Hello and welcome to Furniture Industry News.

It's October 24, 2025 and we've got a packed episode for you Today.

We'll be diving into the current economic climate and what it means for consumer mood.

We'll also unpack some of the major challenges facing the industry right now, especially tariffs, and look at how companies are adapting and innovating to stay ahead.

And finally, we'll cover a significant acquisition that's making waves, so let's get right into it.

First, let's take a look at the big consumer sentiment and spending.

The latest survey from the University of Michigan shows that overall consumer sentiment actually dipped in October, hitting a five month low.

The primary culprits are exactly what you'd high prices and persistent inflation.

These concerns are making shoppers pretty hesitant about making big ticket purchases, and that of course includes furniture.

The data shows that about 45% of consumers feel that high prices have directly eroded their personal finances, which puts a real damper on discretionary spending.

But it's not all doom and gloom.

There's a powerful demographic that's bucking the trend Gen X.

A new study from the ICSC reveals some fascinating numbers.

While Gen X only makes up about 19% of the population, they are driving a massive 31% of all retail spending.

They also have the highest average purchase amount across most product categories.

What's more, they tend to be very brand loyal, have a positive outlook on life, and their spending power is projected to keep growing.

This makes them a crucial and perhaps underserved audience for furniture retailers to focus on right now.

Now let's transition from the consumer mindset to the specific headwinds hitting the furniture industry.

Without a doubt, the biggest topic of conversation is tariffs.

The situation has become so critical that the International Home Furnishings Representatives association, or ihfr, has formally written to the White House.

They're urging the administration to reconsider the current tariff structure, emphasizing the profound instability it creates for business planning, for pricing, and for global sourcing strategies.

Tariffs will be a major focus at High Point Market, with Some, like the 25% tariff on upholstery, set to rise even further.

Beyond the tariff issue, the industry is also grappling with a few other significant challenges.

Consumer demand has become unpredictable, the housing market remains weak, and higher interest rates are putting pressure on both businesses and consumers to navigate this complex environment.

The consensus is companies need to focus on building trust with their customers, improving improving their speed to market with new products, and strategically adopting new technology like artificial intelligence to become more efficient.

So how exactly Is the industry adapting?

We're seeing a wave of creative and strategic responses.

One of the most direct strategies is supply chain diversification.

To lessen the impact of tariffs, companies are actively moving production and sourcing to a variety of other countries, including Vietnam, Malaysia, Indonesia and Mexico.

At the same time, there's a renewed push to boost domestic manufacturing, which offers more stability and predictability in an uncertain global market.

On the product side, we're seeing a lot of smart innovation.

Many businesses are introducing smaller scale collections designed specifically for apartment and condo living, catering to a growing segment of the market.

Others are leaning into the increasing demand for US made furniture and custom programs, which allows them to offer unique value.

We're also seeing many companies expand into entirely new categories like outdoor furniture, home accents and lighting as a way to capture new customers and increase their share of the wallet.

Beyond the products themselves, there's a huge focus on enhancing the customer experience.

Companies are realizing that both in store and online interactions are critical for success.

This includes redesigning showrooms to feel more like experience focused galleries rather than just sales floors.

There's also heavy investment in new websites and sophisticated data driven digital marketing campaigns.

And as mentioned, many are exploring how AI can streamline operations and simplify the selling cycle for both sales associates and customers.

Finally, strengthening partnerships is a key theme in this tough period.

Manufacturers are working hard to support their retail partners.

They're offering stronger promotions, developing more flexible and efficient inventory programs like mixed containers that allow retailers to carry less stock, and maintaining a sharp focus on delivering value and quality.

All of this is designed to help retailers protect their margins and thrive in a challenging market.

And that brings us to our final segment today, some major industry news.

GigaCloud technology, a global business to business e commerce firm, has announced it is acquiring New Classic home furnishings for $18 million.

This is a really significant move because it expands Gigacloud, a major player in the online space, squarely into the traditional brick and mortar wholesale world.

New Classic is a well established 25 year old company that serves over 1000 physical retailers.

The good news for their partners is that New Classic will maintain its brand identity and its current management team.

This deal really highlights a growing trend of integrating technology and e commerce with the established wholesale furniture market.

The deal is expected to officially close around January 1, 2026.

So to wrap things up, it's clearly a challenging but also incredibly dynamic time for the furniture industry.

While everyone is facing economic headwinds and uncertainty around trade policy, companies are responding with impressive resilience, creativity and strategic adaptation from diversifying supply chains to innovating products and embracing new technology, the industry is actively shaping its own future.

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