The current state of the furniture business has created a zero-sum game in which gains by one player come at the expense of competition. It’s not entirely uncommon, particularly in the post-pandemic era, which has seen the industry stagnate and even move backward.
When the pie is not growing, each slice eaten must come off someone else’s plate.
It’s becoming increasingly apparent that more than a few slices will be up for grabs in the coming months as some companies prove unable to navigate the new tariff and global sourcing environment at a time of stubbornly soft sales.
That does not mean there is no opportunity for growth.
In his most recent conference call, RH CEO Gary Friedman referenced the 2016 Warren Buffett statement, “Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.”
He was using that as a metaphor for the company’s recent stock buyback, describing that as “a washtub bet on ourselves.” However, the metaphor also works more broadly as evidenced by the number of retailers who continue to open new stores, expand into new markets and continue pushing to achieve growth despite the current environment.
For example, take Bob’s, which continues to open stores and enter new markets with seven new locations planned for North Carolina, the retailer’s farthest push South thus far. Ashley remains at a consistent store opening pace, including the opening of its largest ever store last week in Las Vegas. Gardner-White, which has been on a mission to own the Michigan market since the demise of Art Van, continues to open new stores and expand its footprint.
Likewise, Florida stalwart City Furniture added a new Sarasota location earlier this month and has several other in-state locations planned before its planned expansion beyond Florida’s borders, anticipated to occur sometime in 2026.
These examples are just the tip of the iceberg as major retailers continue to expand and capture share at the expense of those closing doors. In the near term, ongoing soft demand, uncertain tariffs and interest rates that remain at market-depressingly-high levels will continue to challenge undercapitalized and less efficient players.
However, for those who recognize the opportunities created by disruption and who have the wherewithal to invest for the longer term there remains a significant opportunity to gain share. The opportunity is no less meaningful on the manufacturing side, where the current tariff environment has put growing numbers of factories under severe financial pressure. While the fallout thus far has been limited, there are growing indications that a wave of closings and/or bankruptcy filings could soon be in the offing.
For those whose financial situation allows them to think beyond the immediate malaise, there are certain to be some very attractive assets available for acquisition. Of course the questions remains, which side of this share battle are you on?