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Furniture/Furnishings Weekly

Rotation into smaller-cap and value stocks continues. The Water Tower Research Commercial/Contract Index (+1.2%) and Residential Manufacturers & Suppliers Index (+2.4%) benefited, while the Home Goods Retailers Index (-2.1%) was weighed down, in part, by bankruptcy concerns for CONN. The Mass Retailers Index (-2.4%) was affected by weakness in growth stocks, giant caps, and technology components of the market. The Russell 2000 (-0.1%) outperformed the S&P 500 and Dow 30, both (-2.2%). Per Furniture Today, in a 31-page filing, TPX argued the FTC fails to understand the mattress industry/take into account likely post-merger conditions in its response to the agency’s merger complaint. TPX argues (1) the FTC’s definition of ‘premium’ segment is vague and ill-defined, (2) the FTC fails to take into account the breadth of distribution channels available to rivals and TPX’s commitments to ensure distribution for rivals post-acquisition, and (3) that the firm’s strategies and behavior pre-acquisition are not a good guide to post-acquisition strategy and behavior (congruent with the theory of Strategy-Conduct-Performance, which argues firm or industry structure influences how firms act in markets and how this affects results). Where TPX’s arguments focus on actual competitive dynamics in an evolving industry, the FTC’s arguments arguably rely on more abstract neo-Brandeisian notions (1, 2) of latent corporate power as an in-principle threat to consumer welfare. Ashley Furniture to expand mattress production in Mississippi. The continued transformation of the industry, as traditional barriers to entry decline as foam mattresses take share from traditional coil mattresses, is opening up opportunities for new players and disrupting industry structure, more generally. While the FTC’s complaint against TPX takes a static, partial equilibrium approach to industry analysis, a more expansive view of industry dynamics suggests the industry remains competitive, with firms continuing to invest and industry structure in flux. Noisy office environments negatively affect knowledge worker performance in cognitively demanding tasks. Experimental evidence demonstrates software engineers perform less well in noisy office environments than in quiet offices. The study’s authors suggest cost savings with open offices potentially offset by lower productivity. Per The Census Advance Monthly Retail Sales release, Furniture & Furnishings (NAICs 442) sales are down 7% YTD through June as demand remains challenged. CONN’s closing stores as bankruptcy filing speculation circulates. Weak demand likely plays a role here for the retailer, which acquired Badcock’s 380 stores in December 2023. Some closures for underperforming locations seem normal, however. HNI reports 2Q24 results on Thursday, July 25, giving us additional insight into the state of the office and residential furnishings industries.