Starting in 2020 at the peak of the pandemic and for a couple of years after, housing prices exploded, and home furnishings brands did, too. 

Many Americans spent their time, and their stimulus checks, on home improvement projects and “nesting,” which included redecorating their homes. 

As a result, retailers like Wayfair, Ashley and RH — formerly Restoration Hardware — boomed. 

Now, with the pandemic clearly in the rearview mirror, and partly because of the sweeping tariffs that the Trump administration is implementing, things in the home furnishings and decor sector are coming back down to earth.  

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Some companies were unable to survive the tumult. Three legacy furniture manufacturers and retailers – Mitchell Gold + Bob Williams, Klaussner Home Furnishings, and United Furniture Industries, parent of Lane Home Furnishings – folded in 2023. 

Related: As customers struggle, Target adds affordable glam product line

And this week, Wayfair (W) stock hit a 52-week low and the engineered hardwood floor fell out from beneath RH following its most recent earnings call. 

RH, the luxury home goods brand, saw its stock tumble on news of tariffs. But the CEO is bullish on what’s ahead. 

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RH stock plummeted

RH’s earnings call just happened to crash at about the same time President Donald Trump was announcing planned widespread tariffs. In real-time, the company’s stock dropped by 40%, prompting RH Chief Executive Gary Friedman to audibly curse during the opening of the company’s April 2 call. 

The company’s full-year sales outlook did not meet expectations, and President Trump’s new tariff plans made things much worse: Much of RH’s inventory is made overseas and is therefore subject to some of the steepest proposed tariffs.

President Trump proposed tariffs on several countries where RH goods are made:

• Vietnam: 46%
• China: 34%
• Taiwan: 32%
• India: 26%
• EU: 20%

Still, when asked whether RH planned to raise prices in response to tariffs, Friedman said, “I don’t think we’re going to do anything right now.” 

He added that RH is currently well stocked on furniture. “Welcome to the new world when inventory is your friend,” Friedman said on the call. RH has the benefit of deep inventory already on U.S. soil. “I have $200-300 million in inventory that my competitors don’t. We can navigate this really well,” he said.

The company still plans to refresh its merchandise and roll out an array of new collections in the coming months. 

More on retail and bankruptcy:

• Walmart store closing, auctioning off laptops and flat screen TVs
• Home Depot CEO sounds the alarm on a growing problem
• Famous restaurant files for Chapter 11 bankruptcy

Friedman also believes that the trade escalation could ultimately result in economic benefits for the nation even while tariffs make the housing market worse, at least in the near term.

Related: Wayfair announces a harsh decision amid declining sales

He called President Trump’s demands “all fair demands” that will be “great for America,” but right now “it hurts for everybody.”

RH earnings call was mostly optimistic, despite the stock slide

“We’re at our best in times like these,” continued Friedman. “There’s always another move, and I’m excited about finding the other move before our competitors do,” Friedman said. 

“We don’t need to raise capital and we have real estate assets we can turn into cash,” he said, “but we are not in ‘fire sale’ mode.”

Despite today’s stock cratering, RH plans to expand in 2025, including opening two outdoor galleries, two concept galleries and seven new design galleries. New locations include:

• Oklahoma City, The Gallery at the Oak
• Montreal, The Gallery at Royalmount
• Paris, The Gallery on the Champs-Élysées, Paris, France
• Detroit, The Gallery in Birmingham
• Manhasset, New York, The Gallery at the Americana
• San Diego, The Gallery at University Town Center
• Palm Desert, The Gallery on El Paseo

In 2026 the company plans to expand further into Europe, in London and Italy, Friedman said.

“You can see who’s really good in times like these,” said Friedman. “I don’t think [tariffs are] going to bring the whole economy down. There may be pain for the next 12-24 months, but the second half of this administration could bring a booming American economy.” 

So who wants to grab some popcorn, cozy up on that down-filled sofa, and watch to see what happens next? 

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