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National Retailers Continue to Ride Home Boom

Despite the impact of supply chain disruptions, the home category has proved successful for many big-box retailers throughout the pandemic and that trend held steady during the second quarter.

Williams-Sonoma reported strong gains in both its Pottery Barn and West Elm brands. Pottery Barn drove an almost 30 percent comp gain in the second quarter, while Pottery Barn Kids and Teen drove comps at 18 percent, with strength across their proprietary GREENGUARD Gold certified furniture for children.

West Elm led the company’s brands with a 51 percent comp gain and triple-digit growth in their upholstery and outdoor furniture business. Outdoor drove sales for Pottery Barn, as well.

“We’ve expanded our year-round outdoor assortment and our new product collections and line extensions,” said Laura Alber, president and CEO, Williams-Sonoma. “New categories such as bath, kitchen, and West Elm Kids are also fueling incremental growth for the brand.”

Big Lots reported a 14 percent increase in soft home comps over 2019, but within that category, certain segments outperformed.

“While we saw softness in fashion bedding, all other categories met expectations,” said Bruce Thorn, president and CEO, Big Lots. “Bath rugs and towels, patio rugs and floor mats were particularly strong this quarter.”

Another top performer for Big Lots was its Broyhill furniture line, which saw a revenue increase of $77 million in the second quarter of 2021—accounting for a total of $194 million—over the same quarter last year, when the brand launched.

“We remained thrilled with Broyhill’s trajectory and continue to see strong growth ahead for the brand with over $400 million in yearly sales…and showing continued acceleration to becoming $1 billion brand,” Thorn said.

The company also has seen growth in its Real Living private brand, which offers furniture and home goods at a lower price point than the Broyhill line.

“We are also introducing new products to make sure we have a complete offer in the Real Living brand,” Thorn said. “Real Living has ramped up quickly, generating over $400 million in sales year-to-date, and we are confident that it, too, will become a $1 billion own brand for Big Lots.”

Seasonal goods, including patio and garden furnishings and accessories, proved the one negative for the brand’s home sales this quarter, comping down 15 percent compared to last year. Thorn said shipping delays and reduced inventory availability impacted the seasonal business.

TJX—parent company of TJ Maxx, Marshalls and HomeGoods—also felt the impact of shipping issues, particularly significant increases in freight. But the company still logged an increase in profit for its HomeGoods brand.

“We were also very pleased with HomeGoods’ profit dollars which were up 42 percent versus fiscal ’20,” said Scott Goldenberg, CFO, TJX Companies. “As a reminder, HomeGoods margin is disproportionately impacted by freight increases due to its product mix and further pressured by supply chain costs related to its new distribution center and wages.”

TJX also reported comparable gains in home goods for its TJ Maxx and Marshalls brands, despite temporary store closures in Canada, Europe and Australia.

Ross CEO Barbara Rentler shared on their second-quarter earnings call that the company’s home sales continue to outpace apparel, a trend that began last year. The stores, which source mostly through closeouts, have been able to maintain inventory despite pandemic-related shortages.

“What’s happening is that merchandise deliveries are sliding,” Rentler said. “So it could slide two weeks, 30 days. They are sliding, and so what the merchants are really doing is they are constantly flexing based on what they are seeing in the market, the availability, and they’re chasing into classifications that they need. So it’s a little bit of a moving target. But overall, there is plenty of supply.”

Rentler cautioned that situation could change as we move into the coming year, particularly for Chinese imports.

“I think the challenge as you go into Q1 is that Chinese New Year is a couple of weeks earlier,” she said. “So, those two things are going to slide, I think, a little bit in terms of deliveries and the kind of goods that have to get out of China in particular.”

Target reported slightly slower growth in home this quarter over the same time last year—dropping to a single-digit increase over last year’s 30 percent jump.

“Within home, we’ve seen moderating trends in categories like kitchen, storage, and decor as they comped over outsized growth last year,” said Christina Hennington, chief growth officer, Target.

Hennington said the company hopes new home lines from Jungalow designer Justina Blakeney and children’s book author Christian Robinson will help boost home sales going forward.

Home improvement retailer Lowe’s reported positive comps across several categories, including decor, which has become a larger part of the company’s business. This quarter’s gain comes on top of 20 percent growth in the category last year.

“The 17 percent growth we experienced in ticket over $500 was in large part driven by these categories, reflecting continued consumer confidence in investing in their homes,” said Marvin Ellison, CEO, Lowe’s. “This also reinforces the consumers’ confidence in Lowe’s as the right destination for their home decor needs.”

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