Back in 2006, the furniture business was booming.

“You couldn’t go wrong,” said furniture retailer Will Schafer.

Liz Buczynski and Jack Fox of Matawan shop for bedroom furniture in the Ashley Furniture store in Eatontown. / MARY FRANK/STAFF PHOTOGRAPHER

Schafer, who owns Ashley Furniture HomeStores in Linden, North Brunswick and Woodbridge, had his eyes set on Monmouth County and planned to build and open two stores.

But a year later, the housing market, which has tight ties to the furniture industry, began to unravel and Schafer put his expansion plans on hold. “We were delayed because we wanted to see where the storm landed,” he said.

Now the clouds have thinned for Schafer. He recently opened Ashley Furniture HomeStore in the former Levitz location on Route 35 in Eatontown. Schafer plans to open another store at the Freehold Raceway Mall in a space once home to CompUSA, adjacent to AMC Loews Freehold Metroplex 14.

Will Schafer owns the new Ashley Furniture store in Eatontown. He plans to open another store in Freehold Township. MARY FRANK/STAFF PHOTOGRAPHER

“We are looking at when the turnaround comes, we want to be poised to be one of the players in the marketplace,” said Schafer, 41, a licensee for Ashley Furniture HomeStores, which according to Furniture Today is the largest furniture store by sales.

The troubled economy and downturn in the housing market has played havoc on the furniture industry. It followed boom years when consumers took out home equity loans, fueled by a run-up in home prices, and used the money to spend on everything from home improvements to cars and furniture.

In 2007, Levitz Furniture declared bankruptcy. Seaside Furniture, a fixture on Route 37 in Toms River, closed earlier this year. Also, La-Z-Boy Furniture Galleries on Route 35 in Ocean Township closed. Last month, Secaucus-based Arts des Provinces de France, Inc., the parent company of high-end furnishings retailer Pierre Deux, filed for bankruptcy liquidation and closed its downtown Red Bank store.

But there are signs of a turnaround. Besides Schafer’s bid to open two stores in Monmouth County, Gelco Furniture in Ocean Township and Toms River is buying Seaside Furniture and plans to reopen the Route 37 location. High-end department store Lord & Taylor plans to open a Lord & Taylor Home Store on Route 35 in Shrewsbury, a former Linens N Things location.

Let’s take a look at the numbers.

In 2006, household furniture shipments began a four-year decline, dropping 2.5 percent that year over 2005, according to Smith Leonard PLLC, a High Point, N.C., accounting and consulting firm that studies the furniture industry.

The losses steepened in the years that followed and by 2009, deliveries dropped 15.5 percent, the firm said in a report.

But last year’s improvements to the economy dusted off the industry, which saw deliveries rise 7 percent in 2010, the report said. New orders were up 4 percent in this year’s first quarter, the study said.

But the recovery is fragile. High gasoline prices, stalled employment and a shaky European economy continue to weigh on consumer confidence, the firm said. “Business seems to pick up for a while then fall off again,” the report states. “The overall economy just cannot seem to get going.”

Income and home sales are not rising rapidly, said economist Joel Naroff, president of Naroff Economic Advisors in Holland, Pa. “I am expecting furniture sales to slowly trend upward” along with home sales, Naroff said.
But improvement will come after several years of declines, he said. “There’s a lot of people who probably in the last two or three years really would have liked to have dumped their junk,” Naroff said. “Slowly, not frequently, slowly they will start upgrading.”

Retail real estate agent Raymond J. Rapcavage said home stores are opening their doors.

“The housing industry is so stressed out and it’s stagnant to the point that people are gravitating toward the second-best thing they can do if they are going to stay in their house, and that is improve it,” said Rapcavage, president of Ray Rap Realty in Rumson, which represented Schafer in the Eatontown lease.

Schafer witnessed the downturn and saw what was happening with the decline in home sales. “We trail that like peanut butter and jelly,” he said. “We started to see instantaneous dips in sales starting in 2007, and that trended through 2009 where it kind of leveled off.”

But the shakeout created opportunities, he said. “A lot of strong independent retailers have unfortunately not been able to weather the recession storm and it’s sad. I know several of them. (But) obviously there is a certain amount of market share penetration to be gained.”

His distribution center is in North Brunswick, so stores in Monmouth County help to maximize his efficiencies, Schafer added.

“We were able to navigate through these economic times,” Schafer said. “We’re ready to expand our sales. We have the distribution in place.”