HIGH POINT – Going into 2025, the case goods segment’s outlook is bleak.
It is anticipated that the segment would continue to linger in the shadow of its upholstery counterpart, a position it has held for a while. The stagnating home market is more closely linked to case good sales.
There is some good news, though, since interest rates have decreased, raising hopes that the home market will revive. Although it will take some time, business leaders are optimistic.
Looking for improvements
According to Gat Caperton, president of case good expert Gat Creek, “the furniture business is soft, but overall, the economy is good.” “We should rephrase the phrase ‘Survive to 2025’ to ‘Survive to late 2025.'” Although new, remodeled, and transactional housing is beginning to improve following the Fed rate cut, our industry won’t see any benefits for at least another six months.
“Especially in early October, the third quarter proved slower than usual,” he stated. “Normally, I don’t think election years cause a major slowdown in business, but this year was most likely an exception. Our orders were still higher than they were the previous quarter and the year before.
According to Tim Donk, vice president of sales operations and marketing at Legends Home, a provider of upholstery and case goods, the case goods division is still struggling.
“We plan to try to rebuild our import program with case goods for 2025,” he stated. “While it’s not our main focus, I wouldn’t say it’s on the back burner.”
However, Donk talked a lot about upholstery, especially Legends’ new warehouse initiative, which will store all of the company’s upholstery in Phoenix.
“After we get that stuff stocked and moving, upholstery will pick up even more,” he said, predicting that our first containers would arrive at the end of November. “Our container business was already performing well in the category.”
Now that the election is done, he believes that business will generally improve.
He claimed that before to the election, “people just weren’t getting the door swings.” However, I’m optimistic that this will alter. People will feel better about the economy regardless of facts.
Optimism on domestic manufacturing front
Two factors gave domestic producer Vaughan-Bassett hope: a formidable new product and the possibility of tariffs.
“We hope that housing will start to recover as interest rates and mortgage rates decline,” President Doug Bassett stated. “The creation of new bedrooms, which is accomplished through both new and existing home sales, is crucial to the bedroom furniture market in particular. We think that in 2025, after two extremely difficult years, things will improve.
“Our product is the key for us,” he added. “Our new, highly customizable Tide and Timber bedroom collection was a huge hit at the fair. It’s the most adaptable set available. Although our dealers told us they wanted a better pricing, we had a similar solid wood ensemble. They desired veneers with greater flair and variety.
Bassett is optimistic that tariffs will be enacted shortly.
“We were informed at the AHFA meeting and by our government affairs representatives that tariffs are anticipated in every country,” he stated. It goes without saying that those like us who are entirely American-made stand to gain. “Risk-free” is the word I would stress the most. There is danger and uncertainty associated with almost every other bedroom resource. Not us.
Sherrill Furniture, another home manufacturer, concurred on all points. Tariffs have the potential, but business is slow. Customization is another important trend.
Tom Zaliagiris, senior vice president of sales, stated, “We made a statement in our lobby and first couple rooms to show our ability to do customization and really show our breadth with hand finishes and inside/outside combos.” “Custom case goods and upholstery are becoming more and more in demand.
“Everyone bought a lot of safe stock during the pandemic,” he remarked. “However, people want to look better because they are now going into other people’s homes.”
Tariffs are “reinvigorating” the sluggish business climate, according to Zaliagiris.
“I believe they will increase our business,” he stated. “A lot of people are asking us what we can produce, how much we can make, etc. People are curious about our capabilities. It’s possible that retailers are shifting away from imported goods that can surprise them with higher prices.
Strong business despite tariffs
Lifestyle Enterprise, an importer of upholstery and case goods, held a somewhat different opinion. Although business is booming, tariffs will soon be implemented.
“We had a backlog of orders that were challenging to ship due to the availability and cost of containers, so the third quarter was strong for Lifestyle,” stated CEO Michael Hsieh. We were able to start shipping goods from our plants after the market opened up and prices were reduced.
“A strong demand or slowness at retail does not always affect the demand for products with the values that we offer,” he continued. “The interest level at retail is fairly consistent because they are either purchased to generate sales or included in an everyday program business.”
Customers wanted their goods dispatched before the Lunar New Year, so the company placed “a lot” of orders at High Point Market, according to Hsieh.
According to him, “that’s a good indication of a positive feeling about 2025.” The majority of retailers are excited to be putting new products on the floor and are feeling good about the new year.
“The challenge is tariffs,” he stated.
“The potential tariffs are now the obstacle. For China, this is uncertain. Although the majority of our products have been relocated to other nations, the industry as a whole will see some unanticipated effects.
