FIN Desk
Furniture Sales Rose. Costs Are Rising Faster.
Furniture stores sold more in September while shelf prices fell, but the cost of making and moving furniture is climbing fast. Plus: what a calendar quirk did to the sales number.
Today's big number is 1.3%. That's how much U.S. producer prices rose in September, the biggest one-month jump since March 2022, per BLS. Furniture stores sold more and shelf prices fell, but the cost of making and moving furniture is climbing fast. That squeeze is today's story. Here's what you need to know.
In today's briefing:
Margins: costs are rising fast while furniture shelf prices fall
Store sales: up 4.9% from a year ago in September, with help from a Labor Day calendar shift
Housing: fewer people are applying for mortgages to buy homes
Freight: West Coast container rates ticked up, with no relief in sight
Quick hits: Ethan Allen's Nov 4 vote and Southern Motion's hearing Tuesday
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The Margin Squeeze
Furniture costs are rising while shelf prices fall.
Wholesale prices jumped in September. BLS says its producer price index for final demand rose 1.3% for the month, the biggest increase since March 2022. Fuel led the way, with gasoline up about 20%. Diesel bought by businesses rose about 21%, and trucking freight prices rose too.
Furniture is caught in the middle. Producer prices for household furniture are about 5.5% higher than a year ago, by our math from BLS index data. But shoppers are paying less at the store. BLS says consumer prices for furniture and bedding fell 2.4% from a year ago.
Manufacturers are feeling it. Man Wah, a major recliner maker and the parent of Southern Motion, told the Hong Kong stock exchange on Oct 13 that it expects first-half profit to fall about 70% to 90%. The figures are preliminary and unaudited. Man Wah blamed surging raw-material costs, price increases that lag behind those costs, a money-losing U.S. business, and write-downs tied to Southern Motion's Chapter 11.
Why it matters:
Expect fuel surcharges on deliveries and inbound loads. Check what your carriers and delivery partners are charging now.
Expect price increase requests from vendors, especially in upholstery and motion. Ask what's coming before you set spring prices.
Protect your margin. Review your delivery fees and free-delivery thresholds, and don't quietly absorb every increase.
Store Sales
Furniture stores sold more in September, with help from the calendar.
Census's advance report puts September sales at furniture and home furnishings stores up 4.9% from a year ago and up 1.3% from August. With shelf prices falling, the gain came from more pieces sold, not higher prices.
The calendar helped, too. Labor Day fell on Sep 1 last year, so most of that holiday weekend's sales landed in August 2025. This year Labor Day was Sep 7, so the whole weekend counted in September. That makes the September gain look bigger than demand alone would, and it helps explain why August looked weak.
The year to date is still down 1.5%. Friday's issue reported NRF's Retail Monitor at down 2.7% for September. NRF tracks card spending and Census surveys stores, so the two can differ without either one being wrong.
Why it matters:
Don't rebuild Q4 plans on one month. Part of the gain is the calendar, and the year is still behind.
More pieces at lower prices means more work for the same dollars. Watch units and margin, not just sales.
Housing
Fewer people are applying for mortgages to buy homes.
MBA's weekly survey, released Oct 14, shows purchase applications down 16% from a year ago, while Freddie Mac's 30-year rate held at 7.40%.
Why it matters:
Fewer purchase loans now means fewer move-in tickets this winter. Work the customers already in their homes.
Freight
West Coast container rates ticked up, with no relief in sight.
Drewry put Shanghai to Los Angeles at $7,884 per 40-foot container on Oct 15, up 3% from the week before. Add higher diesel prices, and getting furniture from the port to your floor is getting more expensive, not less.
Why it matters:
Check whether your Q4 and early 2027 bookings are priced at today's rates, and ask how fuel surcharges are calculated.
Quick Hits
Ethan Allen: The proxy fight with activist investor DGB heads to a Nov 4 vote. In an Oct 12 SEC filing, Ethan Allen said DGB lacks an "executable financial plan" and repeated its commitment to name a new CEO by June 30, 2027. In its own Oct 13 SEC filing, DGB proposed an interim CEO and a 100-day plan.
Southern Motion: The final financing hearing in the recliner maker's Chapter 11 case is Tuesday, Oct 20. No sale motion had been filed as of Monday. If you carry the line, keep confirming open orders and warranty support with your rep.
Bottom line
Furniture stores are selling more, but part of September's gain is the calendar, and shoppers are paying less per piece. At the same time, fuel, freight and factory costs are climbing, and a major recliner maker just warned its profit will fall sharply. Expect surcharges and price increase requests in the weeks ahead. Lead with value, check every fee and surcharge, and talk to your vendors before the squeeze sets your margin for you.
If someone in our industry would get something out of this briefing, please forward it to them.
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