Cindy Krebsbach used to like to browse for home furnishings at stores, including HomeGoods and Stein Mart, and would often roam through garden centers, looking for plants to brighten her home in Boca Raton, Fla.
"I stopped looking so I am not even tempted to purchase," Krebsbach says. "With our savings down with the stock market, and the price of food, gas and products that are a necessity going up, I've curbed all spending on things I don't absolutely have to have — especially for the house."
To the list of casualties from the housing recession — sinking home prices, waves of foreclosures, weak consumer spending, battered home builders — add another one: struggling home improvement and home furnishing stores.
Retail stores of all kinds have been hurt by the crisis in the mortgage and real estate industries. But the crisis has proven especially painful to stores that specialize in home merchandise. With fewer people buying homes, fewer people need new furniture or furnishings.
Even many homeowners who aren't moving are feeling so financially squeezed that they see redecorating as a luxury they can't afford right now.
People who face soaring gas and food prices still need to buy clothes. But they might not feel compelled to splurge for, say, a new sofa if they haven't already busted through the seat of the old one.
"The home business stinks right now," says retail strategist John Champion of consulting firm Kurt Salmon Associates. "The housing market softness and consumer confidence being almost half what it was a year ago is a one-two punch for home retailers. It's having a big impact across the board — in home departments, furniture stores and at Lowe's and Home Depot."
Last year, 15 U.S. furniture store chains went out of business, up from 10 closings in 2006 and five in 2005, according to the trade publication Furniture/Today. Two of the 100 largest chains — Wickes and Domain — have closed their doors this year.
"The list of the dead is getting longer and longer," says Ray Allegrezza, Furniture/Today's editor in chief. "And it's not like the stores that competed against them are now fat and happy. The business has not rebounded."
The sales decline for the home furniture industry is the worst since the 1982 recession, says Jerry Epperson, a Richmond, Va.-based investment banker who follows the industry. Hardest hit, Epperson says, are stores catering to the lower end of the market, including Ashley Furniture and Rooms to Go, and those based in economically vulnerable states such as Florida, Michigan and Ohio.
"They are finding business very difficult and going aggressively after customers with promotions we haven't seen historically," says Epperson of Mann Armistead & Epperson.
What that means, Allegrezza says, is that the deals available now on furniture are among the best that consumers have ever seen on a wide scale. It's not just price cutting that's made this a timely moment to buy furniture. In addition, overseas factories have warned that their prices are rising by up to 8%, which will likely be felt by U.S. shoppers in coming months.
Still, Epperson says, many shoppers seem to feel there's "no urgency to the purchase" when it comes to furniture. He warns that prices on leather and wood furniture could rise by up to 20% by the end of the year, thanks to the weakening dollar, the growing cost of raw materials, reduced export incentives and other factors.