Sales slow, but it’s not the end of the story – 2024 Universe Report

The rollercoaster ride that home furnishings sales have been on over the past several years—soaring during the pandemic and then leveling off a bit—took a dip in 2024, but observers see another climb toward more favorable conditions as the industry heads into 2025.

According to the Home Accents Today Universe Report, the modest gain registered in 2023, when sales rose by 2.1% year-over-year, turned into a 2.2% loss in 2024 as consumers continued to channel their inflation-weary dollars into travel, entertainment and lifestyle experiences rather than into their homes.

Total sales for the home accents market were $85.06 billion in 2024, with the greatest percentage coming from discount department stores and off-price retailers at $17.31 billion — a decline of 3.7% from 2023’s $17.98 billion.

E-commerce, fueled by giant Amazon, felt the least amount of impact, with home accent sales down just 0.2% and sales actually up slightly in most categories such as wall décor, lamps and lighting and decorative accessories.

Lifestyle stores such as RH, Crate and Barrel and Pottery Barn, and interior designers also weathered the downturn more favorably than did some other sales channels, including craft stores (down 8%), floor covering stores (down 4.3%) and traditional furniture stores (down 3.8%).

Asked about their level of optimism for business through the remainder of this year, just 12.5% of suppliers responding to a Strategic Insights survey said they were extremely optimistic, while an additional 37.5% were somewhat optimistic and the same percentage took a neutral stance.

Tom Zaliagiris, senior vice president-sales at Sherrill, expressed cautious optimism about 2024. “We were unsure of what to expect this year and I think we’ve been pleasantly surprised by how well it stood up,” he said.

While business “definitely softened in the second half,” he attributed that to election uncertainty, noting business typically suffers during an election year but improves shortly thereafter.

Pricing has become a bigger challenge, he said, as costs have risen and, he added, “consumers don’t have the appetite for costs higher than what they’ve paid the past five years.”

Looking ahead to 2025, the vast majority of survey takers — nearly 69% — expect demand for home accents and décor to somewhat increase, while about 6% see an even greater increase and just 25% believe sales will remain flat.

“I think there’s light at the end of the tunnel,” said Jason Phillips, vice president of Phillips Collection. “The industry is ready to take off again. It’s all hinging on getting past this election and seeing interest rates come down.

“Everyone is looking to a very strong January 2025,” said Phillips. “I think it will be an explosive turn.” He said suppliers need to be ready for a wave of business. “Those that are timid will be left behind.”

What companies can do, he said, are to make improvements in technology, websites, messaging and social strategies. “It’s time to strengthen the weak points,” said Phillips.

The poll of suppliers showed a lack of discretionary income among consumers and changes in government policies, such as new tariffs, are concerns for more than half of them. Inflation and retailers going out of business are nearly as concerning, while supply chain issues, which plagued the industry previously; labor shortages and financing and credit options are less of an issue currently.

On a category-specific basis, accent furniture was off by 4% year-over-year, making it the top decliner among the segments tracked. Lamps (down 1%) and lighting fixtures (down 1.1%) fared the best, although no category experienced growth.

Meredith Treybig, director of strategic partnerships at Visual Comfort, said one thing that has helped their growth trajectory, even during COVID, was producing new lighting. “We always want to be innovating, coming out with new designs,” she said.

While the housing market has slowed, the company, she said, “is waiting in the wings for when people starting buying. We are prepared to wait out this soft period.”

Despite slowness at retail, suppliers continued to add new products throughout the year. In the survey, 75% said they added poufs and ottomans to their assortment, while more than 62% also supplemented their existing inventory with more accent chairs, decorative vases and decorative pillows and throws.

Additionally, half said decorative pillows and throws were the fastest-growing category in 2024, outpacing growth in decorative accessories and area rugs, which were cited by 37.5% of respondents. A quarter of suppliers listed poufs and ottomans and wall art as fast growers, while lighting, lamps, mirrors and accent furniture were designated as fastest growing by about 13% of those participating in the survey.

“Customers want new product and we have it,” said Brad Kleinberg, president of lighting firm Crystorama, who said his expectation for 2025 is positive. “Now that interest rates are coming down, we should be set up for a good year.”

One way in which companies added new products with less risk in 2024 was to build on the successes coming out of the High Point’s Spring Market or earlier markets. Bassett Mirror, which did well with its Fynn matte-black arched display cabinet in April, added a light oak version for fall, knowing that the design was continuing to resonate with retailers, explained Dennis Greenwalt, a marketing and designer specialist at Sellutions Group.

Similarly, Mercana expanded on its No. 1 seller, the Sloan curio cabinet, which debuted in black metal with an iron base and is now available in two more colorways. Smaller arched cabinets in all glass or half glass/half wood provide options within that familiar and popular style, explained Cheryl Reardon, director of e-commerce, designer and curated marketplace.

At Arteriors, success with its eggshell boxes from two years ago led to the expansion into furniture like the Forney tiered coffee table, with a lacquered eggshell top.

At Chelsea House, which celebrated its 50^th anniversary at High Point, the company went into its archives to find successful products from the past and reimagine them for today’s market. Leah Fahey, a marketing specialist at Chelsea House, pointed to the Kensington console, which debuted in hand-painted wood 35 years ago and was now relaunched in clear acrylic and two colors of raffia. — Allison Zisko contributed to this report.