It’s not exactly a secret that the home products business has been—to put it not-so-politely—sucking wind the past few years. The business exploded during the pandemic when Americans spent all their time, and most of their money, at home. Business was booming for retailers across the entire home furnishings spectrum, most notably in furniture.
But in the classic definition of a zero-sum game, all those sales came at the expense of what came next. Freed from home confinement, consumers burst out to travel, eat at restaurants, and see Taylor Swift and Bruce Springsteen regardless of what the tickets cost. Nobody really needed to buy another sofa or refrigerator only a year or three after their last purchase.
What’s the latest trend in furniture stores? And the answer is: They are adding new merchandise categories and services to pick up the slack.
Home Alone
A revival of the housing market, driven by lower mortgage rates, was supposed to be the answer for the sector, and it would have been except for one little detail. Mortgage rates remained stubbornly high, and the entire housing market teetered on modern-day historic lows. It hasn’t been pretty.
Like waiting for Godot, the return of the market seems elusive. Some retailers are adopting new strategies that push them further from their comfort zones (literally and figuratively) into adjacent product categories (appliances, electronics, and housewares), and even beyond products into services. It’s too early, not to mention too episodic, to judge the success of these alternative strategies. But with a large number of old-school furniture retailers closing—at least 17 local operations in the first quarter alone, as Furniture Today reports—the idea of doing nothing has become less and less appealing.
As a side note, offering services outside of core products is not rocket science. Costco has made good money on its ecosystem of over 15 dedicated member services. These benefits are divided into categories including health, home, business, and finance. Crate & Barrel, The Container Store, Pottery Barn/West Elm/Williams-Sonoma, Design Within Reach, and Ethan Allen have offered design services for years as logical extensions of their product mix. The key is knowing what your customers want, being a trusted source of service, and guaranteeing consistent execution. That said, for furniture chains to expand beyond basic furniture sales and rebranding themselves is something new.
City Furniture Becomes City Home
The regional Florida chain City Furniture is a great example of rebranding with expanded services. It just announced that it is converting its entire fleet of about 25 stores to the City Home banner. While the store has sold more than just furniture for years—its assortment includes home textiles, housewares and other home categories—the rebranding confirms that it wants shoppers to think of it in new terms. “Our customers are looking for more than furniture,” said Andrew Koenig, CEO of the privately owned chain, in a statement. “They want an easier, more inspiring way to create a home. That’s why we’ve brought together more of the categories and services customers need, from the kitchen to the closet to the living room, under one roof.”
It should be noted that when Koenig talks about “services,” it’s not quite the way Costco defines it. City’s services basically fall under moving services and the interior design headings. The same goes for some of the other stores mentioned here. The one exception, noted below, is what Bed Bath & Beyond is attempting to pull off.
City is far from the first furniture-centric chain to move in this direction. Nebraska Furniture Mart, the Berkshire Hathaway-owned giant with stores in Texas and its namesake state, has sold everything from consumer electronics and major appliances to home décor for years. It’s one of the reasons it is gradually moving to NFM branding for its stores and website.
Other Berkshire furniture operations, including RC Willey in Utah and Starr in Texas also have expanded beyond their core furniture classifications. And Ashley, the largest furniture retailer with vertical manufacturing resources, has also expanded into categories including consumer electronics in its newest locations.
Ikea Is More Than Just Funny-Named Bookcases
While most shoppers, especially younger ones who may still be outfitting their dorm rooms, tend to think of Ikea for storage units and lamps, the fact is that the giant Swedish chain has been busy developing its business in the kitchen and bathroom cabinet sectors. In a plan already in place in Europe, it is opening dedicated retail locations for these categories where consumers can plan their kitchen and bath layouts and arrange for installation. These services are also generally available in the full-line 500,000 square foot-plus stores. Ikea is generally regarded as the second-largest furniture retailer in the country, after Ashley, but with these new offerings its competition is becoming as much a Home Depot and Lowe’s as it is a conventional furniture dealer.
Bed Bath & Way Beyond
Perhaps the most radical approach is coming from the resurrected one-time home stalwart brand Bed Bath & Beyond. Now owned by what was Overstock.com, the retailer has recently acquired two adjacent retail brands: Kirkland, for home décor, and The Container Store, for home storage. While its business was never primarily furniture, BBB is going even further afield with its pending deal to buy Lumber Liquidators and Cabinets to Go. And it appears its plan is not just to sell goods. Under its impresario leader, TV retail guru Marcus Lemonis, it will soon offer real estate services, financial tools, and even home repair and moving services. It is an extremely ambitious plan (possibly imitating the Costco model) that may or may not work considering all the moving parts, but it clearly is the latest proof that just selling credenzas and recliners doesn’t cut it anymore.
What’s Next?
The furniture business will come back sooner or later. People always need new things for their homes, either their current ones or the places they are moving into. This is not a business that’s going to be replaced by drones or AI. You can’t sit on Claude or sleep on Grok. But in the meantime, a number of furniture retailers are trying to stay one step ahead of things. Is there life beyond furniture? We’re about to find out.
