Furniture Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 12,800 furniture retailers in the US sell new furniture and furniture-related goods, such as appliances, home electronics, home furnishings, and floor coverings. Major product categories include living room, dining room, and bedroom furniture; upholstered furniture; sleep equipment (mattresses, waterbeds); kitchen/dinette furniture; office furniture; and sleeper sofas, daybeds, and futons. Companies may specialize in a particular type of product (sofas, beds), style (contemporary, traditional), or price tier.
Dependence On Credit
Furniture is a large ticket purchase and many consumers depend on credit for funding.
Competition From Alternative Retailers
Furniture stores compete with a variety of alternative retailers, including department stores, retail arms of furniture manufacturers, mass merchandisers, warehouse clubs, home furnishings stores, and Internet and catalog retailers.
Industry size & Structure
The average furniture store operates out of a single location, employs 16 workers, and generates about $5.8 million annually.
- The furniture store industry consists of about 12,800 companies that employ about 212,000 workers and generate about $75 billion annually.
- Some companies are vertically-integrated - large retailers, such as Ethan Allen, may produce proprietary lines of furnishings.
- The industry is fragmented; the top 50 firms account for 51% of industry sales.
- Large companies include Ashley Furniture, Rooms to Go, Mattress Firm, and Haverty's.
Industry Forecast
Furniture Stores Industry Growth
Recent Developments
Nov 15, 2024 - Inflation Flat, Employment Down
- Producer inflation for furniture stores was flat in September 2024 compared to a year ago, according to producer price data released by the US Bureau of Labor Statistics (BLS). Employment at furniture stores fell 5% in September 2024 year over year and remains below pre-pandemic levels. Average wages for nonsupervisory employees in the industry were up 2.3% in September 2024 compared to a year ago, reaching $26.41, per the BLS. Economic activity in the services sector including the retail sector expanded in October 2024, according to the Services ISM Report on Business. The Services PMI registered 56% in October, up 1.1 percentage points from September, marking the fourth consecutive month of expansion. Of the 14 of the 18 services industries reporting growth in October, Retail Trade reported the fastest growth during the period.
- Furniture costs are expected to increase according to a new study by the National Retail Federation (NRF) of the estimated impact of president-elect Donald Trump’s tariff proposals. The study looked at the effect of tariffs on prices of major consumer product categories including apparel, toys, furniture, household appliances, footwear and travel goods. Trump has proposed a universal 10-20% tariff on imports from all countries and an additional tax on imports from China. Per the NRF study, consumers would pay $13.9 billion to $24 billion more for apparel, $8.8 billion to $14.2 billion more for toys, $8.5 billion to $13.1 more for furniture, and $6.4 billion to $10.9 billion more for household appliances with the proposed tariffs in place. The study showed the tariffs would have a “significant and detrimental impact” on the costs of a wide range of consumer products, in particular those products supplied primarily by China. US retailers would be unable to absorb the increased costs and would need to raise prices “higher than many consumers would be willing or able to pay.” According to Jonathan Gold, NRF vice president of supply chain and customs policy, “Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices. A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”
- Consumer confidence levels increased in October 2024, improving in all five components of the Consumer Confidence Index, according to The Conference Board. The index was 108.7 in October 2024 from 99.2 in September 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those between the ages of 35 to 54 and those in the income category of over $100,000. Per Peterson, “Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years.” Plans to purchase homes and new cars rose on a six-month average basis.
- A $4 billion acquisition by mattress manufacturer Tempur Sealy of retailer Mattress Firm has been blocked by the Federal Trade Commission, due to competition and pricing concerns, according to the Wall Street Journal. In July, the FTC issued an administrative complaint and authorized a lawsuit in federal court to stop the deal. According to the FTC, “The proposed vertical acquisition would merge Tempur Sealy’s manufacturing and supply operations with Mattress Firm’s vast retail footprint, giving the combined company enormous power at multiple parts of the mattress supply chain.” Tempur Sealy expressed confidence in the deal and noted that Mattress Firm holds only a small percentage of US storefronts selling bedding products. In addition, the company said in a statement that it is open to divesting stores to complete the deal if necessary. Tempur Sealy expects it could still complete the deal by the end of the year or early 2025 if it pursues a successful litigation process, per the report. A hearing on the matter has been scheduled by the FTC for December 4, 2024, according to Furniture Today.
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