Furniture orders rose 9%. Factories still aren't hiring for it.

Furniture orders rose 9%. Factories still aren't hiring for it.

Smith Leonard says July orders, shipments, and backlog all rose together, 3 months running. Newer government data on furniture jobs and factory shipments ran cooler.

Today's big number is 9%. That's how much residential furniture orders rose in July from a year earlier, per Smith Leonard's monthly survey of manufacturers and distributors. Shipments and backlog rose too, the 3rd straight month all 3 moved up together and the first run like that since mid-2021. The catch: that's July. Friday's government numbers are fresher and cooler. Also in today’s brief, the owner of Kirkland's is raising cash to restock, IKEA is closing 3 small-format locations, and Ethan Allen's activist went to video. Here's what you need to know.

In today's briefing:

• Orders: residential furniture orders up 9% in July, with shipments and backlog up too

• Jobs: furniture stores and furniture plants both have fewer workers than a year ago

• Factory data: August shipments and orders dipped, and the order backlog is thinner than last year

• Kirkland's / Container Store / Bed Bath & Beyond owner: killed a merger, raised about $45.5M to restock, says no more store buys for now

• IKEA: 3 small-format closings confirmed for Oct 31, Nov 1 and Nov 30

• Ethan Allen: activist posts nominee videos; vote still Nov 4

• Southern Motion: routine filings; final financing hearing still Oct 7

---

Furniture Orders

Orders rose 9% in July. Shipments and backlog came along.

Smith Leonard's September Furniture Insights, which covers July, puts residential furniture new orders up 9% from a year ago and up 5% from June. Shipments rose 8% and backlog rose 12%.

Smith Leonard says the gains are leaning toward middle and upper price points, with the low end lagging, and upholstery is running ahead of case goods. The firm named the September Fed rate hike and slow housing as the risks to watch.

The details:

• New orders: $2,365M in July, vs. $2,170M a year ago; up 5% year to date

• Shipments: $2,276M, up 8%; up 1% year to date

• Backlog: $2,732M, up 12%

What to do with it:

• Bigger factory backlogs can stretch ship dates. Ask your key vendors whether the lead times they quoted still hold.

• If upholstery and the middle and upper price points are carrying the gains, check your floor there before you chase opening price points.

• This is July. Don't build Black Friday open-to-buy on it alone.

  ---

Thanks for the great comments on Sunday’s editorial.

We walked through freight’s new playbook, and if you missed it, here’s the article. It’s a must-read for anyone who ships product by container. Keep an eye out for Part Two next week!

---

Jobs

Orders warmed up this summer. Hiring didn't.

The September jobs report showed 29,000 jobs added and unemployment at 4.2%. July and August were revised down a combined 60,000, so the summer was weaker than first reported.

Furniture and home furnishings stores employed about 385,600 people, about 1.8% fewer than a year ago. Furniture manufacturing employed about 327,400, roughly 10,700 fewer than a year ago, a drop of about 3.2%. Both slipped again from August.

That fits what Smith Leonard heard from its members: payroll dollars up 10%, headcount still down. Factories are spending more on the people they have instead of adding new ones.

What to do with it:

• Thin plant crews plus fuller backlogs add up to delivery risk. Confirm ship dates on fall and holiday orders now, especially upholstery.

• Good salespeople and delivery crews are still hard to replace. Take care of the ones who close.

• Softer national hiring means a more careful shopper into the holidays. Lead with value, in-stock goods and simple financing.

  ---

Factory Data

August factory shipments slipped, and the order cushion is thinner than last year.

Census's full factory report shows August furniture and related products shipments at $7,670M, down 0.2% from July. New orders dipped 0.4%, and unfilled orders were 3.1% below a year ago. Shipments are up 1.8% for the year so far.

Census's category is broader than Smith Leonard's. It includes kitchen cabinets and office furniture, and it's a month newer. So the 2 reports don't have to agree, and right now they don't.

What to do with it:

• Residential orders were up in July. The wider factory picture flattened in August. Plan for steady, not a surge.

• Before you accept a longer lead time, ask your vendor whether their backlog is actually growing.

  ---

Retail

The owner of Kirkland's and The Container Store is restocking, not shopping for deals.

Neighborhood Intelligence (NXH), parent of Bed Bath & Beyond, Overstock, Kirkland's and The Container Store, told the SEC on Monday it ended its planned merger with Fathom Holdings. It's raising about $45.5M by selling stock directly to investors, and says the money goes to merger savings and building inventory. It also cut back its standing share-sale program and said it doesn't plan more acquisitions. The filings included no Q3 sales or earnings.

What to do with it:

• More inventory heading into those stores and sites means more décor, storage and accent furniture chasing the same holiday dollar. If you compete there, set your holiday price points now and watch their promo calendar.

  ---

Stores

IKEA is closing 3 small-format U.S. locations.

IKEA's own store pages confirm the dates. The Annapolis, Md., Plan & Order Point closes Oct 31. San Marcos, Texas, closes Nov 1. The Fairfax, Va., Plan & Order Point closes Nov 30. Other closings have been reported, but IKEA's site doesn't confirm them yet.

What to do with it:

• If you sell near any of these markets, those design-and-order shoppers need a new place to go. Make your design help and local search listings easy to find before the doors close.

  ---

Governance

Ethan Allen's activist took its pitch to video.

DGB, the activist investor running its own board slate at Ethan Allen, filed a video series with the SEC on Oct 1 and Oct 2 featuring its 5 nominees, including Steve Oblak, Wayfair's former chief commercial officer. Ethan Allen hasn't filed anything new since Sep 24. The vote is still Nov 4.

What to do with it:

• The fight is the headline. For the rest of us, watch lead times, design programs and dealer terms after Nov 4.

  ---

Quick Hit

Southern Motion's bankruptcy case stayed routine, with filings since Friday covering committee lawyers and retention orders. The creditors' meeting was set for Oct 5, with no public word yet on how it went. The final financing hearing is still Oct 7, and the Keen-Summit hearing is still Nov 18. If you carry the line, keep asking your rep about open orders and warranty support.

---

Bottom line

Manufacturers' order books were the healthiest this summer since 2021, led by upholstery and the middle and upper price points. The newer read is cooler: August factory shipments and orders dipped, and furniture stores and plants both have fewer workers than a year ago. Use that gap. Confirm ship dates, keep your floor stocked where demand is real, and sell value and certainty to careful shoppers. Watch Kirkland's and The Container Store as they restock for the holidays, go after shoppers near the IKEA closings, and keep Ethan Allen's Nov 4 vote on your radar.

---

*If someone in our industry would get something out of this briefing, please forward it to them. That’s how this reaches the people who actually need it.

---

Powered by beehiiv