffers from a lack of buying sentiment
The German furniture industry is going through difficult times. As a result of consumers’ reluctance to buy, sales fell by 4.3 percent to around 18 billion euros last year.
In addition to high inflation, the slowdown in new housing construction also played a role. In the living, dining and bedroom furniture business, sales even fell by more than twelve percent. According to the furniture industry associations VDM and VHK, incoming orders last year were eleven percent below the previous year’s level.
Fewer exports, fewer imports
Sales markets abroad are also affected by a weak consumer climate. According to preliminary figures from the Federal Statistical Office, furniture exports fell by six percent to around 8.4 billion euros in 2023. However, furniture imports to Germany fell even more sharply. Imports fell by almost 18 percent to around 9.0 billion euros.
In the spring, the industry called on politicians to promote housing construction, but also identified rays of hope in the declining inflation and the key interest rate cuts expected in the second half of the year.