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WTR Furniture/Furnishings 2H24 Industry Outlook

Equity analysts spend most of their time trying to get a handle on what is going to happen over the next 12-24 months for the companies that they follow. Much of the focus is on ‘the numbers’. But sometimes it’s useful to pause and take some time to think about the big picture factors that could affect the industries and companies we care about. In this industry report, we talk about five of the current themes and one trend we have been thinking about, with an eye on how they may affect the furniture and furnishings industries (both residential and contract/commercial) going forward. Some of these factors, like conditions in the housing market, are more immediately pressing, while others, like the impact of Generative AI on employment, are far more speculative. These aren’t even really predictions as much as they are open questions about some of the factors that we think may be important as investors look to understand how the furniture and furnishings industries may evolve in the coming years and what this might mean for the companies in this space. As always, we welcome your feedback and thoughts. The ‘shape’ of office work remains in flux post-COVID. Don Draper, from AMC’s Mad Men television series, worked in a curtain-wall tower in Midtown Manhattan, where executives spent their days in corner offices, junior employees shared smaller, more cramped offices with multiple desks, and secretaries, tasked with handling the office technology, occupied the office commons. Initech, the fictional technology company in 1999’s Office Space, was partitioned into rows of windowless beige cubicles in a mid-rise building situated in a suburban office park. Robert De Niro’s character in 2015’s The Intern finds a new job in an open office where he sits shoulder-to-shoulder with his Millennial co-workers. These archetypes defined the evolution of the corporate office over the past seven decades, with each iteration outfitted with its own definitive (and often iconic) types of office furniture.