Furniture Retail Forecast. Weak September Sales, Cautious Consumers, and Big Lots' Restructuring

Originally published October 14, 2024. This version was rebuilt from the CNBC/NRF Retail Monitor, the University of Michigan survey and Big Lots' Chapter 11 release for the FIN archive, and the facts are as of that date.

Mid-October 2024 brought an early look at September spending, a slightly softer consumer mood and a major discount home goods chain working through bankruptcy.

The short version

• NRF's Retail Monitor showed furniture and home furnishings stores down 1.5% in September.
• The University of Michigan's preliminary October sentiment index was 68.9, down from 70.1.
• Big Lots had agreed to sell substantially all its assets to a Nexus Capital affiliate in Chapter 11.

Retail sales trends. A mixed bag in September

The CNBC/NRF Retail Monitor showed total retail sales down 0.32% month over month in September, seasonally adjusted, but up 0.55% from a year earlier.

Furniture and home furnishings stores were down 1.5% month over month and down 4.8% year over year, one of the weaker categories along with building and garden supply and sporting goods stores.

The monitor is based on card transaction data, so it gave retailers an early read before the Census report later in the week.

Consumers stay cautious

The University of Michigan said sentiment inched down 1.2 index points to 68.9 in early October, within the margin of error, after two months of gains. It was still about 8% stronger than a year earlier.

The survey said consumers continued to express frustration over high prices even as inflation expectations eased. Its index of buying conditions for durables was 83, little changed from 82 in September.

Big Lots restructuring

In September Big Lots said an affiliate of Nexus Capital Management had agreed to acquire substantially all of its assets and that it had filed for Chapter 11 in Delaware. It secured commitments for $707.5 million of financing and said it would optimize its store footprint.

Big Lots was a large seller of value furniture and mattresses, so closing stores and liquidation sales would add discounted goods to the market in the fall.

Update. The court approved the Nexus sale in November, but in December Big Lots said it no longer expected it to close, and Gordon Brothers completed a purchase in January 2025.

Industry challenges

September was a soft month for furniture stores, consumers were still price sensitive and a big discount competitor was restructuring. Retailers headed into the holidays planning for modest demand.

Related on FIN

• Furniture Store Sales Fell 2.7%. Every Other Category Grew.
• Every Door in Town

Sources

• National Retail Federation, CNBC/NRF Retail Monitor, September 2024
• University of Michigan, Surveys of Consumers, preliminary October 2024
• Big Lots, Inc., Sale agreement with Nexus Capital Management (Sept. 9, 2024)
• Big Lots, Inc., Big Lots receives court approval for sale to Nexus (Nov. 22, 2024)
• Big Lots, Inc., Update on court-supervised process (Dec. 19, 2024)
• Gordon Brothers, Completes Big Lots purchase (Jan. 2025)