Retail Growth, Supply Chain Strain, and Arhaus' Showroom Expansion

Originally published September 16, 2024. This version was rebuilt from the CNBC/NRF Retail Monitor, the ILA's strike announcement, the University of Michigan survey and Arhaus' second-quarter release for the FIN archive, and the facts are as of that date.

In mid-September 2024 overall retail was growing, furniture stores were not, and a port strike was two weeks away. One luxury furniture retailer was still opening showrooms.

The short version

• NRF's Retail Monitor showed total retail sales up 0.45% in August, but furniture stores were down.
• ILA delegates backed a coastwide strike on October 1 if no deal was reached.
• Arhaus said it had opened 8 new Showrooms in 6 states in 2024 and reached its 100th showroom.

Retail sales growth. A mixed bag

The CNBC/NRF Retail Monitor showed total retail sales up 0.45% month over month in August, seasonally adjusted. Furniture and home furnishings stores were down 0.17% from July and 2.57% from a year earlier.

The University of Michigan's preliminary September sentiment rose to 69.0 from 67.9, its highest since May, led by better buying conditions for durables as consumers saw more favorable prices.

Cargo concerns

On September 5 nearly 300 ILA wage scale delegates unanimously supported a call for a coastwide strike at ports from Maine to Texas on October 1 if no new agreement with USMX was reached. The contract was set to expire September 30.

Furniture importers that rely on East and Gulf Coast ports had a few weeks to bring cargo in early or shift routes to reduce exposure.

Arhaus expands

Arhaus reported second-quarter net revenue of $310 million, with comparable growth of negative 7.1%, net income of $22 million and adjusted EBITDA of $40 million.

The company said it had opened 8 new Showrooms in 6 states so far in 2024, was on pace for nine to eleven openings for the year, and had opened its 100th showroom. New showrooms were performing well even as comparable sales fell.

Looking ahead

Shoppers were spending more overall but not on furniture yet, and a port strike loomed. Retailers with strong brands were still betting on physical showrooms for the long run.

Related on FIN

• Furniture Store Sales Fell 2.7%. Every Other Category Grew.
• The Freight Mafia's New Playbook

Sources

• National Retail Federation, CNBC/NRF Retail Monitor, August 2024
• University of Michigan, Surveys of Consumers, preliminary September 2024
• International Longshoremen's Association, Wage scale delegates back call for October 1 strike (Sept. 5, 2024)
• Arhaus, Inc., Second quarter 2024 results (Aug. 8, 2024)