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 13,500 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 14-15 workers, and generates about $4-5 million annually.

    • The furniture store industry consists of about 13,500 companies that employ about 199,400 workers and generate about $63 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 Rooms to Go, Cost Plus (World Market), and Haverty's.
                              Industry Forecast
                              Furniture Stores Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Nov 17, 2022 - Bedding Manufacturers Focus on Mid-Market Offerings
                              • At the recent High Point Market furniture trade show in North Carolina, several mattress vendors highlighted their mid-market products with retail prices between $599 to $999, according to Furniture Today. Amid high inflation and rising interest rates, furniture retailers want more products with a price point between budget mattresses on the low end and the higher-tiered offerings. During the pandemic, some furniture retailers focused on the high and low ends of the pricing spectrum. However, many now view the middle market as the “sweet spot” as price-conscious shoppers look for a high-quality mattress and a mid-level price.
                              • High interest rates, elevated building materials prices, and a lack of affordable inventory pushed home builder sentiment lower in November, according to the National Association of Home Builders (NAHB). Homebuilder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell five points to 33 in November 2022 from 38 in October, marking the 11th consecutive monthly decline. Any HMI reading over 50 indicates more builders see conditions as good than poor. Amid weak buyer traffic, 37% of homebuilders reported cutting prices in November compared to 26% who reduced prices in September, according to the NAHB. A weaker housing market could reduce demand for furniture as people often buy new furniture after purchasing a home.
                              • Online furniture and home goods retailer Wayfair saw its sales decline 9% year over year to $2.8 billion in Q3 2022, according to Retail Dive. In a recent press release, the firm announced that between Q2 and Q3, it lost about one million customers or about 4% of its total customer base. Early in the pandemic, Wayfair enjoyed strong growth as shoppers shifted to e-commerce and spent more on sprucing up their homes. More recently, consumers have pivoted back to in-person shopping. Additionally, many shoppers on Wayfair tend to make a lot of impulse purchases, which are among the first expenses to be cut during tough economic times, according to GlobalData.
                              • Furniture and home furnishings are among a group of items for which inflation tends to be “sticky,” and prices for such products could remain high even after overall inflation begins to abate, according to The Wall Street Journal. The Atlanta Fed designates an item “flexible” when its price changes more often than about every four months, while products labeled “sticky” take more than four months to see prices move. Furniture, home furnishings, and appliances are among products deemed sticky by the Atlanta Fed, while flexible categories include fresh fruits and vegetables, shoes, and clothing. Amid persistently high prices, consumers may postpone purchases of sticky, big-ticket items, such as furniture and mattresses, for more extended periods of time.
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