Arhaus
“Arhaus executes well, has good taste and they are nailing today’s zeitgeist, but each of these is fleeting, particularly as the market evolves,” says Chris Ramey, Home Trust International.
Luxury Home Furnishings Retailer Arhaus Got a Cool Reception on Wall Street
On the surface, premium home furnishings retailer Arhaus had everything going for it as it made its debut on Wall Street early this month – strong profitable growth in the rapidly expanding furniture market. But investors weren’t necessarily buying it.

It originally aimed for a $2.38 billion valuation with shares priced between $14 and $17. But the share price was reduced to $13 the night before and then opened for trading at $12.50. On Friday, November 12, it closed at $11.41.

In what he described as a downbeat opening, Marketwatch editor Tomi Kilgore reported at that price, it would reach a valuation of only $1.75 billion.

On the plus side, Arhaus competes in the home furnishings market, which has been on a tear since the pandemic. Furniture and home furnishings retail sales were up 22% through June 2021 compared to same period 2019, according to the Census Advanced Monthly Retail Trade report.

Arhaus grew more than twice as fast, with sales rising 51% for the first six months in 2021 compared with pre-pandemic 2019, reaching $355.4 million from $235.9 million in 2019.

Even while many of its 75 stores, called showrooms, were closed for months on end, Arhaus also enjoyed growth in 2020 as year-end sales reached $507 million, up 3% from $495 million in 2019. Much of the credit goes to its vibrant e-commerce platform that advanced 64% year-over-year and represented 18% of total sales in 2020.

After 35 years of operating successfully in the highly-fragmented $340 billion U.S. home furnishings business, CEO John Reed believes Arhaus has mastered the formula to keep on growing.

“We’ve been able to grow across the country with our footprint of showrooms which are being revamped into a retail-theater experience. Every detail is carefully designed to inspire people to come in. We want them to say, ‘Wow, I want my home to feel like this,’” he says.
“Pamela Danziger has written a little gem of a book that is guaranteed to give any brand manager in the home furnishings space half a dozen insights, plus a treasure trove of useful ideas on an initial read-through,” says Russell Bienenstock, Furniture World Magazine.
Home for HENRYs: Meet the New Customers Home Decor Marketers Are Searching For
Finding new customers, that is what 57 percent of high-end and luxury home furnishings marketers report as their number one business challenge in a recent survey conducted by Unity Marketing. No other issue comes close.

Their search for new customers ends here: It’s the HENRYs — high-earners-not-rich-yet consumers — especially the young HENRYs, aged 24-44 years.

This book, Home for HENRYs: Meet the New Customers Home Décor Marketers Are Searching For, reveals where home marketers can find their best and brightest new customer prospects and how to connect with them: Young HENRYs – high-earners-not-rich-yet consumers.
“A modicum of success in the U.S. is the most common and ultimately the worst outcome. It drains financial resources and undermines hope for long term success and consumer desire. Your first foray mustn’t fail,” warns Chris Ramey, partner in American Marketing Group and founder of The Home Trust International.
5 Challenges Every Home Brand Must Overcome to Grow in the U.S. Market
Everyone has heard the adage, “The bigger the challenges, the greater the opportunity,” but often the reverse is true too: The bigger the opportunity, the greater the challenges. Both apply for home brands that aim to grow in the U.S. consumer market.“

Here are the five biggest challenges that every home furnishings brand faces entering or expanding in the U.S. market, whether selling through brick-and-mortar retail, B2C e-commerce or through the design trade.

Challenge #1: Sheer size and scope of the U.S. market

While most businesses are entranced by the growth opportunities in China – 1.4 billion people with GDP growth averaging ~9% per year since 1980 – the U.S. market is far larger in market size yet with only one-fourth the total number of consumers – 328 million people living in 138 million U.S. households. The U.S. economy leads the world, $21.4 trillion as compared with $14.3 trillion in China, according to The World Bank.

In reality, China may be the world’s biggest producer, but the U.S. is the biggest consumer market.

Further, the U.S. is where more of the world’s wealth resides. There are 20.6 million U.S. millionaires, more than the five next largest countries combined, including China’s 2.3 million millionaires.

As for the home furnishings market, Americans spent $380.7 billion in 2020 on goods for their home, including $238.8 billion on furniture and furnishings alone. Add to that the $90.4 billion spent on home services, and the total market opportunity in the U.S. is rapidly approaching a half-trillion dollars.
Unity Marketing | 717-336-1600 or pam@unitymarketingonline.com