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Investing.com -- Furniture retailers, including RH and Williams-Sonoma are facing fresh uncertainty after President Trump announced an investigation into imported furniture that could result in new tariffs within 50 days.
Stifel analysts said in a note reacting to the news that the potential sector-specific tariff, disclosed Friday on Trump’s Truth Social account, represents a “negative” headline for Arhaus and RH, citing risks of supply chain disruption and higher inflation.
The firm noted that Arhaus last reported 64% of receipts outside the U.S., while RH sourced about 10% of its fiscal 2024 dollar volume abroad.
“The investigation could simply be posturing,” Stifel said, but added that boosting U.S. job growth would require long-term investment and could “further accelerate furniture inflation disproportionately impacting lower-end consumers.”
The firm said Arhaus’ higher U.S. exposure and balance sheet strength provided some assurance, while RH’s latest earnings update suggested “greater risk around supply chain disruption.”
Stifel added that the investigation period “has the potential to add volatility to the supply chain” and keep pressure on valuations until there is greater clarity.
Meanwhile, Jefferies analysts believe it remains unclear whether the proposed measure would be incremental to existing country- and input-based tariffs.
If so, they expect “end-consumer prices move higher,” some onshoring of production, and potential mergers or partnerships to accelerate U.S. sourcing.
Jefferies also highlighted risks for direct-to-consumer brands, which face pressure from higher costs and reduced funding, while noting that established players with stronger domestic sourcing, such as La-Z-Boy or Ethan Allen, may be better positioned.
Williams-Sonoma, which reports results on August 27, and RH, expected the following week, could face investor questions on tariff exposure.