The decline of Dynasty Furniture has been gradual, but the persistent quality issues have significantly contributed to its business struggles. Recently, the company’s wooden bedside tables failed a second-level quality inspection by the Shaanxi Quality Supervision Bureau, marking another blow to its already fragile reputation.
This latest incident has reignited concerns about the company's long-term viability. Once a leading name in Chinese home furnishings, Dynasty Family (01198.HK) was known for its panel furniture and had once dominated the market. However, over the past few years, it has faced a series of challenges, including executive departures, inventory backlogs, and store closures. In 2013, the company reported a loss of HK$456 million, signaling a deepening crisis.
The "quality door" incidents have become a recurring theme. In early 2014, the Guangzhou Quality and Technical Supervision Bureau found that some of Dynasty’s products did not meet safety standards. The company initially claimed the results were from an earlier test and that re-inspections confirmed compliance. But now, with similar findings from Shaanxi, there is little public response, raising questions about the company’s transparency.
Founded in Shaanxi in 1994, Dynasty expanded rapidly, becoming one of China’s largest panel furniture manufacturers. It went public in Hong Kong in 2002 and enjoyed a period of strong growth, especially after becoming the official supplier for the 2008 Beijing Olympics. By 2011, its turnover had reached HK$1.547 billion, and profits surged dramatically.
However, the company’s success was short-lived. Sales began to drop in 2012, and by 2013, it posted its first annual loss. The gross profit margin fell sharply, and the company blamed rising costs, poor inventory management, and market saturation. In 2014, it sold part of its subsidiary, Home Dream Holdings, to raise capital, signaling further financial distress.
Industry experts suggest that Dynasty’s slow response to changing consumer preferences has played a major role in its decline. While panel furniture once dominated the market, solid wood furniture gained popularity in recent years. Dynasty, however, remained heavily focused on panel products, missing out on the shift in demand.
Chairman Xie Jinpeng has acknowledged the need to adapt, stating that the company will increase its production of solid wood furniture. Yet, with mounting debt and declining sales, it remains uncertain whether Dynasty can recover. As the furniture industry continues to evolve, the dynasty family may find itself struggling to keep up.
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