Enrique Arrillaga had been working with wood for more than twenty years when everything collapsed. "We started to go wrong in 2007. And we held on with our own resources until they ran out in 2014. The sales volume was very low and it was impossible," he says. "We had tried to export, but the product (boards and doors) was not adequate. Since we had nothing to do, my wife and I started a new project with a very clear focus: local manufacturing and final sale through the Internet."

"The technology companies started in a garage and we started in a chicken coop. It's not that cool", laughs Francesc Julià. "My father was a furniture sales agent and in the 80s he set up his own distributor. He put furniture in the chicken coop as his own project that continued to be very local for years. In 2007 the crisis came and it was a disaster: here the furniture fell by 80 %. But we already had one foot outside and export saved us."

The stories of Arrillaga, founder of the Gipuzkoan company Muebles Lufe, and Julià, director of the Girona company Kave Home, are a good summary of what has happened in the last decade in the Spanish furniture sector. Until 2007, a large part of furniture sales in our country went hand in hand with construction. But with the bursting of the bubble, the change in consumer habits and the arrival of cheap furniture, sales fell and dozens of factories disappeared. The worst years of the crisis took away four out of ten companies in the industry.

"There is no longer a cabinetmaker in Valencia. In Gipuzkoa there were many and not anymore. In Catalonia, the same", Pedro Campo, a furniture businessman and president of the Spanish Trade Confederation, recently explained to elDiario.es. "Important factories are few in Spain. And they are pulling. The low-cost did a lot of damage." Navaleno, a well-known solid pine furniture company that dedicated itself to making pallets after the crisis, illustrates this situation. "We sold throughout Spain. But we did not take the step to export," says Miguel Ángel Condado, one of the cooperative members. "Before, people used to get married and they were given lots of junk, but now nobody gives these things away."

The companies that survived did so thanks to foreign markets. And among those that have been maintained and born later there are projects such as Lufe, Kave Home or the Valencian Kenay Home that have understood well where they are (on social networks) and what customers want now (modern furniture that lasts, but is not as expensive as thirty years ago). Another well-known project but positioned in a lower segment is Sklum, the Valencian store that SuperStudio bought and which brings cheap furniture from China. Lufe and Kave Home design and manufacture their own furniture, while Kenay distributes those of third parties (including Kave's). Its mere existence shows that not all the mountains are IKEA and that there is room to compete.

2020 has been a good year in terms of revenue. Muebles Lufe has gone from entering 3.5 million euros to staying close to 6. "At first sales fell, but then orders began to enter and it is being very strong. There are clients who have launched on the internet and will continue And I think we're not doing it wrong," says Arrillaga. In Kave Home, the growth has also been scandalous: they closed 2020 with sales of 75 million euros, 30% more than the previous year. Some of the Spanish furniture companies that survive and have similar billing levels (such as Glicerio Chaves or Martínez Otero, specialized in hospitality) maintain a wholesale business model.

"It's not that we're grateful for the pandemic, but in southern European countries the concept of home has changed. Before it was a space for transit and now it's on the front page," says Julià. "We believe that perception can change and that furniture will once again be as important as before. The goal for next year is to stay close to 100 million."

Muebles Lufe: the "Basque Ikea"

The turning point in the history of Muebles Lufe was the following headline in El País: "The 30-euro bed that triumphs online", whose title read that the company had been renamed "the Basque Ikea". "We went from billing 800,000 euros in 2016 to 2.4 million in 2017," recalls Arrillaga. The rest was the combination of a series of very specific products (beds, shelves, tables, storage and chairs), at an adjusted price, with certified local manufacturing and wood and aimed solely at the end customer. Nothing to distribute in third-party stores.

"It is an honest product, worth what it is worth. We work with very little margin and what there is is not enough to distribute. There are companies that have stores, which have to affect the product because they provide service at street level. Our product does not support these margins: we manufacture at one and sell at 1.1", says the founder. Necessity had a lot to do with this model. "We didn't have the resources to sell to companies and get paid in 120 days or when they wanted. We started with a minimal structure. Getting paid at the time of selling was vital."

Former suppliers to the failed panel company, Indubrik, helped get the project off the ground. "They trusted us. They supplied us with the raw material, they made the website for us at a good price, they left us the factories to start working...", he continues. "They were human beings, neither companies nor banks nor large groups. When we sold something it was phenomenal, because it was an income that came in with very few expenses."

Today, at Muebles Lufe there are more than thirty workers, most of the sales are made in Spain (although they plan to expand to France soon) and the main way of attracting customers is online advertising. "We invested a lot: at first I did it in Google AdWords and now we have an agency. Where most people come from is Instagram. And influencers are very important: people who care about receiving the product, taking good photos and that you makes suggestions. What I'm liking the most about this experience is the information I receive, direct from the user", concludes Arrillaga. "It helps you improve a lot and target the products that are in demand."

Kave Home: furniture 'made in Sils' around the world

The case of the Girona company is different because it never died. That furniture distributor —Julià Grup— set up in a chicken coop grew, began to design its own furniture and created a new brand —Kave Home— to sell to the end customer.

Julià, son of the founder of the same name, makes an analogy with the world of fashion to explain the revolution that his sector is experiencing. "Until thirty years ago, the furniture industry was very local. There were no global manufacturers. If I go to Buenos Aires, Madrid, London or Sydney and ask for clothing brands, they will tell me fifteen or twenty. The first will surely be the same: Zara, H&M, etc. But if I ask about furniture they will only tell me IKEA. There are no big global players yet."

Julià Grup began to internationalize and design its own furniture in 2005. "With the irruption of Asia and international trade, we expanded the catalogue," he says. "And you can't go international if you don't have a different product. There are already many third-party distributors and competing with a foreign distributor is difficult. In 2010 we created a B2B [business-to-business] e-commerce. Customers from all over the world bought from us through of the web. And in 2013 we launched Kave Home, which was the B2C [business-to-consumer] brand. We started selling directly to the end customer and it helped us to gather information, but we still didn't have a relevant brand. In 2017 we already created a team structure and we scaled it. That has been one of the keys to evolution. We are not a furniture store, but a furniture and design brand that controls distribution."

Today, Kave Home continues to sell wholesale, but the percentage of retail sales is increasingly relevant. Of the 75 million invoiced this year, half come from wholesale sales and the other half from sales to final customers. Of that, 80% are online sales and the rest in physical stores. As Lufe and Kenay do, the company invests in Google (and works hard on social networks) to attract customers.

In addition to the website, they have opened twelve of their own stores (in Spain, France, Korea and Peru) and are present in another twenty multi-brand stores. The idea of ​​physical expansion outside of Europe is through franchises. "We partner with local partners. We give them the rights of Kave Home in the country to manage the local website and open stores, have the product in the warehouse and distribute." The company has nearly 300 employees in various offices: the headquarters in Sils (Girona), a logistics center in Fogars de la Selva (Barcelona) and plants in Yecla (Murcia), New Delhi (India), Shenzen (China) and Ho Chimin (Vietnam).

"We have nine designers and we collaborate with external teams. At the head office we prototype and, depending on the product, we manufacture on one site. The upholstery and rest are made in Spain, the textiles in Portugal, the Nordic or Alpine woods, in Eastern Europe and tropical woods in Southeast Asia, polypropylene and metal structures in China", adds the young director.

Looking ahead, they seek to bring manufacturing closer to the country of sale and achieve a recognized brand. Like in the world of fashion. "The design will remain here, but if I sell in Colombia, Peru and Mexico, it is more sustainable to manufacture and distribute there than not to manufacture in Spain and send everything by ship," concludes Julià. "And our goal is for you to go to Buenos Aires or Melbourne, ask about furniture brands and they tell you Kave Home. Become top of mind."