How companies like Havenly and RH are strategizing against tariffs in a slow housing market

“We track our leads, and in April, they fell off the cliff, and it just kind of hasn’t recovered,” Mayer said. “Home furnishings tend to be an investment item. It’s an easy expense to press pause on if you’re feeling a little less well off than you used to, and as prices rise.”

Increased tariffs are coming at a time when furniture companies have already been struggling due to a challenged housing market. Existing home sales dropped by 5.9% in March, according to the National Association of Realtors, and the median sale price of $403,700 marked the 21st consecutive month of price increases. As RH CEO Gary Friedman said on the company’s earnings in early April, “We’ve been operating in the worst housing market in almost 50 years.”

This means even companies that have already diversified their supply chains may see demand drop off. To help protect themselves and conserve capital, some furniture companies like Havenly are further shifting their supply chain locations. They’re also considering how to navigate pricing decisions, like whether to increase prices or lean into promotions.

At RH as of April 4, overall demand was up 17% quarter-to-date, and RH Brand’s demand was up 20% quarter-to-date. But Friedman said the company is still delaying some new outdoor product launches that were planned for spring until the fall “due to the rapidly changing economic outlook.” Still, he said the company, which did over $3 billion in revenue 2024, plans to grow its size and scope. It projected revenue growth of 10-13% for 2025, is planning several new galleries this year and is expanding its domestic manufacturing footprint.

“We believe the important investments we are making during this depressed housing cycle are creating the level of strategic separation in our industry that rivals the most important brands in the world,” Friedman said.

Havenly’s Mayer said that dropping consumer demand complicates buying, purchasing and investment decisions. “The consumer demand impact is even more frighting than some of the things around supply chain and tariffs,” she said.

In turn, her company is looking for areas where it can de-risk. Since Election Day, Mayer said, the company has been able to diversify its sourcing for custom furniture brand Interior Define from about 80% in China to around 50% today. “We were reading the tea leaves and moved out of China and more into Vietnam and Cambodia,” she said.

Interior Define typically sells furniture on a made-to-order basis. But Mayer said the company plans to hold inventory of some of its best-selling sofas to get them shipped to the U.S. before more tariffs potentially impact imports on July 9. On the flip side, it’s stopped sourcing products that weren’t big sales drivers and pulled them off the homepage.

In terms of pricing, Mayer said Havenly also added an import fee to its products based on the cost at the time and where they came from. It averages around 6% per purchase, capped at around $200 per product. She said there are many parts of furniture, like buttons, springs and certain textiles, that are only found in China. “We’ll always have a little bit of Chinese exposure, just because so many of our components are from there,” she said.

Even companies that don’t have significant impacts from tariffs are bracing for changes in behavior. At Wayfair, inventory comes from more than 20,000 suppliers across 100 different countries. The supplier determines the wholesale price and then the company applies a take rate on top of that. As CEO NIraj Shah explained on the company’s latest earnings call, this setup provides some insulation against tariffs.

“Many of our largest suppliers have manufacturing capabilities spread across multiple countries and can pivot production lines as the cost equation shifts,” Shah said, according to an earnings call transcript. “Our scale gives us a durable competitive advantage here. We can drive healthy competition across our thousands of suppliers in a category that … has vast assortment and high substitutability.”

A Wayfair spokesperson said they haven’t seen price hikes flow through in a substantive way yet. “Raising prices makes suppliers less competitive, so (suppliers are) generally keen to keep pricing competitive,” the spokesperson said.

Wayfair’s suppliers may also lean into discounting to drive demand in the near-future, like promotions such as Way Day. The spring sales event was held in late April, compared to early May last year, and saw deals of up to 80% “They see the value of participating in promotions in environments like this,” the spokesperson said. 

Wayfair has 2.1 million active customers as of March 2025, a drop of 5.4% since last year. To gain market share, the company aims to lure in shoppers through its Wayfair Rewards program, as well promoting its new Wayfair Verified program that boosts select marketplace products that have gone through a five-step quality evaluation. A Wayfair spokesperson told Modern Retail the company is also planning physical retail expansion, with two Pergola stores planned to open this year and a second Wayfair store opening next year in Atlanta.

At Bassett Furniture, about 79% of production comes from the U.S., with five of its own factories here. But there’s still exposure for the remaining 21% that comes from China, CEO Robert Spilman said on an earnings call in late April. The company also predicts housing sales will remain slow, Spilman said.

“We’ll be looking at our mix and we’ll be looking at what the full effects of the tariffs are,” he said. “And we can certainly emphasize the domestic product more purposely and more prominently if we choose to do so.”

To conserve cash, the company is reducing marketing and advertising dollars, and leaning into direct mail. Bassett saw about 36% growth in e-commerce last quarter and sees more opportunities for traffic and online conversion. It’s also in the midst of a retail warehouse consolidation that has helped cost reductions, Spilman said.

“The environment out there is not getting simpler, it’s getting more complex, and we are going to deal with that and persevere through this,” he said. “And we like what we’ve done with our cost structure, and we feel our product line is strong, and we’re just going to focus on dealing with this new environment and heading into hopefully a successful market in April.”