From Mattress Mergers to Market Shifts: Key Furniture Insights & Supply Chain Threats
Your go-to source for quick, insightful updates on the ever-changing furniture industry—delivered through this blog and our podcast (Furniture Industry News) to keep you and your team in the know.
Mattress Warehouse's Major Acquisition
Mattress Warehouse is making a significant move by acquiring 176 stores from Sleep Outfitters and Mattress Firm. This deal includes:
107 Sleep Outfitters locations
73 Mattress Firm stores
Seven distribution centers
This expansion is a substantial leap for Mattress Warehouse, which already operates over 320 stores. The acquisition is linked to Tempur Sealy's proposed $4 billion takeover of Mattress Firm. While the deal faces scrutiny from the Federal Trade Commission, Tempur Sealy is optimistic about finalizing it by early 2025.
If everything proceeds as planned, Mattress Warehouse will be well on its way toward its goal of running 500 stores by 2028. This strategic move is set to strengthen their market position and could offer enhanced opportunities for both customers and employees.
Rising Demand for Credit in Furniture Retail
In the furniture retail sector, there's a noticeable increase in customers turning to credit to make purchases. This surge in financing options is roughly proportional to overall furniture sales. Contrary to concerns, this hasn't led to a significant spike in delinquencies. Here's why:
Advanced Risk Assessment: Credit providers are using sophisticated tools like AI and machine learning to better assess risk and adapt quickly to market conditions.
Flexible Payment Options: Many companies now offer adjustable payment schedules, allowing customers more leeway in managing their finances.
This combination of technology and flexibility helps keep delinquencies at a manageable level, even with the increased demand for credit.
Consumer Spending Plans: Sofas and Sectionals Lead the Way
Recent research highlights what consumers are eyeing in the home furnishings market:
Top Priority: Sofas and sectionals remain the most sought-after items for upgrading living spaces.
Other Popular Categories:
Area rugs
Decorative accessories
Primary bedroom mattresses
Wall decor
Bedroom furniture
Occasional tables
Lamps
Recliners
Interestingly, most consumers prefer to make purchases in-store rather than online, valuing the ability to see and feel furniture before buying.
Demographic Spotlight:
Consumers aged 18 to 43 make up nearly 70% of those planning to spend on home furnishings.
This trend indicates a shift in buying power and preferences, with younger consumers driving significant market activity.
Potential Labor Strike at U.S. Ports
A looming labor dispute threatens operations at 36 U.S. ports along the East and Gulf Coasts. Key points include:
Union Involved: The International Longshoremen's Association (ILA) represents tens of thousands of maritime workers.
Strike Deadline: If a new contract isn't reached by September 30th, a strike may commence.
Historical Context: This would be the first national longshoremen's strike since 1977.
Union Demands:
Better wages
Protections against automation
Potential Impact:
Disruption at major ports, including six of the ten busiest in the country.
Over 13 million containers handled annually could be affected.
Retailers and manufacturers face challenges as the holiday shopping season approaches.
Industry Response:
Urgent calls for both sides to reach an agreement.
Concerns over supply chain disruptions leading to shortages and price increases for consumers.
Adjustable Bed Bases: From Medical Necessity to Lifestyle Luxury
The adjustable bed base market is experiencing significant growth and evolution:
Changing Perceptions: Once seen mainly as medical devices, adjustable bases are now popular lifestyle products.
Retail Opportunities:
Chance to increase average ticket sales by offering adjustable bases as add-ons.
Appeals to a broader customer base, including younger and tech-savvy consumers.
Innovations:
Smart home integration
Customizable positions
Continuous improvements to meet evolving consumer needs
As awareness of adjustable sleep benefits grows, this segment is expected to maintain its upward trajectory, offering retailers a valuable opportunity to diversify product lines and boost sales.
Macy's Home Department Faces Sales Decline
Macy's is grappling with challenges in its home department:
Sales Drop: Home sales fell by double digits in the first six months of the fiscal year.
Comparison with Other Departments:
Women's accessories, shoes, and cosmetics: Slight dip of less than 0.5%.
Men's and kids' clothing: Decreased by about 4%.
Second Quarter Figures:
Home sales dropped over 10% to $771 million.
While an improvement from the first quarter, the decline remains significant.
Company Response:
CEO Tony Spring noted a slowdown in discretionary item sales across all stores midway through the quarter.
Strategic Plans:
Focusing on gifting strategies for the upcoming fourth quarter, encompassing the holiday season.
Reimagining private label brands in the home department, with updates expected next year.
Stay informed about the latest developments in the furniture industry by subscribing to our newsletter. Thank you for reading Furniture Industry News. We'll be back soon with more updates and insights from the world of furniture.
Listen on Apple Podcasts:
Listen on Spotify: