Welcome to Furniture Industry News, the podcast that keeps furniture professionals up to date on what's happening in our industry.

I'm your host and Today is Thursday, August 29, 2025.

Let's start with some encouraging news about retail sales.

Furniture store sales have been showing impressive strength this year, with growth hitting 5.7% for the first seven months of 2025.

That puts us at $78.2 billion in total sales, which is actually performing better than many other retail segments.

To put this in perspective, overall retail sales only grew 3.8% during the same period.

What makes this even more impressive is that we're outpacing categories like restaurants and bars at 5.2% growth, motor vehicle dealers at 5% and clothing stores at 4.2%.

Only a few segments beat us out, including miscellaneous retailers like pet Supply stores at 8.2% and and non store retailers like E Commerce at 6.7%.

This growth comes after nearly 18 months of declines that ended last September, so we're seeing a real turnaround in consumer spending on furniture.

However, there are some challenges ahead that could impact this positive trend.

Homebuilder confidence dropped again in August, marking the 16th straight month of negative readings.

The confidence index fell to 32, which means more builders see conditions as poor rather than good.

This matters for our industry because new home sales directly drive furniture purchases as people need to furnish their new spaces.

Builders are responding to the soft housing market by cutting prices and offering more incentives.

About 37% of builders surveyed reported reducing prices in August with average cuts of 5%.

Meanwhile, 66% are using sales incentives, which is the highest level since before COVID The main culprit here is affordability, which is with mortgage rates staying above 6% and keeping many potential buyers on the sidelines.

Speaking of challenges, there have been major changes to international shipping that are already causing headaches for many businesses.

The Trump administration ended the de minimis rule which previously allowed items under $800 to enter the country without tariffs.

This change affects 92% of all US cargo shipments, up to 4 million packages daily that were previously duty free.

The impact has been immediate and severe.

Some US shoppers are already seeing order cancellations and about 30 foreign postal services, including those from Mexico, India, Switzerland, Japan, the uk, Australia and New Zealand have suspended shipments to the US the administration is using a six month phase in period where carriers can choose between charging a percentage of tariff rates or flat fees of$80,200 per package, depending on the country.

This brings us to the broader topic of tariffs which continue to be a hot button issue in our industry.

While many furniture professionals are feeling the pain of constant changes, there are some who argue that tariffs are actually starting to work.

We're seeing companies like Universal furniture building an 800,000 square foot upholstery facility in North Carolina, RH doubling domestic upholstery output, and Craftmaster reopening a shuttered plant.

Vaughn Bassett has also pledged to expand US Production without immediate price increases.

The argument is that for decades the balance of trade in furniture has been unfair to the US with many companies gaming the system by routing goods through third countries to avoid existing tariffs.

While tariffs are a blunt instrument and cause short term pain, supporters say they're necessary to level the playing field and bring manufacturing jobs back to America.

On the enforcement side, U.S. customs recently accused 23 mattress importers of participating in a major scheme to evade trade duties.

The investigation found that companies were bringing products manufactured in China through countries like South Korea, Indonesia, Taiwan and Vietnam to take advantage of lower duty rates.

This scheme resulted in more than $250 million in revenue owed to the government.

What's particularly interesting about this case is how sophisticated these operations were.

Customs officials visited factory locations only to find that some didn't exist, including one that had been destroyed in a fire in 2023 and never rebuilt.

Many of the companies involved had suspicious U.S. addresses, including locations at strip mall restaurants and Post net shipping centers.

Some were even listed as residential addresses with companies operating as neighbors.

The duty rate differences were staggering.

While Chinese mattresses faced anti dumping rates up to 1,731%, the same products routed through Indonesia only faced a 2.2% duty rate.

Products from these companies were being sold through major retailers like Amazon, Wayfair and Walmart, showing how widespread this type of evasion can be.

Moving to more positive industry news, the American Home Furnishings alliance recently held its marketing and PR conference where industry leaders shared insights about brand storytelling.

The key message was that successful branding depends on authenticity, the right partnerships, and staying true to core values while being willing to evolve.

Doug Bassett from Von Bassett was refreshingly honest about his company's branding missteps, particularly their infamous Elvis Presley furniture line from years ago.

While it generated huge attention and tripled their market attendance, it didn't translate to sustainable business because Elvis fans couldn't afford the furniture and people who could afford it didn't want Elvis's name on their pieces.

However, their current partnership with HGTV stars Aaron and Ben Napier has been much more successful because their values align perfectly with Von Bassett's focus on American made craftsmanship, supporting local communities and family values.

This shows how important it is to find partners whose brand values truly match your own.

In corporate news, Leggett and Platt completed the sale of its Aerospace products Group for $285 million to investment partnerships.

This sale was part of the company's restructuring plan announced in 2024 and the proceeds will be used to pay down debt and strengthen their balance sheet.

The aerospace division had 2024 sales of 190 million and operated seven factories across the US UK grants with 700 employees finally, on the retail side, we're seeing some changes as Iowa based Furnish 123 announced they're closing all three of their stores after 17 years in business.

Owners Lee and Tricia White are retiring and running a final sale with 23% off everything.

While it's always sad to see established retailers close, retirements after successful runs are part of the natural business cycle.

There's also ongoing legal news as our R House and RH agreed to extend the deadline for RH to to respond to Our House's lawsuit regarding former executive Lisa Chee.

The case involves allegations of trade secret misappropriation and confidentiality agreement violations, with the response now due in October.

That wraps up today's roundup of furniture industry news.

From strong retail sales to shipping challenges, from tariff enforcement to successful brand partnerships, there's a lot happening in our industry right now.

The key is staying informed and adapting to changes as they come.

Thanks for listening to Furniture Industry News.

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