Welcome to Furniture Industry News.

I'm here with your industry Update for Friday, June 20, 2025.

Today we're covering some important trends that are shaping our industry, from housing market challenges to retail expansion and global trade concerns.

Let's start with what's happening in the housing market, because as we all know, new home construction drives a lot of furniture sales.

The news isn't great right now.

Homebuilder confidence dropped again this month to a reading of 32 on the NAHB Housing Market Index.

That's one of the lowest levels we've seen since 2012, with only two lower readings in the past 13 years.

What's driving this decline?

Mortgage rates are staying high, and there's a lot of economic uncertainty out there.

Buyers are moving to the sidelines, which means builders are having to work harder to make sales.

In fact, 62% of builders are now using price incentives, and 37% actually cut prices in June.

That's the highest percentage since they started tracking this data in 2022.

This connects directly to the construction numbers we're seeing.

May housing data shows permits were down 1% compared to last year, and housing starts dropped 4.6%.

The bright spot was housing completions, which were up 5.4% from April, but still down 2.2% from May 2024.

For our industry, this means fewer people moving into new homes over the next several months, which typically translates to slower furniture sales during what's already a challenging summer period.

Speaking of challenging periods, let's talk about what's happening in the mattress market.

The first quarter numbers just came out, and they're not encouraging.

The total mattress market was down 5.7% in dollars and 11.2% in units compared to the same period last year.

We're looking at $2.4 billion in total sales versus $2.5 billion last year.

The decline hit both domestic and imported mattresses.

US produced mattress sales dropped 4.4% to about $2 billion, while while units fell 8.1%, import sales were hit even harder, tumbling 23.7% in dollars and falling 18.6% in units.

The good news, if you can call it that, is that average prices for domestic mattresses went up 4% to $452.63, suggesting manufacturers are managing to maintain some pricing power even in a tough market.

The International Sleep Products association points to slowing economic growth, policy uncertainty, and stubborn inflation as the main factors behind these declines.

These are the same issues affecting the broader furniture industry.

So this data gives us a window into what other categories might be experiencing now.

Let's shift gears and talk about what's happening internationally.

Italian furniture manufacturers are getting increasingly worried about trade policies, specifically President Trump's tariff plans.

A new survey from Federlegno Arieto shows that nearly half of the 400 companies surveyed in expect a 5% drop in turnover due to escalating trade tensions.

Another 26% expect losses up to 10%, and 25% fear the impact could be even worse.

What's really concerning industry leaders there is the uncertainty.

As Claudio Feltran, the federation president, put it, many companies are in a state of confusion and total uncertainty that has them frozen while they wait to see what happens.

This uncertainty is affecting strategic planning and decisions about entering new markets.

Despite these worries, the Italian furniture sector posted over 2.2 billion euros in turnover for the first quarter, down just 0.7% from last year.

So while the immediate impact has been modest, the fear of what's coming is clearly affecting business confidence.

For US Furniture professionals, this matters because Italy is a major supplier of high end furniture and components.

Now let's talk about some expansion happening in retail.

Perigold, which is Wayfair's luxury brand, just opened its first brick and mortar store in Houston.

This 20,000 square foot space in Highland Village features over 150 home brands and represents a significant move for the online focused company.

What makes this interesting is Perigold's approach.

They're offering a mix of cash and carry items for immediate purchase, plus larger furniture pieces that can be delivered locally within a week.

They've also got design services, dedicated meeting rooms for trade customers and even a patio for community events.

Rebecca Ginns, Paragould's global head, says they chose Houston because it's a large, growing market where they already have a strong customer base.

The physical store is meant to reach new audiences.

Apparently half the customers at Wayfair's other retail locations are new to the brand.

They're planning a second location in West Palm beach for this fall, which will be even larger.

At nearly 30,000 square feet, this retail expansion trend is worth watching because it shows how online first companies are recognizing the value of physical spaces, especially for higher end merchandise where customers want to see and touch products before buying.

Another expansion story worth noting is happening in Virginia, where Schewell's Home just acquired Butterworth's furniture in Petersburg.

This is significant because Butterworth's has been in business since 1927, nearly 100 years.

It's also the largest acquisition in Schewell's 127 year history.

The deal brings a 72,000 square foot showroom and 24,000 square foot warehouse into the Schewell's network, making it one of their largest locations.

They're keeping the Butterworth's name for now to honor the brand's local reputation and ensure a smooth transition for the 25 employees who are joining the company.

Matt Schewell, director of store operations, called this an opportunity to expand into a new market while preserving a strong local reputation.

It's a good example of how regional players are growing through strategic acquisitions, especially when they can find established businesses with loyal customer bases.

What ties all these stories together is the theme of adaptation and uncertainty.

Whether it's builders cutting prices to attract hesitant buyers, mattress companies dealing with declining sales, Italian manufacturers worried about tariffs, or retailers expanding their physical presence, everyone in our industry is navigating challenging conditions and trying to position themselves for whatever comes next.

The housing market weakness is particularly concerning because it affects so much of what we do.

When fewer people are moving into new homes, it creates a ripple effect throughout the furniture supply chain.

Combined with the broader economic uncertainty that's affecting consumer spending, it's creating a challenging environment for everyone from manufacturers to retailers.

At the same time, we're seeing companies make strategic moves to adapt.

The Perry Gold expansion shows confidence in the luxury market, even as overall conditions are tough.

The Schewells acquisition demonstrates that there are still growth opportunities for companies with the right strategy and resources.

For furniture industry professionals, the key takeaway is that flexibility and strategic thinking are more important than ever.

Whether you're dealing with supply chain concerns related to potential tariffs, adjusting inventory levels based on housing trends, or thinking about how to reach customers in both digital and physical spaces, staying informed and adaptable is crucial.

That wraps up today's episode of Furniture Industry News.

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We'll be back with more news and analysis to help you navigate the evolving furniture business landscape.