Finding an apartment within your budget is hard enough right now — but can you even afford to furnish it once you do?
Maybe not. Between inflation, mortgage rates surpassing 7%, and student loan payments resuming, consumers are sitting tight on their parents’ old sofas.
And that spells bad news for retailers:
- Hooker Furnishings — a manufacturer that sells furniture to Wayfair, Macy’s, and others — reported that Q2 revenue fell 36%.
- Luxury furniture brand Restoration Hardware saw a 19% drop in Q2 revenue.
- Noble House Home Furnishings, which supplies furniture to Amazon and Target, filed for bankruptcy this week, citing decreased demand and inflation.
Plus, people have pulled back on home improvements since the pandemic waned, which means less money being spent on homes overall.
But it’s not just about tighter budgets…
… What consumers want from their furniture has changed.
While buying a bedroom set might’ve once been a time to invest in an heirloom, today’s consumers have gotten used to tossing their dilapidated Ikea furniture after every move.
And it’s created a vicious cycle: Consumers’ appetites for cheap furniture has led to brands using cheap materials, like press board and plywood, in place of solid wood.
With production typically overseas, where labor is cheapest, companies have turned to flat-pack furniture to drive shipping costs down, leaving consumers to deal with a pile of screws (and fights with their spouse) alone.
To make matters worse: Social media means home trends are moving at breakneck speeds, leaving furniture companies racing to keep up.
So what’s next? Dopamine decor, apparently.
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