Welcome to Furniture Industry News your go to source for the latest updates from the furniture world.

I'm your host and Today is Monday, August 4, 2025.

Let's dive into the stories that matter most to furniture professionals this week, starting with some encouraging news for our industry.

While the broader US Manufacturing sector continues to struggle, furniture is showing some real strength.

The Manufacturing ism report shows that manufacturing overall contracted for the fifth straight month in July, with the index falling to 48%.

But here's the bright spot.

Furniture and related products was one of only seven manufacturing industries to actually report growth last month.

What makes this even more impressive is that furniture was the only sector to see an increase in new export orders.

That's huge for manufacturers looking to expand their reach beyond domestic markets.

We're also seeing solid order backlogs in furniture, which which means production pipelines are staying healthy even while other industries are struggling.

This suggests that demand for furniture products is holding up better than many other manufacturing categories.

Now let's talk about what's happening with raw material costs, because this affects everyone in the supply chain.

Prices are still climbing, but the good news is that the pace has slowed down significantly.

The prices index came in at about 65% in July, down from nearly 70% in June.

Steel, aluminum and imported components are still the biggest cost drivers, and furniture makers are definitely feeling the pinch from tariffs and metal surcharges.

But the fact that fewer companies are reporting rising prices month over month is a positive sign.

Speaking of tariffs, this continues to be a major concern across the retail landscape.

Consumer sentiment data from the University of Michigan shows that about 57% of consumers are still worried about tariffs and their impact on prices and the economy.

While that number is down from two thirds in May, it's still creating uncertainty in purchasing decisions.

What's particularly concerning is that consumers expect unemployment to rise, with 57% anticipating job losses in the coming year.

That's well above the 35% we saw a year ago, and it's something furniture retailers need to keep in mind when planning inventory and marketing strategies.

This economic uncertainty is showing up in consumer behavior, too.

While consumer sentiment did edge up slightly in July, people are still cautious about big purchases.

The Current Conditions index improved, especially among consumers who own stocks, but those without stock holdings actually saw their sentiment decline.

For furniture retailers, this suggests that targeting may need to be more precise based on customer financial profiles.

On the technology front, there's a major shift happening in retail that furniture companies need to pay attention to.

Almost half of all retailers are now using artificial intelligence on a weekly basis, and 97% plan to maintain or increase their AI investments over the next year.

The numbers show that 63% of retailers believe AI will improve customer loyalty, and 65% expect it to boost customer lifetime value.

But here's the only 43% of retailers are actually using AI in customer facing applications like personalization or chatbots.

Even fewer, just 23% are using AI in production for things like customer data analysis.

The biggest barriers are fragmented customer data, high costs and limited technical expertise.

For furniture retailers, this represents both a challenge and an opportunity.

Those who can successfully implement AI tools may gain a significant competitive advantage, especially in areas like personalized recommendations and inventory management.

Now let's look at some major corporate moves that could reshape the industry landscape.

HNI Corporation just announced they're acquiring Steelcase in a massive $2.2 billion deal.

This is HNI's second major acquisition in three years, following their purchase of Kimball International in 2023.

Under the agreement, Steelcase shareholders will get $7.2 in cash plus HNI shares for each Steelcase share they own.

This creates a powerhouse in the commercial furniture space, especially with the trend toward returning to office work.

HNI's CEO Jeffrey Loringer says the combined company will be better positioned to meet evolving workplace needs and enhance dealer relationships.

The deal is expected to close by the end of 2025, pending shareholder and regulatory approvals for dealers and customers.

Both companies say they'll maintain their brand identities and headquarters locations.

Meanwhile, Wayfair is having its best quarter in years.

The online furniture giant reported a B increase in revenue to 3.3 billion for the second quarter, which jumps to 6% when you exclude their exit from the German market.

CEO Neeraj Shah called it their highest growth rate since early 2021.

Even more impressive, their adjusted EBITDA hit 205 million compared to 163 million last year.

What's interesting about Wayfair's success is that they're seeing higher order values up to $328 per order compared to $313 last year, even though their active customer count dropped slightly.

This suggests customers are making larger purchases when they do buy, which could indicate either pent up demand or more considered purchasing decisions.

However, it hasn't been smooth sailing for everyone.

The stock market took a hit on Friday, with furniture related stocks mostly struggling.

The Dow dropped 542 points, largely due to concerns about new tariff policies and a weaker than expected jobs report.

Only five furniture related companies managed positive gains that Berkshire Hathaway Culp, TJ Maxx, Walmart and Williams Sonoma.

The jobs report showed the economy only added 73,000 jobs last month, and previous months were revised down significantly.

President Trump also announced new tariffs on goods from more than 90 countries, set to take effect Aug. 7.

These will include new levies on trans shipments and suspended exemptions that previously helped some importers.

Unfortunately, we're also seeing some casualties in the retail space.

Sleep Fit Corporation, which operated 15 Mattressland stores in California and Nevada, filed for Chapter 7 bankruptcy.

They listed assets of about $903,000 against liabilities of more than $9 million.

Another related entity, Mattress Land of Washington, also filed bankruptcy with five stores in Washington and Idaho.

This follows American Mattress filing for Chapter 11 protection earlier in July, showing that the mattress retail segment is facing particular challenges.

Looking at the bigger picture, what we're seeing is a tale of two industries.

Manufacturing furniture is showing resilience and even growth, while broader manufacturing struggles.

Companies with strong e commerce platforms like Wayfair are thriving and and major consolidations like the HNI Steelcase deal are creating larger, more competitive entities.

But challenges remain.

Significant tariff uncertainty continues to weigh on both consumer confidence and business planning.

Raw material costs, while moderating, are still elevated, and the retail landscape is evolving rapidly.

With AI and technology changes that require investment and expertise, many companies are still developing.

For furniture professionals, the key takeaways are clear focus on operational efficiency to manage cost pressures, invest in technology and AI capabilities to stay competitive, watch consolidation trends carefully as they may create new competitive dynamics and keep a close eye on consumer sentiment and employment trends, as these will drive demand patterns in the months ahead.

The furniture industry continues to show its resilience, but staying informed and adaptable will be crucial for success in this challenging environment.

That's all for today's episode of Furniture Industry News.

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