Welcome to Furniture Industry News for Wednesday, July 2, 2025.

I'm here to bring you the latest updates that matter to furniture professionals across the country.

We've got some major developments in trade policy, consumer behavior and industry changes that you need to know about.

Let's start with breaking trade news that's going to impact your bottom line.

President Trump announced a new trade deal with Vietnam just today.

Under this agreement, Vietnamese goods coming into the US will face a 20% tariff with an even steeper 40% tariff on transshipped items.

That's products that get routed through Vietnam from other countries to avoid higher tariffs elsewhere.

In exchange, Vietnam is removing all tariffs on American goods and giving US Companies total access to their markets.

Now, this is actually better news than what we were looking at before.

The original tariff rates that Trump rolled out in April would have hit Vietnamese goods with a 46% levy.

So 20% is a significant reduction from that worst case scenario.

But here's what we don't know yet.

Whether this 20% rate replaces the current 10% tariff on all foreign imports or if it stacks on top of it.

The administration hasn't spelled that out.

And with their self imposed July 9 deadline for trade deals fast approaching, furniture companies are still dealing with a lot of uncertainty.

Speaking of uncertainty, new polling data shows just how hard tariffs are hitting small and medium businesses in our industry.

An alignable survey of over 4,000 small business owners found that 44% reported business slumps in June.

That's a huge jump from the 25% who saw drops in April.

Among home furnishings companies specifically, 72% said they've already seen declining sales because of tariffs, and 67% expect things to get worse if the trade situation doesn't improve.

The numbers are pretty sobering.

The average business decline was 13%, but one in five companies saw losses of 25% or higher.

What's really concerning is that one in five small business owners fear their business won't make it to 2026 if the current tariff strategy continues.

As one industry expert put it, using tariffs as a negotiating tactic might seem aggressive, but the collateral damage to small businesses is very real.

This uncertainty is changing how consumers shop too, and the effects are rippling through to furniture sales.

New research from Alex Partners shows that online furniture and home furnishings purchases dropped dramatically from 28% of consumers buying online in 2024 down to just 18% in 2025.

That's a double digit decline that's hitting our industry harder than most others.

The study found that about 1/3 of consumers are delaying purchases until there's more certainty about tariffs.

While 28% made earlier purchases to get ahead of potential price increases, about 22% have reduced or delayed online purchases that ship directly from overseas, and 20% are consciously trying to buy American made goods because of tariff concerns.

It's clear that elevated consumer awareness of tariffs is flowing through into real buying decisions.

But it's not just tariffs affecting consumer behavior.

A broader economic survey shows that consumer sentiment declined by 30% through April 2025.

Six out of 10 people say they're more worried about rising prices than they were six months ago.

Nearly 30% are shopping more at discount stores and and over 25% are visiting specialty retailers less often due to financial constraints.

Interestingly, though, consumers haven't completely pulled back on discretionary spending.

While 80% have reduced dining out and 69% have cut travel, they're still prioritizing certain indulgences.

The key seems to be that shoppers have adapted to new behaviors after years of inflation concerns, they're cutting back strategically while still splurging thoughtfully on things that matter most to them.

Now, while we're talking about changing consumer habits, there's also a generational shift happening in how people discover and shop for furniture online.

Nearly half of consumers have used generative AI tools to search for products and gift ideas, with 89% finding it helpful.

But there's a big age gap here.

70% of Gen Z has used AI for product searches, compared to much lower adoption rates among older generations.

This matters for furniture retailers because younger consumers are increasingly comfortable with AI powered recommendations and personalized shopping experiences.

They're also more willing to click on AI generated suggestions.

35% of millennials and 31% of Gen Z are very likely to click on AI recommendations, compared to just 6% of baby boomers.

As AI tools become more common in retail, understanding these generational preferences could be crucial for reaching different customer segments.

Shifting to industry News We've got some significant business changes to report.

Kith Furniture, based in Alabama, has suspended operations, effective immediately.

The company, which specialized in bedroom and occasional furniture sold through regional dealers across the southeast, launched in 20182011 and was known for collections in finishes like driftwood, oak and aged white.

The closure affects their network of sales reps and dealers, particularly in Alabama, North Carolina, South Carolina and Texas markets.

On a more positive note, there's expansion happening in the mattress sector.

Two entrepreneurs have acquired nine Beds Express stores in Alabama and Georgia and plan to convert them to Snooze mattress locations.

This brings the total snooze network to 30 stores across nine states, with plans to reach 50 locations by year end.

The acquisition shows that even in challenging times, there are still growth opportunities for companies with the right strategy and financing.

The Snooze expansion is particularly interesting because it demonstrates how franchise models can help accelerate growth in the sleep products category.

With consumers continuing to prioritize health and wellness, including better sleep mattress, retailers who can scale efficiently may find opportunities even in a tough economic environment.

Looking at all these developments together, the furniture industry is clearly navigating some choppy waters.

Trade uncertainty, changing consumer behaviors and economic pressures are creating challenges, but they're also creating opportunities for companies that can adapt quickly.

Whether it's adjusting, sourcing strategies to deal with tariffs, embracing new technologies like AI to reach younger consumers, or finding ways to grow through acquisitions, the companies that thrive will be those that stay nimble and responsive to change.

That wraps up today's furniture industry news.

These are the stories shaping our industry right now, and we'll continue following these developments as they unfold.

If this information helps you stay on top of what's happening in furniture, please subscribe to the podcast so you don't miss any updates.

Thanks for listening and we'll see you next time.