Shoppers leave Wayfair | CNN Business


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CNN Business

Wayfair lost more than a million customers in the last quarter as shoppers turned away from new furniture and home decor.

The e-commerce retailer said the number of active customers fell 22.6% in the quarter ended September 30 compared to the same time last year.

The company’s revenue also fell 9% in the quarter from a year ago. It lost $283 million.

Wayfair (W) stock rose 7% on Thursday as the results beat Wall Street’s fears. Still, the company’s stock has fallen nearly 80% this year.

“Wayfair’s business isn’t working and it’s losing much of its market share,” said Neil Saunders, an analyst at GlobalData Retail.

There has been a wider slowdown in the furniture and homewares sector following a boom in 2020 and 2021, when many customers unable to travel or go to the office spent money redecorating their homes.

Sustained inflation, which reached 8.2% in September, has also impacted lower and middle-income buyers, who have withdrawn their discretionary purchases to focus on paying for necessities such as groceries, gas and rent.

Wealthy customers have also shifted spending from furniture and other goods to travel and services. Mortgage rates have risen dramatically, reducing demand for new homes.

“We see shoppers becoming more aware of their spending habits as they look for great value and wait for offers,” Wayfair CEO Niraj Shah said during a conversation with analysts on Thursday.

Wayfair recently said it will cut nearly 900 jobs, or about 5% of its workforce, and halt an international expansion plan.

Other furniture stores have also been hit hard by the furniture slowdown, including RH (RH) and Williams-Sonoma (WSM), owner of West Elm and Pottery Barn.

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