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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<div><ul><li>We spoke with CEO Iv Culp from Culp, Inc. (CULP) and Tiffany Hinkle, AVP IR with Haverty Furniture (HVT), two companies with excellent insight into the US home furnishings market.</li><li>The home furnishings sector is exhibiting cautious optimism after three to four years of defensive positioning.</li><li>Following pandemic-driven demand spikes and subsequent pull-forward effects, companies experienced an unusually severe downcycle requiring extensive cost restructuring.</li></ul></div>

We spoke with CEO Iv Culp from Culp, Inc. (CULP) and Tiffany Hinkle, AVP IR with Haverty Furniture (HVT), two companies with excellent insight into the US home furnishings market.The home furnishings sector is exhibiting cautious optimism after three to four years of defensive positioning.Following pandemic-driven demand spikes and subsequent pull-forward effects, companies experienced an unusually severe downcycle requiring extensive cost restructuring.

Beyond Tariffs - How Leading Furniture Companies Are Positioning for the Next Upcycle

<ul><li>Progress on at least some trade deals (Vietnam) was seen as a positive in a holiday-shortened week of trading.</li><li>The WTR Commercial/Contract Furniture Index gained 6.1%, the Residential Manufacturers &amp; Suppliers Index was up 2.1%, and the Home Goods Retailers Index gained 7.0% as the broader market indices were up 1.7% and the R2K was up 3.6%.</li><li>New home construction, on a per capita basis, in the US (and other anglophone countries) has effectively flatlined since the 1990s, leaving us with just as many dwelling units on a per capita basis as we had in the early 1990s, despite the fact that the total US population has increased by roughly 80 million (1).</li></ul>

Progress on at least some trade deals (Vietnam) was seen as a positive in a holiday-shortened week of trading.The WTR Commercial/Contract Furniture Index gained 6.1%, the Residential Manufacturers &amp; Suppliers Index was up 2.1%, and the Home Goods Retailers Index gained 7.0% as the broader market indices were up 1.7% and the R2K was up 3.6%.New home construction, on a per capita basis, in the US (and other anglophone countries) has effectively flatlined since the 1990s, leaving us with just as many dwelling units on a per capita basis as we had in the early 1990s, despite the fact that the total US population has increased by roughly 80 million (1).

Furniture/Furnishings Weekly - July 7, 2025

<ul><li>The US enters the war with Iran, bombing multiple nuclear sites, while trade policy uncertainty continues.</li><li>The WTR Commercial/Contract Furniture Index gained 0.2% and the Home Goods Retailers Index was up 2.8%, while the Residential Manufacturers &amp; Suppliers Index fell 2.0%.</li><li>The broader indices were also mixed, with the S&amp;P 500 and DJ 30 down 0.2%, while the R2K gained 0.1%.</li></ul>

The US enters the war with Iran, bombing multiple nuclear sites, while trade policy uncertainty continues.The WTR Commercial/Contract Furniture Index gained 0.2% and the Home Goods Retailers Index was up 2.8%, while the Residential Manufacturers &amp; Suppliers Index fell 2.0%.The broader indices were also mixed, with the S&amp;P 500 and DJ 30 down 0.2%, while the R2K gained 0.1%.

Furniture/Furnishings Weekly Housing Booms and Busts...

<ul><li>Middle East conflict and tariff policy uncertainty weigh down the market.</li><li>The WTR Commercial/Contract Furniture Index declined 3.6%, the Residential Manufacturers &amp; Suppliers Index fell 3.4%, and the Home Goods Retailers Index was down 1.7%, as the broader market indices declined 0.5% and the R2K fell 2.1%.</li><li>Innovation sprints and ‘crisis’ response drive return-to- office policies (1), at least for one hedge fund who is demanding that staff commit to five days a week at the office in order to address recent performance shortcomings, with management arguing that “experience has shown that a period of highly focused, in-person collaboration allows significant research progress to be made in a relatively short amount of time.”</li></ul>

Middle East conflict and tariff policy uncertainty weigh down the market.The WTR Commercial/Contract Furniture Index declined 3.6%, the Residential Manufacturers &amp; Suppliers Index fell 3.4%, and the Home Goods Retailers Index was down 1.7%, as the broader market indices declined 0.5% and the R2K fell 2.1%.Innovation sprints and ‘crisis’ response drive return-to- office policies (1), at least for one hedge fund who is demanding that staff commit to five days a week at the office in order to address recent performance shortcomings, with management arguing that “experience has shown that a period of highly focused, in-person collaboration allows significant research progress to be made in a relatively short amount of time.”

Furniture/Furnishings Weekly 'Crisis Mode' Return-To-Office

<ul><li>Risk on as markets anticipate progress on trade deals.</li><li>The WTR Commercial/Contract Furniture Index gained 1.8%, the Residential Manufacturers &amp; Suppliers Index was up 3.1%, and the Home Goods Retailers Index increased 2.5%, while the large- cap indices gained 1.1% and the R2K was up 3.0%.</li><li>GenAI discussions on quarterly earnings calls are taking off as the technology (and adoption rates) continues to advance at a rapid clip (1), at least for the S&amp;P 500 (Figure 1).</li></ul>

Risk on as markets anticipate progress on trade deals.The WTR Commercial/Contract Furniture Index gained 1.8%, the Residential Manufacturers &amp; Suppliers Index was up 3.1%, and the Home Goods Retailers Index increased 2.5%, while the large- cap indices gained 1.1% and the R2K was up 3.0%.GenAI discussions on quarterly earnings calls are taking off as the technology (and adoption rates) continues to advance at a rapid clip (1), at least for the S&amp;P 500 (Figure 1).

Furniture/Furnishings Weekly - GenAI Adoption Rates

United States

Bassett Furniture Industries, Incorporated manufactures and sells a full line of furniture for the home.  The Company offers bedroom and dining suites, occasional tables and entertainment units, upholstered sofas and love seats, recliners, and mattresses, among other products.  Bassett's products are sold through retailers, including Bassett Furniture Direct.

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Bassett Furniture Inds (BSET US)

Beyond Tariffs - How Leading Furniture Companies Are Positioning for the Next Upcycle

We spoke with CEO Iv Culp from Culp, Inc. (CULP) and Tiffany Hinkle, AVP IR with Haverty Furniture (HVT), two companies with excellent insight into...

Water Tower Research

Furniture/Furnishings Weekly - July 7, 2025

The WTR Commercial/Contract Furniture Index gained 6.1%, the Residential Manufacturers & Suppliers Index was up 2.1%, and the Home Goods Retailers...

Water Tower Research

Furniture/Furnishings Weekly Housing Booms and Busts...

The WTR Commercial/Contract Furniture Index gained 0.2% and the Home Goods Retailers Index was up 2.8%, while the Residential Manufacturers &...

Water Tower Research

Furniture/Furnishings Weekly 'Crisis Mode' Return-To-Office

The WTR Commercial/Contract Furniture Index declined 3.6%, the Residential Manufacturers & Suppliers Index fell 3.4%, and the Home Goods Retailers...

Water Tower Research

Furniture/Furnishings Weekly - GenAI Adoption Rates

The WTR Commercial/Contract Furniture Index gained 1.8%, the Residential Manufacturers & Suppliers Index was up 3.1%, and the Home Goods Retailers...

Water Tower Research

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