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US furniture retailers are seeing a slowdown in sales as Americans who are already struggling to afford homes in today’s market aren’t shelling out for a new dining table or couch.

Last week, high-end furniture retailer RH reported $800 million in revenue in the three months ended July 29 — a 19% drop from last year’s period, when revenues hit $992 million.

The company attributed the dip to the stalling housing market, where mortgage rates are sitting at the highest level since 2001, forcing many homeowners in major US cities to sell at a loss.

“We continue to expect the luxury housing market and broader economy to remain challenging throughout fiscal 2023 and into next year as mortgage rates continue to trend at 20-year highs,” the company said in its earnings report.

Williams-Sonoma, the San Francisco-based firm behind pricey interior stores Pottery Barn and West Elm, posted its second-quarter earnings late last month, which showed year-over-year decreases across the board.

Aside from net revenues falling 13% from last year, to $1.86 billion, Williams-Sonoma’s profits also fell to $757.56 million — down from $928.81 million in 2022 — while operating income, comparable brand revenue and merchandise inventories also decreased.

In addition, Williams-Sonoma reported a 20% revenue decline for West Elm, and a 10% dip in sales for Pottery Barn.

Virginia-based luxury furniture retailer Hooker Furnishings also reported losses for the quarter, when revenue slid to $97.8 million — down 36% from $152.91 million a year ago.

Net incomes at the manufacturer — which sells its home goods at Wayfair and Macy’s — also took a massive hit year over year, from $5.54 million to a dismal $785,000.

Hooker’s chief executive Jeremy Hoff also attributed the company’s losses to mortgage rates, which have “slowed down housing activity.”

“The continued rise in interest rates has suppressed customer — consumer confidence,” Hoff added during an earnings call with investors following the company’s earnings report.

Perhaps also because of sky-high benchmark 30-year home loans — which climbed to 7.23% from 7.09% last month, per mortgage buyer Freddie Mac — investors also appear insecure about the future of the furniture industry, as shares of RH fell nearly 18%, to $313.23, in the past five days — since the company reported its second-quarter earnings.

A year ago, the average 30-year home loan rate was 5.55%.

Hooker Furnishing’s share price, meanwhile, fell nearly 9%, to $19.16, while Williams-Sonoma’s stock slipped less than 1%, to $142.52, in the same five-day period

Representatives for RH, Williams-Sonoma and Hooker Furnishings did not immediately respond to The Post’s request for comment.

The shift in consumer spending on furniture makes sense, as home buyers face an ongoing affordability crisis and consumer spending is expected to shrink in early 2024 the first quarterly decline since the start of the pandemic, according to Bloomberg’s latest Markets Live Plussurvey.

More than half of 526 respondents, or 56%, believe that personal consumption in the US will turn negative in the new year, while another 21% said the reversal will happen even sooner, in the final quarter of 2023, Bloomberg found.

The outlet blamed the pessimism on high borrowing costs affecting household budgets and COVID-era savings drying out.

Thus, the “nepo baby” discussion has found its way from social media into the real estate market, where recent findings from the brokerage Redfin reveal that a significant portion of young homebuyers used family money to afford a down payment for a home. 

According to Redfins survey of more than 500 buyers under 30 years old, 38% had financial assistance from relatives for their down payment. 

The situation is significantly a result of the current crisis of housing unaffordability, especially as inflation keeps its grip tight on the American economy.

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Shabana Mahmood is the new hard woman of British politics – and potential successor to Starmer

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Shabana Mahmood is the new hard woman of British politics - and potential successor to Starmer

We’re told that Shabana Mahmood, the still new home secretary, is “a woman in a hurry”.

She’s been in the job for 73 days – and is now announcing “the most sweeping reforms to tackle illegal migration in modern times” – effectively since the Second World War.

Politics latest: Mahmood dismisses ‘tittle-tattle’ over leadership rumours

Her language is not just tough – it’s radical. Not what you’d have expected to hear from a Labour home secretary even just a few months ago.

“Illegal migration”, she believes, “is tearing our country apart. The crisis at our borders is out of control”.

Her team argues that those never-ending images of people crossing the Channel in small boats have led to a complete loss of faith in the government’s ability to take any action at all – let alone deliver on its promises.

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‘Illegal migration is creating division across our country’.

The political reality is that successive failures of Tory and Labour ministers have fuelled the inexorable rise of Reform.

But speaking to Sir Trevor Phillips on Sky News, Ms Mahmood firmly hit back at suggestions today’s announcements are pandering to a racist narrative from the far right.

“It’s not right-wing talking points or fake news or misinformation that is suggesting that we’ve got a problem,” she said.

“I know, because I have now seen this system inside out. It is a broken system. We have a genuine problem to fix. People are angry about something that is real.

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Trevor’s takeaway

“It is my job, therefore, to think of a proper solution to this very real problem, to do so in line with my values as a Labour politician, but also as a British citizen, and to have solutions that work so that I can unite a divided country.”

There are many striking elements to this.

While she’s not been in the job for all that long, her government has been in power for 16 months. Her own press release highlights that over the past full calendar year asylum claims here have gone up by 18% – compared with a drop of 13% elsewhere in the EU.

The UK, she argues, has become a “golden ticket” for asylum seekers due to “far more generous terms” than other countries in Europe.

While she politely insists that her predecessor’s policies – the one in one out deal with France, closer partnership with law enforcement across Europe – are beginning to take effect, the message is clear. No one in office before Shabana has had the stomach to grasp the nettle.

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Inside Europe’s people smuggling industry

The Home Office is determined to present their boss as the new hard woman of British politics.

In a bleak warning to those in her party who will be deeply uncomfortable with this unflinching approach, we’re told she believes this is “the last chance for decent, moderate politics”.

“If these moderate forces fail, something darker will follow…. if you don’t like this, you won’t like what follows me.”

That’s a clear reference to the anti-asylum policies of Reform and the Conservatives, who are pledging to leave the European Convention on Human Rights and deport all illegal arrivals.

Both parties have responded by effectively claiming they don’t trust Labour to deliver on this, given they believe the government has lost control of our borders and overseen a surge in asylum claims.

That much Ms Mahmood herself has already acknowledged.

It’s unusual to hear a Conservative shadow minister like Chris Philp responding to a government announcement by claiming they will support the “sensible steps” the Home Office is making.

Unsurprisingly, he went on to belittle her ideas as “very small steps” combined with “gimmicks” – but the main thrust of his critique was that Labour lacks the authority to push these kinds of measures through parliament, given the likely opposition from their own left wingers.

It’s a fair point – but the lack of fundamental disagreement highlights the threat these plans pose to her opponents.

If the government looks like it might actually succeed in bringing down the numbers – and of course that’s a colossal if – Ms Mahmood will effectively have outflanked and neutralised much of the threat from both the Tories and Reform.

That’s why she’s so keen to mention her Danish inspiration – a centre-left government which managed to see off the threat from right-wing parties through its tough approach to migration, without having to leave the ECHR.

Read more:
Mahmood threatens Trump-style visa ban on three countries

Migrants shopping for life jackets: Inside the route to the Channel
Here’s how the Danish migration model works

The Home Office is planning further announcements on new safe and legal routes.

But refugee charities have described the new measures as harsh, claiming they will scapegoat genuine refugees, fail to integrate them into society, and fail to function as a deterrent either.

There will surely be an almighty internal row among Labour MPs about the principle of ripping up the post-war settlement for refugees.

For a government floundering after the political chaos of the last few weeks and months, Ms Mahmood is a voice of certainty and confidence.

At a moment of such intense backroom debate over the party’s future direction, it’s hard to avoid seeing her performance this weekend as a starting pitch for the leadership.

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Labour MPs fear wipe out at next local election – as chancellor’s career is ‘toast’

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Labour MPs fear wipe out at next local election - as chancellor's career is 'toast'

Many Labour MPs have been left shellshocked after the chaotic political self-sabotage of the past week.

Bafflement, anger, disappointment, and sheer frustration are all on relatively open display at the circular firing squad which seems to have surrounded the prime minister.

The botched effort to flush out backroom plotters and force Wes Streeting to declare his loyalty ahead of the budget has instead led even previously loyal Starmerites to predict the PM could be forced out of office before the local elections in May.

“We have so many councillors coming up for election across the country,” one says, “and at the moment it looks like they’re going to be wiped out. That’s our base – we just can’t afford to lose them. I like Keir [Starmer] but there’s only a limited window left to turn things around. There’s a real question of urgency.”

Another criticised a “boys club” at No 10 who they claimed have “undermined” the prime minister and “forgotten they’re meant to be serving the British people.”

There’s clearly widespread muttering about what to do next – and even a degree of enviousness at the lack of a regicidal 1922 committee mechanism, as enjoyed by the Tories.

“Leadership speculation is destabilising,” one said. “But there’s really no obvious strategy. Andy Burnham isn’t even an MP. You’d need a stalking horse candidate and we don’t have one. There’s no 1922. It’s very messy.”

More on Labour

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Starmer’s faithfuls are ‘losing faith’

Others are gunning for the chancellor after months of careful pitch-rolling for manifesto-breaching tax rises in the budget were ripped up overnight.

“Her career is toast,” one told me. “Rachel has just lost all credibility. She screwed up on the manifesto. She screwed up on the last two fiscal events, costing the party huge amounts of support and leaving the economy stagnating.

“Having now walked everyone up the mountain of tax rises and made us vote to support them on the opposition day debate two days ago, she’s now worried her job is at risk and has bottled it.

“Talk to any major business or investor and they are holding off investing in the UK until it is clear what the UK’s tax policy is going to be, putting us in a situation where the chancellor is going to have to go through this all over again in six months – which just means no real economic growth for another six months.”

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Why is the economy flatlining?

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Starmer and Reeves ditch plans to raise income tax
Former chancellor Osborne is shock contender to head HSBC

After less than 18 months in office, the government is stuck in a political morass largely of its own making.

Treasury sources have belatedly argued that the chancellor’s pre-budget change of heart on income tax is down to better-than-expected economic forecasts from the Office for Budget Responsibility.

That should be a cause of celebration. The question is whether she and the PM are now too damaged to make that case to the country – and rescue their benighted prospects.

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Budget 2025: Starmer and Reeves ditch plans to raise income tax

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Budget 2025: Starmer and Reeves ditch plans to raise income tax

Sir Keir Starmer and Rachel Reeves have scrapped plans to break their manifesto pledge and raise income tax rates in a massive U-turn less than two weeks from the budget.

The decision, first reported in the Financial Times, comes after a bruising few days which has brought about a change of heart in Downing Street.

Read more: How No 10 plunged itself into crisis

I understand Downing Street has backed down amid fears about the backlash from disgruntled MPs and voters.

The Treasury and Number 10 declined to comment.

The decision is a massive about-turn. In a news conference last week, the chancellor appeared to pave the way for manifesto-breaking tax rises in the budget on 26 November.

She spoke of difficult choices and insisted she could neither increase borrowing nor cut spending in order to stabilise the economy, telling the public “everyone has to play their part”.

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‘Aren’t you making a mockery of voters?’

The decision to backtrack was communicated to the Office for Budget Responsibility on Wednesday in a submission of “major measures”, according to the Financial Times.

The chancellor will now have to fill an estimated £30bn black hole with a series of narrower tax-raising measures and is also expected to freeze income tax thresholds for another two years beyond 2028, which should raise about £8bn.

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Conservative leader Kemi Badenoch said: “Only the Conservatives have fought Labour off their tax-raising plans.

“But one retreat doesn’t fix a budget built on broken promises. Reeves must guarantee no new taxes on work, businesses, homes, or pensions – and she should go further by abolishing stamp duty.”

How did we get here?

For weeks, the government has been working up options to break the manifesto pledge not to raise income tax, national insurance or VAT on working people.

I was told only this week the option being worked up was to do a combination of tax rises and action on the two-child benefit cap in order for the prime minister to be able to argue that in breaking his manifesto pledges, he is trying his hardest to protect the poorest in society and those “working people” he has spoken of so endlessly.

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Ed Conway on the chancellor’s options

But days ago, officials and ministers were working on a proposal to lift the basic rate of income tax – perhaps by 2p – and then simultaneously cut national insurance contributions for those on the basic rate of income tax (those who earn up to £50,000 a year).

That way the chancellor can raise several billion in tax from those with the “broadest shoulders” – higher-rate taxpayers and pensioners or landlords, while also trying to protect “working people” earning salaries under £50,000 a year.

The chancellor was also going to take action on the two-child benefit cap in response to growing demand from the party to take action on child poverty. It is unclear whether those plans will now be shelved given the U-turn on income tax.

Read more: What taxes could go up now?

The change of plan comes after the prime minister found himself engulfed in a leadership crisis after his allies warned rivals that he would fight any attempted post-budget coup.

It triggered a briefing war between Wes Streeting and anonymous Starmer allies attacking the health secretary as the chief traitor.

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Wes Streeting: Faithful or traitor? Beth Rigby’s take

Read more: Is Starmer ‘in office but not in power’?

The prime minister has since apologised to Mr Streeting, who I am told does not want to press for sackings in No 10 in the wake of the briefings against him.

But the saga has further damaged Sir Keir and increased concerns among MPs about his suitability to lead Labour into the next general election.

Insiders clearly concluded that the ill mood in the party, coupled with the recent hits to the PM’s political capital, makes manifesto-breaking tax rises simply too risky right now.

But it also adds to a sense of chaos, given the chancellor publicly pitch-rolled tax rises in last week’s news conference.

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