Furniture retailers face existential threat
A worker walks through rows of American-made furniture at Warehouse Showrooms Furniture in Alexandria, Virginia, US. President Donald Trump’s sweeping new tariffs officially took hold Thursday, as he barrels forward with his turbulent push to reshape global trade.
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The Supreme Court struck down President Donald Trump’s so-called “reciprocal tariffs” on Friday. Regardless of the ruling, there’s little comfort to be found for the furniture industry.
Furniture importers are facing steep import duties after the industry was hit with higher tariffs on items such as couches, kitchen cabinets and vanities last fall under section 232 of the Trade Expansion Act.
While Trump’s country-specific “liberation day” tariffs imposed under the International Emergency Economic Powers Act and announced in April were under review by the nation’s highest court, the duties specific to furniture importers, of around 25%, were not.
Compounding the issue is a constant thread of uncertainty plaguing the industry, said Peter Theran, CEO of the Home Furnishings Association, the trade group representing furniture retailers.
The 25% duty on certain furniture imports was supposed to rise to 50% in January, but at the end of December, that plan was pushed back to 2027. Its also become common over the past year for Trump to threaten new tariffs on various imports that never end up getting enacted.
“This is a very, very difficult time to manage your business,” said Theran. “The No. 1 driver of the difficulty of managing your business is unpredictability and an inability to make alternative plans and invest in those plans, because you don’t know what tomorrow will be.”
Rising distress
Tariffs and the uncertainty they’ve brought are the latest blow to the furniture industry, which has been struggling for the past four years and was under pressure well before Trump’s trade war.
During the Covid-19 pandemic, when people were stuck at home and flush with cash, many Americans took the opportunity to refresh their spaces and buy new furniture and decor. Then, low interest rates brought a surge in demand for new homes, which served as a catalyst for furniture buying.
The result was outsized growth across the home goods industry and boom times for furniture.
But as inflation and interest rates began to creep up in 2022, the sector started to sputter, and it later declined for the first time in at least seven years, according to data from Euromonitor.
By the time tariffs came around, home sales had slowed and some furniture companies were already struggling to keep operations afloat and couldn’t manage the sudden increase in fixed costs.
American Signature Furniture, the parent company behind Value City Furniture, declared bankruptcy late last year after nearly 80 years in business. It began liquidation sales at its 89 remaining stores last month.
In a court filing, the company said the aftermath of the Covid pandemic, subsequent shifts in consumer…
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