Increased interest rates and a high inflation rate continue to affect the flooring demand in the residential segment, especially in Europe.
At Kährs we see that the demand for flooring solutions continues to go down from record levels and high orderbooks in 2022, in both renovation and newbuilt in Europe. Within newbuilt the demand is expected to fall sharper towards the second half of 2023 while the renovation segment is expected to recover from low levels in the second half of 2023.
The general high rise in inflation and continuing rising interest rates are affecting the consumer behavior negatively within the residential segment. The low consumer confidence continues to create challenges in demand in Europe moving forward. As previously informed Kährs is preparing and adapting its operations, with a focus on cost control and capacity adjustments in steps, to ensure continued low debt and a strong cash flow.
To adjust capacities and to introduce further efficiency programs to mitigate the effects of lower demand in 2023, Kährs has implemented a plan to lower the capacities in all European factories in steps during the first two quarters 2023. The next step is affecting an additional 90 employees within our European units in addition to the measures already taken in the first quarter 2023. Negotiations with union parties will be initiated and any redundancies are expected to be completed during the second quarter of 2023.
"It is extremely sad to have to part from competent and loyal employees. But we must adapt our production to the prevailing conditions and be even more efficient to be a sustainable and profitable business over time. We will, as in the previous notice, work to find good solutions together with our union negotiating partners," says Carl-Henrik Stenermark COO at Kährs Group and site manager in Nybro.
Despite the downturn, President & CEO Johan Magnusson sees a great need for the company's products and services in the future.
"Despite a challenging market outlook in 2023, households are still increasing their focus on the home and their immediate surroundings as well as the possibility to work from home, which is creating possibilities. In the long term, we continue to be optimistic with more of a focus on both sustainable building and housing quality as well as demand for flooring products with good wood design. There is a great need for renovation and more new buildings in the long term. We will continue to build Kährs to be well equipped to help our customers in the best way in the future as well as to make Kährs an even better workplace," says Johan Magnusson President & CEO at Kährs Group.
For further information, please contact:
Johan Magnusson, President & CEO, Kährs Holding AB (publ), tel: +46 70 540 13 96
Carl-Henrik Stenermark, COO, Kährs Holding AB (publ), tel: + 46 73 087 70 05
Helén Johansson, Corporate Communication, Kährs Holding AB (publ), tel: +46 70 364 60 30
About Kährs Group
Kährs Group is a leading manufacturer and distributor of flooring with the aim of providing customers with experiences beyond expectations. Kährs innovations have shaped the industry throughout its history and the company is dedicated to offering flooring solutions for every room, environment and need. The company delivers sustainable and durable flooring solutions to approx. 70 countries, being a market leader in hardwood flooring in Sweden and Finland, and having strong positions in other key markets, such as Norway, the UK, USA, Germany and Switzerland. The Group has approximately 1,450 employees and annual sales of SEK 4 billion. www.kahrsgroup.com