Migration

COVID-19 migration has been ‘good for the furniture industry’: CEO of Overstock



The furniture and home decor industry exploded in 2020 as people stuck at home beautified their spaces or moved entirely to new spaces. The continued strength of housing means that growth can continue, said the CEO of Overstock.com.

“First of all, we have a workforce trend with people moving to different parts of the country. It’s good for the furniture industry,” Jonathan Johnson told Yahoo Finance Live.

The COVID-19 pandemic has triggered a great American migration: more than 7 million households have moved to counties last year, according to a Wall Street Journal analysis of US Postal Service change of address data.

Another future engine of growth will be outside the home, according to Johnson. “People extend their living spaces from the four walls of their homes to the four corners of their property. We see a lot of patio furniture, outdoor recreation equipment,” he said.

Overstock’s sales nearly doubled in the first quarter, and although revenue of $ 660 million is still eclipsed by that of its biggest outright competitor, Wayfair, it is growing faster. (Wayfair’s first quarter revenue grew 49% to $ 3.5 billion).

“It’s not really a question of whether people will buy furniture and home furnishings. This is where,” said Johnson of Overstock. “It’s more and more online. Fifteen months ago, 23% of home furnishings were purchased online. Today, it’s over 35% or more.”

The rise in furniture purchases, however, is not limited to online retailers. A recent analysis by Placer.ai found that traffic at many home furnishing and decorating chains remained steady during the first few months of the year. Visits were particularly strong for At Home and Floor and Decor, with traffic up 36.5% and 32.1%, respectively, in the first four months of 2021, compared to the same period in 2019.

For Overstock, the renewed focus on its retail business follows a period of concern about blockchain investments under eccentric founder and former CEO Patrick Byrne, who sold all of his stock in 2019. The veteran of the l Johnson firm, which managed Overstock’s blockchain portfolio, Medici Ventures, transferred management of those assets to outside firm Pelion Venture Partners earlier this year.

“We think these companies are in better hands, and as they have financial exits or events, it will be great for Overstock and help our bottom line and bottom line,” Johnson said.

Among other changes, Johnson also hired new executives, including a CFO and a Marketing Director.

Investors have taken note, with the stock climbing nearly 500% since Johnson took over in September 2019.

Peter J. Keith, senior research analyst at Piper Sandler, was among those who were impressed, especially after a recent conference and presentation with the management of Overstock. “OSTK has made some basic changes to better position“ the new Overstock. ”These include: focus on furnishings, expansion of assortment, improved pricing, targeting efforts marketing to the primary customer (informed buyer), automated customer service, improved delivery accuracy.These changes are basic blocks and fights, we believe these simple tweaks can have a huge impact over a period of time. prolonged, “he wrote in a note.

Johnson told Yahoo Finance Live that these changes were measured and deliberate: “We focused on culture, and what that really means is execution. We told the market what we would do and we have been successful. “

Julie Hyman is the co-host of Yahoo Finance Live, weekdays 9 a.m. to 11 a.m. ET. Follow her on Twitter @juleshyman, and Lily his other stories.

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