Summer 2024 Update & Casual Market

Wow - it is incredible how much the world can change in just a few weeks! The US election has been turned upside down, and interest rates (and the stock market) now appear to be dropping. In the residential furniture industry, the Conns/Badcock bankruptcy announcement has created noise for manufacturers, distributors, and other retailers of promotional product. We are also just a week off the heels of two big trade shows – the Atlanta Casual Show and Las Vegas Residential Market. There is much to discuss.

Our team went to Atlanta to attend the annual casual/outdoor furniture market held at AmericasMart, hosted by ANDMORE. Attitudes were mostly positive, and attendance was great. The casual market is one of the bright spots in the residential sector these days, and everyone seems to enjoy the Atlanta location of this show (previously held at Chicago’s Merchandise Mart); this is the market’s 2nd show in Atlanta. Also, kudos to the organizers for holding parallel markets for the broader décor, gift and accessories categories, showing in the upper floors and adjacent buildings. More people create more energy and better opportunities for commerce. 

There were new exhibitors on the temporary floors as well as new permanent showrooms opening up. And more whole home players are entering the category: some via acquisition - like Hooker (Sunset West) and Bassett (Lane Venture) - and others from internal product development such as Century/Hickory Chair, Bernhardt and Vanguard.

We were unable to attend Vegas this year due to several live deals and meetings, but look forward to returning in January for the Winter (cooler weather!) show. It has now been almost 20 years since the WMC opened, and we have attended almost every single one. 

Also, this past week we closed on the sale of an institutional furniture company. It has not been publicly announced - an increasingly popular trend in M&A - to provide buyer and seller time to adjust to new ownership before handling the external noise that can be generated from a transaction. We see positive signs the M&A market is opening, as buyers are seeking transactions and there are plenty of business owners that want to sell.

Trending Topics

Among our travels, we heard lots of comments and several trends worth highlighting:

Politics

With the current polls showing a close race, many importers are talking about diversifying further away from China due to the potential tariff increases (if Trump wins).

Economy

When does the consumer start spending more on the home? With interest rate cuts now imminent, there is some optimism 2025 could produce a positive trend for home purchases and furnishings.

The Conns/Badcock bankruptcy highlights continued softness at retail, particularly at the promotional price point. Who else is on the bubble? Who wins as legacy stores are closed? Strong companies, both retailers and suppliers, are focusing efforts to grab available market share from this displacement.

Baby Boomers

With 73+ million boomers exiting the workforce, selling larger homes, and (eventually) leaving wealth for their millennial children - what effect will this have on the economy and the furniture industry? We know millennials are now larger in number than the boomers, so we suspect they will change the world in some amazing ways. This will be a trend to keep watching for many years to come.

Hospitality

Following two very soft years during the COVID pandemic, the hospitality sector is now surging with new construction and remodeling. FF&E providers are experiencing growth with plans for several strong years to come.

M&A Outlook

The M&A market remains fluid, with some indications of renewal. PE “dry powder’ exceeds $1 trillion and banks have proven resilient. Many buyers are making plans to acquire and grow.

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