Wayfair closing 2 outlets, including 1 on Long Island, home goods retailer says
Furniture and home goods retailer Wayfair will close its year-old returns outlet in Deer Park, as well as a location in Kentucky, as the company works to cut costs amid declining sales.
The Boston-based retailer, which is primarily an e-commerce company, also announced Friday that it was exiting its business in Germany, effective immediately.
The store at Tanger Outlets Deer Park will close Wednesday, said Karoline Etter, spokeswoman for Wayfair Inc., which was founded in 2002.
Asked why the outlet is closing, Etter said, “We have made the decision to close the Deer Park store as we continue to refine our physical retail strategy to more holistically reflect the Wayfair brand in a brick-and-mortar setting.”
She declined to provide more details, including the number of people who work at the store.
The 46,000-square-foot Deer Park outlet opened in November 2023 in a space that Christmas Tree Shops had vacated about three months earlier.
Wayfair plans to close its returns outlet in Florence, Kentucky, around Dec. 31, which will result in about 218 employees being laid off, according to a Worker Adjustment and Retraining Notification, or WARN, that Wayfair filed in October with the Kentucky Career Center, a state labor agency. The Kentucky outlet opened in 2019.
Wayfair sells returned merchandise and other discounted items in good condition at its seven outlet stores in seven states, according to the company.
For furniture retailers, outlets are meant to help clear bulky inventory more than drive profits, said Jaime Katz, senior equity analyst at Morningstar Research Services LLC, a financial services firm in Chicago.
“I think it’s important to have the right size of outlet stores to be able to clear the amount of inventory that is getting returned rather than to use it as a sales channel to promote your brand,” she said.
Despite the closings, Wayfair still is investing in expanding its brick-and-mortar presence.
Of its seven returns outlets, one opened in Augusta, Georgia, on Thursday, and one opened in Naperville, Illinois, in October.
Wayfair opened its first large-format store, a two-story, 150,000-square-foot location in Wilmette, Illinois, in May.
The retailer also operates three AllModern and two Joss & Main furniture locations.
Early in the COVID-19 pandemic, which began in 2020, furniture sales boomed as quarantined consumers spent money upgrading their living spaces.
But later, Wayfair and other furniture retailers had sales declines as high mortgage interest rates dampened homes sales and reduced demand for new home furnishings. Furniture sales also fell because many consumers don't have a need yet to replace the furniture they bought just a few years ago, retail experts said.
In 2023, Wayfair had $5.7 billion in sales, a 2.6% decline from 2022, but it is still the second-largest furniture retailer in the United States, according to Home News Now, a trade publication based in High Point, North Carolina.
In the third quarter of 2024, Wayfair’s total net revenue fell by $60 million, or 2%, to $2.9 billion, and its U.S. net revenue fell by $60 million, or 2.3%, to $2.5 billion, compared with the same period a year earlier.
Wayfair is focusing on three initiatives — fostering customer loyalty, spurring repeat business and driving economic value — to improve its performance, the company has told analysts.
Part of the company’s cost-reduction efforts included an announcement in January 2024 that it was laying off about 1,650 employees, or approximately 13% of its global workforce.
Exiting the German market will affect approximately 730 employees, but about half are expected to relocate to other corporate offices, according to Wayfair’s filing with the U.S. Securities and Exchange Commission on Friday.
Wayfair has been in the German market for 15 years, but growth in the country lagged that of the United Kingdom, Wayfair CEO and co-founder Niraj Shah wrote in an email to employees Friday.
“To ensure we align our resources with initiatives that can deliver the greatest impact, we made the difficult but necessary decision to reallocate efforts to areas with strong long-term potential where our current efforts are showing great progress,” he wrote.
Furniture and home goods retailer Wayfair will close its year-old returns outlet in Deer Park, as well as a location in Kentucky, as the company works to cut costs amid declining sales.
The Boston-based retailer, which is primarily an e-commerce company, also announced Friday that it was exiting its business in Germany, effective immediately.
The store at Tanger Outlets Deer Park will close Wednesday, said Karoline Etter, spokeswoman for Wayfair Inc., which was founded in 2002.
Asked why the outlet is closing, Etter said, “We have made the decision to close the Deer Park store as we continue to refine our physical retail strategy to more holistically reflect the Wayfair brand in a brick-and-mortar setting.”
WHAT NEWSDAY FOUND
- Wayfair will close two returns outlets — one at Tanger Outlets Deer Park that will close Wednesday and one in Kentucky that will close around Dec. 31.
- The 46,000-square-foot Deer Park outlet opened in November 2023 in a space that was vacated by Christmas Tree Shops.
- Wayfair announced Friday that it was exiting its German business, which will affect approximately 730 employees, about half of whom are expected to relocate to other corporate offices.
She declined to provide more details, including the number of people who work at the store.
The 46,000-square-foot Deer Park outlet opened in November 2023 in a space that Christmas Tree Shops had vacated about three months earlier.
Wayfair plans to close its returns outlet in Florence, Kentucky, around Dec. 31, which will result in about 218 employees being laid off, according to a Worker Adjustment and Retraining Notification, or WARN, that Wayfair filed in October with the Kentucky Career Center, a state labor agency. The Kentucky outlet opened in 2019.
Wayfair sells returned merchandise and other discounted items in good condition at its seven outlet stores in seven states, according to the company.
For furniture retailers, outlets are meant to help clear bulky inventory more than drive profits, said Jaime Katz, senior equity analyst at Morningstar Research Services LLC, a financial services firm in Chicago.
“I think it’s important to have the right size of outlet stores to be able to clear the amount of inventory that is getting returned rather than to use it as a sales channel to promote your brand,” she said.
Despite the closings, Wayfair still is investing in expanding its brick-and-mortar presence.
Of its seven returns outlets, one opened in Augusta, Georgia, on Thursday, and one opened in Naperville, Illinois, in October.
Wayfair opened its first large-format store, a two-story, 150,000-square-foot location in Wilmette, Illinois, in May.
The retailer also operates three AllModern and two Joss & Main furniture locations.
Shifting focus
Early in the COVID-19 pandemic, which began in 2020, furniture sales boomed as quarantined consumers spent money upgrading their living spaces.
But later, Wayfair and other furniture retailers had sales declines as high mortgage interest rates dampened homes sales and reduced demand for new home furnishings. Furniture sales also fell because many consumers don't have a need yet to replace the furniture they bought just a few years ago, retail experts said.
In 2023, Wayfair had $5.7 billion in sales, a 2.6% decline from 2022, but it is still the second-largest furniture retailer in the United States, according to Home News Now, a trade publication based in High Point, North Carolina.
In the third quarter of 2024, Wayfair’s total net revenue fell by $60 million, or 2%, to $2.9 billion, and its U.S. net revenue fell by $60 million, or 2.3%, to $2.5 billion, compared with the same period a year earlier.
Wayfair is focusing on three initiatives — fostering customer loyalty, spurring repeat business and driving economic value — to improve its performance, the company has told analysts.
Part of the company’s cost-reduction efforts included an announcement in January 2024 that it was laying off about 1,650 employees, or approximately 13% of its global workforce.
Exiting the German market will affect approximately 730 employees, but about half are expected to relocate to other corporate offices, according to Wayfair’s filing with the U.S. Securities and Exchange Commission on Friday.
Wayfair has been in the German market for 15 years, but growth in the country lagged that of the United Kingdom, Wayfair CEO and co-founder Niraj Shah wrote in an email to employees Friday.
“To ensure we align our resources with initiatives that can deliver the greatest impact, we made the difficult but necessary decision to reallocate efforts to areas with strong long-term potential where our current efforts are showing great progress,” he wrote.
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