WHAT’S HAPPENING IN THE HOME IMPROVEMENT AND FURNISHINGS INDUSTRY?

Let’s chat about the ever-evolving world of furniture and home improvement. If you follow the industry at all, you’ll know It’s been quite the rollercoaster lately! From post-pandemic-induced demand spikes to rising interest rates and lessened demand, both areas have experienced unprecedented dips in sales over the last two years. You had to know trouble was brewing when Warren Buffett sold off his RH shares, right? 

The pandemic initially sparked a surge in demand for furnishings and home improvement projects as people spent more time indoors, reevaluating their living spaces. However, as economies reopened and priorities shifted, the once-booming sales numbers began to dwindle. The massive uptick in home interest rates and the economy’s record-setting inflation didn’t help either. 

Notably, just in the last year alone, the world has witnessed many long-established brands abruptly shuttering their doors, filing for bankruptcy, and leaving their customers in a very precarious position indeed… I’m looking at you Pirch and Mitchell Gold (to name a very few). Imagine buying $100,000 in appliances only to learn OVERNIGHT that you’re never gonna get those appliances, nor will you get a refund. Cue the massive anxiety and anger. 

When an industry faces such massive swings up, there are bound to be some big dips after the wave, as it starts to restabilize. Many companies in the space were not able to keep up with demand in conjunction with supply chain disruptions and rising material costs which severely slimed margins, and as such, became financially destitute. 

Each week there’s a new set of companies in the news for being in big financial trouble or suffering an alarming dip in sales. Home Depot, Lowes, Burke Decor, Hooker Furniture, Oka, Pier 1, Interior Define (this one in particular nearly broke my firm in trying to retain furniture we ordered but were never delivered), and more…many, many more. 

WHAT YOU CAN DO TO PROTECT YOURSELF

Whether you’re a design professional, enthusiast, or customer, pay attention to the current events in the industry and adhere to the old adage – where there’s smoke, there’s fire. For example, Burke Decor hasn’t shut down (yet), but they’ve quietly stopped delivering on orders. That’s a surefire sign trouble is imminent. 

Outside of keeping an ear to the ground, the best defense I have found is paying for everything with a reputable credit card like American Express. Sometimes there will be credit card processing fees over paying in cash, but you’ll be so happy you ponied up an extra 3% when the card company refunds you after you dispute the charge. If you pay in cash, with a check, or via bank transfer, you have essentially set that money ablaze if the company goes bankrupt. They will not have to fulfill your order, give you a refund, or even say hi for that matter. 

Interior designers, builders, furniture makers, and everyone in the home industry have felt seismic shifts over the last 4 years and we’re all just holding on tight as it starts to stabilize back at the station. Staying educated on current events in the market and within the industry is a helpful way to avoid the pitfalls in front of so many businesses in this space right now. 

*photo by Molly Culver Photography