Made.com Lowers Guidance for Second Time This Year as Big-Ticket Sales Stall

Home furnishings retailer Made.com on Tuesday (July 19) forecast a decline of 15% to 30% in gross sales this year, sending its stock price plummeting and signaling the era of big-ticket furniture purchases is over while a likely economic recession looms.

Made shares fell as much as 41%, putting them at their lowest level since the company launched its initial public offering last year, the report said. The company was one of the big winners during the height of the COVID-19 pandemic as people improved the homes while they couldn’t leave them.

These days, U.K. consumers are dealing with the highest inflation in four decades and the prices of necessities including food and fuel are at record-high levels, leaving less discretionary income for home improvements, according to the report.

Made said the trading of its stock is “volatile” and that market conditions will “undoubtedly” continue to be challenging. In May, the company put out a profit warning as CFO Adrian Evans left the company, following the departure of CEO Philippe Chainieux in February.

On Tuesday, Made said it’s exploring the best ways to improve its financial future, studying its balance sheet and reviewing costs, including operational structure and head count.

“The issues seen at Made are no different to the broader homewares and furniture category,” wrote Liberum analyst Wayne Brown in a note to clients.

Related: Luxury Home Slowdown Takes Toll on RH Furniture Sales

Last month, high-end furniture retailer RH cut its forecast for the second time in a month, blaming high mortgage rates and fewer luxury home sales. The U.S. economy is not heading in a good direction, and investors have taken notice, said CEO Gary Friedman.

The company has seen its sales for this year do poorly, likely to drop as much as 5%, according to the company. A few weeks ago the company said revenue for the fiscal year would be flat to up 2%.

PYMNTS wrote that the furniture business has been seeing challenges for some time now, with Ikea, the biggest player in the field, now looking to add a $3 billion store refresh program to help stay afloat. This will help the company turn its warehouse stores into fulfillment centers.