Why home retailers are plagued with financial challenges

New Economic Realities // April 15, 2026 Why home retailers are plagued with financial challenges By Mitchell Parton Ivy Liu It’s been a tough time for retailers in the home furniture and decor categories over the last few years. U.

S home retailers have been facing a universal headwind: the sluggishness and inaccessibility of the housing market, which leads to many shoppers not spending on new furniture or decor, as previously reported by Modern Retail.

Home sales last year tied 2024 for having the worst performance in three decades, and the median home price has soared 30% over the last decade. Those that have survived have had to pivot their strategies to attract more renters.

The housing market, alongside the pressure of inflation, fluctuating tariff policies and other financial situations such as being crushed with hundreds of millions in debt, has resulted in bankruptcy, closures or acquisitions for many prominent home chains. Earlier this month, Bed Bath & Beyond Inc.

acquired The Container Store (as well as owned brands Elfa and Closet Works) for $150 million. This was after The Container Store entered bankruptcy protection in 2024, which it exited last year. Last year, At Home blamed the pandemic, supply chain disruptions, inflation and tariffs when it filed for bankruptcy in June, according to Retail Dive.

It exited Chapter 11 in October, eliminating almost all of its $2 billion in debt. In 2024, Conn’s HomePlus filed for Chapter 11 in 2024 with about $530 million in debt, citing its decision to acquire rival chain W. S. Badcock in 2024 as well as inflation and higher interest rates.

Later that year, Big Lots filed for bankruptcy and closed most of its 900 stores, selling 219 locations to discount store operator Variety Wholesalers, which quickly revived the remaining stores with a more apparel-focused strategy.

“The ones that have a lot of debt or are not the strongest players, they’ve really struggled in the market,” said Cristina Fernández, managing director and senior research analyst at Telsey Advisory Group, pointing to Container Store and At Home specifically. She named Williams Sonoma, Arhaus and RH as strong competitors in the space.

That’s in addition to lower-price options at Target, Amazon, HomeGoods and Walmart. “The consumer has found other places to shop.” Big Lots executives had also blamed inflation and high interest rates for causing customers to pull back on home and seasonal purchases, according to NPR, a sentiment that still rings throughout the industry today.

“[Housing] recovery, it’s not looking like it’s going to happen this year,” Fernández said “That makes the situation for [home furnishings] companies that are under stress harder. You really need sales to have better profitability. The macro is not helping, and this is a segment that’s very macro-driven for the most part.”

Up until the bankruptcy, The Container Store had been facing debt and diminished customer demand, leading it to seek a $40 million lifeline from Bed Bath & Beyond Inc. in 2024, which was then called Beyond Inc. and previously Overstock. com Inc.

The company had faced not only higher mortgage rates, higher costs of living and weaker home sales, but also increased competition from the likes of Amazon and Temu. It was also saddled with $264 million in debt.

“Maybe it happened later than the shareholders would have liked — this is post-bankruptcy, so these businesses look different — but a combination of a Bed Bath & Beyond and a Container Store is just trying to take two companies that on their own couldn’t operate independently with their capital structures and can as a combined company,” said Alpesh Amin, a senior managing director at Riveron.

He assists retail and consumer products companies in restructurings and turnarounds.

Bed Bath & Beyond has “a vision that they want to become a one-stop shop for all kinds of home products and services, and in order to build that out, they were acquiring a lot of businesses that are in distress,” said Neil Saunders, managing director and retail analyst at GlobalData Retail.

“The fact that they’re in distress or not doing as well is because the market is very, very challenging. We’re seeing people mop up some of those weaker retailers, presumably at a reasonably good price point, because they see a longer-term play, or longer-term potential.”

The home retailers able to weather the storm, Amin believes, are those like Williams Sonoma that are focused on multiple customer demographics through a portfolio of different brands with centralized operations.

Retailers also have to have good balance sheets and capital behind them — not taking out more debt than they can’t pay back — and have a strong management team, he added. Riveron worked with furniture brands Lane Furniture and Mitchell Gold +