Report: High-end Furnishing Best Positioned in Tough Macro, Unknown Tariff Terrain
MILAN — U.S.-based furniture firms are gearing up for a serious offensive strategy, amid an uncertain global economy and even more uncertain U.S. tariff policy.
While tariffs could render U.S. manufacturers more competitive as the costs of imported products increase, U.S. manufacturers could lose market share in Canada. Either way, the outcome remains a bit of a mystery, according to five executives hosted by TD Cowen for a virtual panel on the high-end and luxury retail and manufacturing industry.
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At the panel, TD Cowen hosted HomeNewsNow editor in chief Tom Russell, alongside a panel of furniture executives: Phillips Collection chief executive officer Jason Phillips; Vanguard Furniture CEO Andy Bray; Fusion Designs president Marcus Bontrager; Gat Creek CEO Gat Caperton, and Michael Carey, CEO of Stock & Trade and RW Collective.
Panelists offered different suggestions amid a possible trade war sparked by President Donald Trump’s new tariff policies aimed particularly at Canada, Mexico and China.
Playing offense will require collaboration, they concluded in a report revealing the results of the panel and released earlier this week. “Some manufacturers are holding prices as they dissect whether tariffs are temporary, while others are looking to split the burden between manufacturers, retailers, and customers,” TD Cowen said.
In the report, named “High End Demand and Prices Best Positioned in Touch Macro,” panelists were said to have highlighted the importance of strategic inventory planning, making sure they are in-stock on bestsellers and very selectively ushering in newness in better performing categories. Diversifying manufacturing emerged as a key strategy with “Mexico an opportunity for some as benefits from nearshoring outweigh potentially upcoming tariffs.” Some regard offshoring manufacturing as a “Band-Aid” as the White House could impose tariffs on other nations.
The investment bank maintained a “buy” rating for U.S.-based listed companies Arhaus Inc., Williams-Sonoma Inc. and RH (formerly Restoration Hardware). The rating was based in part on the ability of all three of these companies to face macro headwinds. In December, RH raised its guidance for the fourth quarter, despite the macro climate and the “worst housing market in 30 years.” The California-based luxury company, which is expected to release results in late March, forecast growth in demand of 22 percent, up from a previous estimate of 20 percent. Revenue is expected to grow 20 percent versus a previous forecast of 18 percent growth.
Overall, high-end brands are outperforming and remain optimistic for the second half of the year. Sales were soft in January, but rose in February, the report said.
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