MILAN — Now that interest rates in Europe and the U.S. are, or appear to be soon, heading down, upscale furniture-maker Roche Bobois sees no reason why 2025 should not be better than 2024.
“Inflation is coming down. The guidance is that interest rates should closely follow. And the lowering of interest rates is going to give a lot of oxygen to our business. The U.S. market is recovering and stabilizing and the European Union and France are slightly up,” Martin Gleize, the company’s international director, told WWD.
Gleize said the company expects 2024 revenues to be in line with those of 2023, when sales amounted to 429.6 million euros. Roche Bobois’ home market, France, saw its economy rise a better than expected 0.2 percent in the first quarter of 2024, statistics office INSEE, the National Institute of Statistics and Economic Studies, reported in April. The institute expects 1.1 percent gross domestic product growth in 2024, helped by the Summer Olympics in Paris.
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Outside of its top markets, the U.S. and France, Roche Bobois is fortifying its position in the Chinese market in order to better tap into the growth potential of the world’s second-largest economy. As a single market, China teeters between Roche Bobois‘ third and fifth top markets. “The goal is for it to be top three,” he said.
Last week, the Roche Bobois Group said it will acquire a 51 percent interest in Shanghai Rock Castle Furniture, its lucrative franchisee in China. The local franchisee currently directly operates two Roche Bobois stores in Shanghai and one in Beijing, and manages 25 franchised stores located in various midsized cities.
Roche Bobois Group expects a full-year additional contribution of around 19 million euros to consolidated revenue. The accretive impact on revenue and margins will be more visible from full-year 2025 earnings, the firm added.
Roche Bobois has had a presence in China for the past 20 years. Today, Gleize said the firm doesn’t see any major local competitors that can compete with high-end European furniture-makers like Roche Bobois.
“So far, we can’t really see there is a high profile player in terms of creativity, quality, brand image, I think. It’s a little bit like in fashion. There’s a lot of wealth, but there’s less action,” he said, noting that the the firm is focusing on revamping its Shanghai flagship this summer and on training and services throughout its network of stores.
“This strategic move to own the [franchise] operation is going to allow us to provide more quality services to the franchisee like the quality of training, the quality of product sampling, so those in our network will be more precise and synchronized with the rest of the world,” he added.
Rising commercial and industrial cities like Chongqing and Chengdu that have around 8 million to 9 million inhabitants have “massive potential,” Gleize reflected. “These kinds of places are second-tier cities but they are huge. So we are very small compared to the size of the city and the business we do is very small still there. It’s about establishing the brand and taking the time to drive organic development,” he added, emphasizing the sector’s heightened interest in smaller cities of even 5 million inhabitants.
During Milan Design Week this year, Roche Bobois unveiled its collaboration with Chinese artist, designer and entrepreneur Jiang Qiong Er for a collection of furniture called the Bamboo Mood collection.
In addition to her work as an artist, Qiong Er is perhaps more widely known in the fashion world for creating Chinese luxury house Shang Xia, which she cofounded in 2009 with Hermès. To fete the collection, the furniture maker is planning a celebration in Shanghai in October, as well as New York in 2025. Gleize said he would not exclude further collaborations with Chinese creatives in the medium-term.
Roche Bobois is a French family business that was founded by François Roche in Paris in 1960. The group is present in 54 countries and has a network of 340 directly operated stores and franchises. It has two brands: Roche Bobois, which caters to high-end customers and makes made-to-order furniture, and Cuir Center, positioned in the mid-range market segment.
The luxury furniture sector, including bath and kitchens, was valued at between 46 billion and 48 billion euros in 2023, Claudia D’Arpizio, a Bain & Co. partner and global head of fashion and luxury, told WWD in April, forecasting low-single-digit growth and contraction for the full year.