Haverty Furniture Companies, Inc. (HVT): Business Model Canvas [10-2024 Updated]

Discover the innovative Business Model Canvas of Haverty Furniture Companies, Inc. (HVT), a key player in the furniture industry. This model intricately outlines how Haverty creates value through strategic partnerships, engages diverse customer segments, and maintains a robust cost structure. Dive deeper to explore their unique value propositions, key activities, and revenue streams that drive their success in a competitive market.

Haverty Furniture Companies, Inc. (HVT) - Business Model: Key Partnerships

Suppliers of raw materials and furniture components

Haverty Furniture relies heavily on a network of suppliers for raw materials and furniture components. The company sources materials such as wood, fabric, and metal from various suppliers to manufacture its products. In 2024, the cost of goods sold (COGS) was reported at $213.6 million for the nine months ended September 30, compared to $259.7 million in 2023. This indicates a strategic effort to optimize costs while maintaining quality through careful supplier partnerships.

Logistics and delivery service providers

Haverty manages its logistics internally, which includes warehousing and delivery operations. The company does not outsource delivery services, ensuring control over delivery costs, which amounted to a decrease of $3.6 million in warehouse and delivery costs in 2024. This reflects a focus on efficiency and customer satisfaction through reliable service delivery.

Financial institutions for customer financing options

Partnerships with financial institutions are crucial for Haverty's customer financing options. The company provides financing solutions that facilitate customer purchases, especially for big-ticket items. The discount paid for third-party financing is included in selling expenses, which totaled $104.9 million in variable SG&A expenses for the nine months ended September 30, 2024. This partnership helps to enhance customer purchasing power and drive sales.

Marketing and advertising agencies

Haverty collaborates with various marketing and advertising agencies to promote its brand and products. The company has increased its advertising expenses in 2024, which are expected to rise as part of its strategy to enhance customer engagement. This aligns with their goal of driving traffic and improving sales performance amid a competitive landscape.

Design consultants for customer engagement

Design consultants play a significant role in Haverty's business model, contributing to customer engagement strategies. In 2024, design consultants accounted for 34.5% of written business, up from 29% in 2023. This increase indicates a growing emphasis on personalized customer service and design expertise, enhancing the overall shopping experience.

Partnership Type	2024 Financial Impact	Notes
Suppliers of raw materials	COGS: $213.6 million	Strategic cost optimization in sourcing materials
Logistics Providers	Decrease in delivery costs by $3.6 million	Internal delivery management to enhance efficiency
Financial Institutions	Variable SG&A Expenses: $104.9 million	Facilitates customer financing for larger purchases
Marketing Agencies	Increased advertising expenses	Focus on enhancing brand visibility and customer engagement
Design Consultants	34.5% of written business	Emphasis on personalized shopping experiences

Haverty Furniture Companies, Inc. (HVT) - Business Model: Key Activities

Manufacturing and sourcing of furniture

Haverty Furniture Companies, Inc. focuses on sourcing and manufacturing a wide range of furniture products, emphasizing quality and design. The company collaborates with various domestic and international manufacturers to ensure a diverse product line that meets customer expectations. In 2024, the company's cost of goods sold was approximately $213.6 million for the nine months ended September 30.

Retail operations through showrooms

Havertys operates 126 showrooms across 17 states, providing customers with an extensive selection of furniture and home decor items. The company reported net sales of $175.9 million for Q3 2024, reflecting a decrease of 20.2% compared to Q3 2023. Sales per square foot in 2024 was $164, down from $199 in 2023, indicating a need for improved showroom performance.

Metric	Q3 2024	Q3 2023
Net Sales	$175.9 million	$220.3 million
Sales per Square Foot	$164	$199
Average Ticket	$3,365	$3,284

Marketing and promotional campaigns

Havertys engages in various marketing and promotional activities to attract customers and drive sales. The company reported a total of $100.9 million in selling, general, and administrative expenses for Q3 2024, which included marketing costs. The marketing strategy emphasizes customer engagement and brand positioning in a competitive market.

Customer service and support

Havertys places a strong emphasis on customer service, with design consultants accounting for 34.5% of written business in 2024, up from 29.0% in 2023. This highlights the company's commitment to providing personalized service. Customer support also includes after-sales services, which are crucial for maintaining customer satisfaction and loyalty.

Inventory management and logistics

Effective inventory management is vital for Havertys, as evidenced by its reported inventory levels of $88.7 million as of September 30, 2024. The company has streamlined its logistics to reduce costs and improve delivery times. In Q3 2024, warehouse and delivery costs decreased by $3.6 million compared to the previous year, reflecting improved operational efficiency.

Inventory Management Metrics	Q3 2024	Q3 2023
Ending Inventory	$88.7 million	$102.3 million
Warehouse and Delivery Cost Reduction	$3.6 million	N/A

Haverty Furniture Companies, Inc. (HVT) - Business Model: Key Resources

Retail Showrooms

Haverty Furniture operates 126 retail showrooms across 17 states in the Southern and Midwestern regions of the United States. This extensive network allows the company to effectively reach a broad customer base and provide localized service.

Skilled Workforce

The company's workforce includes a significant number of design consultants, who accounted for 34.5% of written business in 2024, compared to 29.0% in 2023. These consultants enhance customer experience and drive sales through personalized service and expertise in home furnishings.

Brand Reputation

Haverty Furniture enjoys a strong brand reputation in the furniture industry, established over its long history since 1885. The company is recognized for providing quality merchandise in the middle to upper-middle price ranges, which contributes to customer loyalty and brand equity.

Financial Capital

As of September 30, 2024, Haverty Furniture reported no outstanding debt and had a credit availability of $80 million. The company also had $127.4 million in cash and cash equivalents, reflecting strong financial health and the capacity to invest in growth opportunities.

Supply Chain and Vendor Relationships

Haverty Furniture maintains a robust supply chain and strong vendor relationships, which are crucial for ensuring product availability and quality. The company's operational efficiency is supported by strategic partnerships that facilitate timely delivery and competitive pricing.

Key Resource	Details
Retail Showrooms	126 retail showrooms across 17 states
Skilled Workforce	34.5% of written business attributed to design consultants in 2024
Brand Reputation	Established brand known for quality in middle to upper-middle price ranges
Financial Capital	No outstanding debt; $127.4 million in cash and cash equivalents; $80 million credit availability
Supply Chain	Strong vendor relationships supporting operational efficiency

Haverty Furniture Companies, Inc. (HVT) - Business Model: Value Propositions

High-quality, stylish furniture at competitive prices

Haverty Furniture Companies, Inc. positions itself in the market by offering a diverse range of high-quality, stylish furniture. The company's product lines include living room, bedroom, and dining room furniture, as well as home decor items. As of 2024, Havertys reported net sales of $538.5 million for the nine months ended September 30, 2024, down from $651.4 million in the same period of 2023. This decline reflects competitive pricing pressures in the furniture retail sector.

Personalized customer service and design consultations

Havertys emphasizes personalized customer service, providing design consultations that account for 34.5% of written business in 2024, an increase from 29.0% in 2023. This approach not only enhances customer satisfaction but also differentiates the brand in a crowded marketplace. The company employs trained design consultants who assist customers in selecting furniture that meets their specific needs and preferences.

Wide variety of products catering to different customer segments

The company offers a wide range of products aimed at various customer segments, including middle to upper-middle-class consumers. As of September 30, 2024, Havertys operated 126 showrooms across 17 states. The average ticket size for purchases increased to $3,365 in 2024 compared to $3,284 in 2023, indicating a growing customer willingness to invest in quality furniture.

Commitment to sustainability and responsible sourcing

Havertys is committed to sustainability and responsible sourcing practices. The company has implemented initiatives aimed at reducing its environmental footprint through sustainable materials and processes. This commitment is increasingly important to consumers, making it a critical component of Havertys' value proposition.

Strong warranty and return policies

Havertys offers strong warranty and return policies, which are essential in building customer trust and loyalty. The company's policies provide customers with reassurance regarding their purchases, enhancing the overall shopping experience. This aspect of the value proposition is crucial, especially in the context of high-ticket items like furniture.

Metric	2024	2023	Change
Net Sales (in millions)	$538.5	$651.4	-20.2%
Average Ticket Size	$3,365	$3,284	+2.5%
Design Consultants Contribution to Sales	34.5%	29.0%	+5.5%
Number of Showrooms	126	126	No Change
Gross Profit Margin	60.2%	60.8%	-0.6%

Haverty Furniture Companies, Inc. (HVT) - Business Model: Customer Relationships

Personalized service through trained design consultants

Haverty Furniture employs trained design consultants who play a significant role in enhancing customer experience. In 2024, design consultants accounted for 34.5% of written business, up from 29.0% in 2023 . This increase reflects the company's focus on personalized service that caters to individual customer needs, providing tailored furniture solutions and design advice.

Customer loyalty programs and incentives

Haverty Furniture has implemented customer loyalty programs designed to incentivize repeat purchases. In 2024, the company reported a 15.3% decline in total written business compared to the previous year, indicating the need for robust loyalty strategies . The company continues to refine its marketing strategies to enhance customer retention and drive sales through targeted promotions and benefits for loyal customers.

Regular communication via newsletters and promotions

Regular communication with customers is a cornerstone of Haverty Furniture’s strategy. The company utilizes newsletters and promotional campaigns to keep customers informed about new products, sales events, and design tips. In 2024, the company allocated a portion of its increased advertising expense to enhance these communication efforts, reflecting a commitment to engaging with its customer base consistently.

Responsive customer service channels

Haverty Furniture has established multiple customer service channels to ensure responsive support. The company reported that selling, general, and administrative expenses (SG&A) accounted for 57.4% of sales in 2024, indicating a substantial investment in customer service infrastructure . This includes both in-store and online support, allowing for timely resolution of inquiries and issues faced by customers.

Engagement through social media and community events

Haverty Furniture actively engages with its customers through social media platforms and community events. The company recognizes the importance of building a community around its brand. In 2024, Haverty’s engagement initiatives were supported by an increase in advertising expenditure, which was necessary to bolster its presence on social media and at local events . This approach not only drives brand awareness but also fosters a sense of belonging among customers.

Category	2023 Data	2024 Data	Change
Design Consultants Contribution to Business	29.0%	34.5%	+5.5%
Total Written Business Decline	-	-15.3%	-
SG&A as % of Sales	51.1%	57.4%	+6.3%
Advertising Expense Increase	-	Increased	-

Haverty Furniture Companies, Inc. (HVT) - Business Model: Channels

Physical retail showrooms for direct customer interaction

Havertys operates 126 showrooms across 17 states in the Southern and Midwestern regions of the United States. In 2024, the company plans to increase retail square footage by approximately 3.4% compared to 2023, aligning with its strategy to enhance customer interaction through physical locations.

Online store for e-commerce sales

The online store has become a significant channel for Havertys. As of Q3 2024, the company reported total sales of $175.9 million, with e-commerce contributing to the overall sales decline of 20.2% year-over-year. The average ticket size for online purchases was $3,365, reflecting a competitive positioning in the online furniture market.

Social media platforms for marketing and customer engagement

Havertys utilizes various social media platforms to engage with customers and promote its products. The marketing strategy includes targeted advertisements and customer engagement initiatives that aim to enhance brand visibility and attract traffic to both online and physical stores.

Home delivery services for customer convenience

Havertys provides home delivery services, which are integral to its customer experience strategy. The company does not outsource delivery; instead, it manages its own delivery operations, which include personnel and logistics costs. This approach allows for better control over service quality and costs.

Partnerships with interior designers and decorators

In 2024, design consultants accounted for 34.5% of written business, up from 29.0% in 2023. These partnerships enhance Havertys’ service offerings and provide customers with professional guidance on furniture selection and home decor.

Channel	Details	Impact on Sales
Physical Retail Showrooms	126 locations, expanding by 3.4% in 2024	Contributes to overall sales, crucial for customer interaction
Online Store	Average ticket size: $3,365; total online sales included in $175.9 million	Part of the 20.2% decline in total sales
Social Media	Targeted ads and customer engagement strategies	Enhances brand visibility; measurable impact on traffic
Home Delivery Services	In-house delivery management	Improves customer satisfaction and retention
Partnerships with Designers	34.5% of written business from design consultants	Increases sales through professional recommendations

Haverty Furniture Companies, Inc. (HVT) - Business Model: Customer Segments

Middle to upper-middle income households

Havertys primarily targets middle to upper-middle income households, which represent a significant portion of their customer base. According to market research, this demographic typically has annual incomes ranging from $50,000 to $150,000. As of 2024, Havertys' product offerings are designed to appeal to these households by providing quality furniture at competitive prices.

First-time home buyers seeking affordable furniture

First-time home buyers are a critical segment for Havertys, especially in the current housing market. Recent data indicates that first-time home buyers constituted approximately 29% of all home purchases in 2024. This group is often looking for affordable yet stylish furniture options to furnish their new homes without overspending. Havertys aims to cater to this market by offering financing options and promotions tailored for new homeowners.

Families looking for durable and stylish home furnishings

Families represent a substantial customer segment for Havertys, as they seek durable and stylish home furnishings that can withstand daily use. The National Retail Federation reported that families spend an average of $1,500 to $3,000 on furniture every few years. Havertys positions itself by emphasizing the quality and longevity of its products, appealing to families who prioritize both aesthetics and functionality.

Young professionals furnishing their apartments

Young professionals are increasingly becoming key customers for Havertys. This demographic, often aged 25 to 35, tends to favor modern and trendy furniture that fits their lifestyle. In 2024, studies show that young professionals are spending about $2,500 on average to furnish their apartments. Havertys targets this group with a mix of contemporary designs and affordable pricing strategies, ensuring they can create stylish living spaces.

Interior designers and decorators for project-based sales

Havertys also targets interior designers and decorators, who account for a notable portion of their project-based sales. In 2024, design consultants contributed approximately 34.5% of written business, up from 29.0% in 2023. This segment is crucial as designers often seek quality furnishings for their clients and are likely to recommend Havertys for large-scale projects due to its diverse product range and reliability.

Customer Segment	Characteristics	Average Spending	Market Share
Middle to Upper-Middle Income Households	Annual incomes $50,000 - $150,000	$2,500 - $5,000	40%
First-time Home Buyers	29% of all home purchases	$1,500 - $3,000	25%
Families	Seeking durable and stylish furnishings	$1,500 - $3,000 every few years	30%
Young Professionals	Aged 25-35, modern style preferences	$2,500	15%
Interior Designers	Project-based sales, high volume	$5,000 - $10,000 per project	10%

Haverty Furniture Companies, Inc. (HVT) - Business Model: Cost Structure

Cost of goods sold including materials and manufacturing

The cost of goods sold (COGS) for Haverty Furniture Companies, Inc. for the third quarter of 2024 was $69.995 million, a decrease from $86.349 million in the same period of 2023. For the nine months ended September 30, 2024, COGS totaled $213.625 million compared to $259.712 million for the same period in 2023. This reflects a gross profit margin of 60.2% for the third quarter of 2024, down from 60.8% in 2023.

Selling, general, and administrative expenses

For the third quarter of 2024, total selling, general, and administrative (SG&A) expenses were $100.940 million, compared to $112.729 million in the third quarter of 2023. Total SG&A expenses for the nine months ended September 30, 2024, were $313.395 million, down from $341.106 million in 2023. SG&A expenses as a percentage of sales increased to 57.4% from 51.1% year-over-year.

Expense Type	Q3 2024 ($ million)	Q3 2023 ($ million)	YTD 2024 ($ million)	YTD 2023 ($ million)
Variable SG&A	33.200	42.300	104.900	128.200
Fixed SG&A	67.700	70.400	208.500	212.900

Marketing and advertising expenditures

While specific figures for marketing and advertising expenditures for 2024 were not disclosed, the company has indicated an increase in advertising expense, counteracting reductions in other areas such as incentive compensation. The overall increase in fixed and discretionary SG&A expenses for the full year of 2024 is projected to be in the range of $279.0 to $281.0 million.

Rent and utilities for retail locations

The occupancy costs, which include rent and utilities, increased by approximately $1.8 million primarily due to previous reductions in rent expenses related to lease incentives. Specific rent and utilities costs were not detailed, but these are incorporated within the SG&A expenses.

Salaries and benefits for employees

Salaries and benefits for employees constitute a significant portion of the variable SG&A expenses. The reduction in selling expenses by $6.2 million is largely attributed to variable costs tied to commissioned-based compensation. Overall, employee compensation and benefits remain a critical focus area for cost management.

Haverty Furniture Companies, Inc. (HVT) - Business Model: Revenue Streams

Sales from furniture and home decor products

In the third quarter of 2024, Haverty Furniture reported total net sales of $175.9 million, a decrease of 20.2% from $220.3 million in the same period of 2023. For the nine months ended September 30, 2024, net sales were $538.5 million, down from $651.4 million in 2023.

Financing options and interest income from customer loans

Haverty's financial results indicate interest income of $4.6 million for the nine months ended September 30, 2024, compared to $3.7 million in the same period in 2023. This reflects the company's strategy to offer financing options to customers, contributing to its overall revenue stream.

Delivery and assembly fees

While specific figures for delivery and assembly fees are not disclosed separately, these fees are typically included within the selling, general, and administrative expenses (SG&A). In the third quarter of 2024, SG&A expenses amounted to $100.9 million, representing 57.4% of total sales.

Extended warranty and service plans

Haverty Furniture also generates revenue through extended warranty and service plans, although exact figures for this revenue stream are not publicly available. The company's gross profit margin for 2024 is approximately 60.2%, with the margin being essential in maintaining profitability across various service offerings.

Online sales through e-commerce platform

Haverty's online sales performance is part of its overall sales strategy. The company has focused on enhancing its e-commerce platform to capture a growing segment of online shoppers. The average ticket size for sales in 2024 was $3,365, an increase from $3,284 in 2023, indicating a successful strategy in attracting higher-value transactions.

Revenue Stream	2024 Q3 Sales ($ millions)	2023 Q3 Sales ($ millions)	2024 Nine Months Sales ($ millions)	2023 Nine Months Sales ($ millions)
Furniture and Home Decor Products	175.9	220.3	538.5	651.4
Interest Income from Customer Loans	4.6	3.7	4.6	3.7
Delivery and Assembly Fees	Included in SG&A	Included in SG&A	Included in SG&A	Included in SG&A
Extended Warranty and Service Plans	N/A	N/A	N/A	N/A
Online Sales	N/A	N/A	N/A	N/A

Article updated on 8 Nov 2024

Resources:

1. Haverty Furniture Companies, Inc. (HVT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Haverty Furniture Companies, Inc. (HVT)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Haverty Furniture Companies, Inc. (HVT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.