2025 Vegas Market Recap

Our winter journey to Las Vegas is always fun; a time to kick off the new year, see friends and clients, watch NFL playoff games in the showrooms, and enjoy tasty food and (just a bit!) gambling on the Strip. Many attendees got to warm up and escape the bitter cold back on the East Coast.
This market presented a somewhat mixed bag of attitudes – many executives expressed “hope, if not optimism” now that we have made it to 2025, weathered the presidential election, and are witnessing a generally more confident business outlook. We heard several comments that “the 2nd half of this year will be great”. Attendance was solid and the halls were mostly full. Andmore has done a great job of placing like companies together, on the right floors – making this an easy market for retailers and interior designers to work.
(As an aside, many attendees arrived a day early to see the Eagles play at the Sphere – apparently a must-see performance!).
Key Topics of Discussion
Tariffs
President Trump was clear he would use tariffs throughout his presidency, and it appears February 1st is the key date to monitor – prior to his election he stated tariffs of 25% on Mexico and Canada and 10%+ on China. Is he posturing to negotiate better deals with these countries, or will they all go into effect as advertised?
Some owners say tariffs will be existential to their businesses. Others believe China can adjust their currency to accommodate any action, and there will be negligible impact. Others are taking solace that “we are all in this together” and things will work out – as they did in 2018-19’.
One nuance for the home furnishings industry is its positive correlation with housing activity (in turn correlated with interest rates) – we did hear concerns from several CEOs that tariffs will lead to inflation, which could put a hold on or even reverse the interest rate cuts that the Fed has been executing since September 2024. The hope is low interest rates and reasonable prices for eggs and other necessities to buoy home buyers’ borrowing for new homes and the consumer confidence to purchase furnishings. We will learn more soon.
Outlook for 2025
Most of our discussions with manufacturers were positive, and importers and retailers suggested there's been a slight improvement in consumer purchasing lately. The stock market has mostly signaled positives for the US (other than a tough day for tech earlier this week, driven by the DeepSeek news out of China). Most believe the US economy should accelerate later this year, and the back half of the year should be strong.
Technology & AI
Talk of AI and use of improved technology was everywhere. Lots of discussion about using AI for product development and data analysis. Did you see the Andmore bag storage use of decoded bag tags assigned to your image and cell number? Very cool. More and more companies are investing in these technological capabilities. The DeepSeek revelations this week are another reminder that these technologies are accelerating, and we all must learn to leverage new tools to keep up with the competition.
Winners & Losers
We continue to be impressed by the many companies doing well, despite continued volatility in our industry and elsewhere. One long time friend told us that CEOs now must prepare their businesses “to weather once-in-a-generation black swan events every 2 years, not 30”. Higher-end players are doing better than most thanks to strong demand from the interior designer trade. Indeed, many designer focused companies are enjoying real growth and profits.
BIFMA Conference in SoCal
As a bonus to our Vegas trip, we headed to Southern California to attend the annual BIFMA (office/contract industry) conference. It was well attended - and like the residential folks - most were hopeful and expecting strong sales in 2025 with return to work sentiment in the private sector and a renewed demand for government workers to come to the office. Tariffs were also a topic of conversation, particularly among the manufacturers producing in Mexico and Canada.
M&A
Following two down years for M&A globally, we're seeing green shoots in revived deal flow, quality of deal opportunities, and enthusiasm from both strategic and financial buyers. Strong companies see opportunities to gain market share, add new customers or product categories, or expand geographically.
The baby boomer generation is aging, and these owners want to sell their businesses. PE firms are overloaded with dry powder and need to invest. And many PE firms with holdings in the industry are ready to transact, following several years of a tough market. The banks are solid and becoming more agreeable to lend for acquisitions (and private credit funds remain aggressive and open for business). We believe this mix of attributes should lead to a solid recovery in 2025 and a return to dealmaking.
It is an exciting time to be in the industry and we see 2025 being a formative year across sectors for M&A and beyond.
Call us if we can be of assistance.
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