Market reports, business information and market research - Midnight Croquet. AMA Wall Coverings

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The report contains ORIGINAL research and comment on the UK Wall Coverings industry and provides incisive and thought provoking views on its future development.

Overall Market

Following several difficult years at the start of the 1990's, the market saw some recovery during 1993 and 1994. However, since then sales have been relatively depressed, with decline experienced in 1997/1998, which is continuing in 1999. The major reason for this is the strong fashion trend away from wallpaper to paints, which has accelerated in the last two years.

Rapid product development in the paints market, combined with television programmes such as Changing Rooms, has increased the awareness and interest in the possible effects from paints and the actual DIY activity of painting. However, like many fashion-orientated trends, these are often cyclical, with a likelihood that patterned walls and wallpapering itself will regain popularity at some point in the future.

In addition to the declining home market, the export market for UK wall coverings has also contracted, resulting in a substantial level of oversupply. As a result, there has been intensive price competition affecting the value of the market and significant company activity in terms of redundancies and acquisitions.

Market Sectors

The market for wall coverings can be divided into three end-use sectors - trade commercial, trade domestic and DIY. The largest of these is the DIY sector which accounts for an estimated 73 percent of the market. However, the most buoyant sector has been trade/commercial which has been stimulated by the strong recovery in a number of commercial construction sectors, particularly the leisure market.

Products

The wall coverings market is fundamentally comprised of three types of wall coverings - finished wallpaper, vinyls and woodchip/whites. There has been no significant percentage mix change between these three sectors since 1996, with vinyls accounting for an estimated 62 percent of the total market in value terms.

The majority of product sectors have experienced some decline in overall value size terms, with the exception of smooth non-pasted vinyls and blown vinyls, both of which have seen some growth since 1996.

Borders have continued to see market growth, although this has been more limited than in previous years, while the market for children's designs has also continued to be relatively buoyant.

New technology is beginning to play a greater role in this industry, with developments such as store visualisation systems and digital printed borders introduced in an attempt to stimulate consumer interest and sales.

Supply and Distribution

There have been substantial changes in this industry in terms of suppliers, with several major acquisitions, divestments, re-organisations and redundancies. The company leading the UK wall coverings industry is IHDG (previously Borden Decorative Products) with a number of brands, including Crown, Shand Kydd etc, with an estimated 18 percent market share, followed by Vymura and John Wilman.

Companies targeting the top end of the market include Crowson Fabrics, Osborne & Little, Cornwell Parker, Arthur Sanderson, Colefax & Fowler, Romo Fabrics, Sixten and Cassey etc.

The distribution structure for wall coverings is relatively complex, reflecting a mix between trade and domestic sales. The DIY Multiples continue to dominate the market, increasing their share to 40 percent, followed by Trade Centres with 23 percent, Independents & Specialists, Department/Variety and Furnishing stores.

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1.	INTRODUCTION	6
2.	SUMMARY	8
2.1	OVERALL MARKET	8
2.2	MARKET SECTORS	9
2.3	PRODUCTS	9
2.4	SUPPLY AND DISTRIBUTION	9
3.	ECONOMIC ENVIRONMENT	11
3.1	INTRODUCTION	11
3.2	CONSUMER AND BUSINESS CONFIDENCE	11
3.3	CONSTRUCTION	11
3.3.1	Housing	11
3.3.2	Commercial Construction	12
3.4	GROWTH AND INTEREST RATES	12
3.5	UNEMPLOYMENT	13
3.6	CONCLUSION	13
4.	WALL COVERINGS	14
4.1	INTRODUCTION	14
4.2	MARKET SIZE	14
4.3	MARKET HISTORY	15
4.4	RECENT TRENDS	15
4.5	FUTURE PROSPECTS	20
4.6	END USE SECTORS	22
4.6.1	Overview	22
4.6.2	DIY	23
4.6.3	Trade - Domestic	23
4.6.4	Trade - Commercial	24
4.7	IMPORTS & EXPORTS	24
5.	PRODUCTS	27
5.1	OVERVIEW OF PRODUCT MIX	27
5.2	FINISHED WALLPAPER	29
5.3	VINYL WALL COVERINGS	30
5.3.1	Smooth Vinyls	30
5.4	OTHER WALL COVERINGS	35
5.4.1	Embossed Wall Coverings	35
5.4.2	Woodchips and Lining	36
5.5	OTHER FASHION TRENDS	37
5.5.1	Borders	37
5.5.2	Children's Designs	38
5.5.3	Wall Covering Designs, Patterns & Colours	38
5.5.4	Other Developments	40
6.	SUPPLIERS	42
6.1	INTRODUCTION	42
6.2	MAJOR SUPPLIERS	44
6.2.1	The Imperial Home Decor Group (UK)	44
6.2.2	Vymura	44
6.2.3	Walker Greenbank	45
6.2.4	Fine Decor	46
6.2.5	Graham & Brown	46
6.2.6	John Wilman	47
6.2.7	Forbo-CP	48
6.2.8	Crowson Fabrics	49
6.2.9	Osborne & Little	49
6.2.10	Cornwell Parker	50
6.2.11	Arthur Sanderson	50
6.2.12	Colefax & Fowler	51
6.2.13	Romo Fabrics	51
6.2.14	Sixten & Cassey	51
7.	DISTRIBUTION	53
7.1	DISTRIBUTION STRUCTURE	53
7.2	MAJOR CHANNELS	56
7.3	DIY MULTIPLES	56
7.3.1	Introduction	56
7.3.2	B & Q	57
7.3.3	Homebase	58
7.3.4	Focus Do It All	58
7.3.5	Great Mills	59
7.3.6	Wickes	59
7.3.7	Other DIY Multiples	59
7.4	INDEPENDENTS & SPECIALISTS	60
7.4.1	Hardware & Independent DIY Stores	60
7.4.2	Paint and Wallpaper Specialists	60
7.4.3	Interior Designers	61
7.5	TRADE CENTRES / WHOLESALERS	62
7.5.1	Overall Market	62
7.5.2	S J Dixon	62
7.5.3	Deval Wall Coverings	62
7.5.4	Coleman Brothers	63
7.5.5	Dulux Decorator Centres	63
7.5.6	C Brewer & Sons	63
7.6	DEPARTMENT STORES / VARIETY STORES / FURNISHING MULTIPLES	64
7.6.1	Variety Stores	64
7.6.2	Department Stores	65
7.6.3	Furnishing Multiples	67
7.7	OTHERS	68
7.7.1	Discount Warehouses	68
7.7.2	Builders Merchants	68
7.7.3	Market Stalls	68
8.	KEY MARKET INFLUENCES	69
8.1	THE HOUSING MARKET	69
8.1.1	New House Build	69
8.1.2	House-Moving	70
8.1.3	The Commercial and Industrial Construction Market	71
8.2	POPULATION PROFILE	72
8.3	PERSONAL DISPOSABLE INCOME	74
8.4	EMPLOYMENT/UNEMPLOYMENT	75
8.5	INTEREST RATES AND INFLATION	76
8.6	HOUSEHOLDS	77
9.	FUTURE PROSPECTS	79

CHART 1:	UK WALL COVERINGS MARKET 1992-2001 (£M MSP)	8
TABLE 2:	THE UK MARKET FOR WALL COVERINGS £M MSP 1990-2003	14
CHART 3:	RETAIL PAINTS & WALL COVERINGS MARKET 1986-1998 (INDEX OF SALES, 1986=100)	17
TABLE 4:	percent OF CONSUMERS UNDERTAKING DIY WALLPAPERING 1992-1997	18
CHART 5:	ESTIMATED TREND OF EMPLOYEES IN EMPLOYMENT IN THE WALL COVERINGS INDUSTRY 1994-1998	19
CHART 6:	WALL COVERINGS BY APPLICATION AREA & PURCHASER - 1998 percent BY VALUE	22
TABLE 7:	IMPORTS & EXPORTS OF WALL COVERINGS 1995-1998 BY VALUE (£M MSP)	25
CHART 8:	UK EXPORTS OF WALL COVERINGS TO MAJOR COUNTRIES 1997 AND 1998 BY VALUE	26
CHART 9:	UK MARKET FOR WALL COVERINGS percent VALUE SHARE BY PRODUCT GROUP	28
TABLE 10:	WALL COVERING TYPES - percent SHARE BY VALUE 1998	29
CHART 11:	THE UK WALL COVERINGS MARKET - percent SHARE FOR SMOOTH VINYLS	31
CHART 12:	UK MARKET FOR BLOWN VINYLS percent MIX BY VALUE 1998	33
CHART 13:	UK MARKET FOR BLOWN VINYLS percent MIX BY VALUE 1998	34
TABLE 14:	1998 MARKET SHARES OF MAJOR UK WALL COVERING SUPPLIERS BY VALUE	43
CHART 15:	COMMERCIAL MARKET	54
CHART 16:	DOMESTIC MARKET	55
TABLE 17:	DISTRIBUTION OF WALL COVERINGS BY OUTLET - percent BY VALUE 1998	56
TABLE 18:	NEW HOUSING COMPLETIONS 1990-1998 GREAT BRITAIN ('000)	69
TABLE 19:	NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES 1990-1998	70
TABLE 20:	CONTRACTORS’ OUTPUT - NEW WORK IN THE PRIVATE SECTOR AND RMI 1990-1998 AT CURRENT PRICES (£M)	71
CHART 21:	AGE DISTRIBUTION OF THE RESIDENT UK POPULATION 1997 (‘000)	72
CHART 22:	PDI & SAVINGS RATIO	74
CHART 23:	NUMBER OF EMPLOYEES IN EMPLOYMENT GB - JUNE 1981-98 (MILLIONS)	75
CHART 24:	BASE RATES AND INFLATION (RPI) FROM 1990-2000	76
TABLE 25:	STOCK OF DWELLINGS GREAT BRITAIN – 1983-1998	77
TABLE 26:	AVERAGE HOUSEHOLD SIZE FOR GREAT BRITAIN 1971-1996	78

AM45169 AMA WALL COVERINGS MARKET JULY 1999