What: Department stores in the US are steadily reducing their furniture offerings, reallocating space to higher-margin categories and seasonal merchandise.

Why it is important: This shift reflects department stores’ need to maximize profitability and adapt to changing consumer preferences by prioritizing faster-turning, higher-margin categories.

US department stores are increasingly phasing out furniture as a core category, reallocating valuable floor space to more profitable and higher-turnover segments such as apparel, beauty, and seasonal merchandise. Once a staple of the department store model, furniture now accounts for a shrinking share of sales, with industry estimates suggesting it represents around 15% of Macy’s business and even less at Dillard’s. The logistical challenges, space requirements, and relatively slow sales velocity of furniture have made it less attractive compared to categories like mattresses, textiles, and housewares, which offer better margins and promotional opportunities. Retailers such as Macy’s and Nordstrom have experimented with larger home departments in flagship locations, but these efforts have often been scaled back in favor of flexible merchandising and shop-in-shop partnerships. As department stores continue to close underperforming locations and adapt to evolving consumer preferences, the future of furniture in this channel remains uncertain, with many retailers opting to focus on categories that drive traffic, profitability, and customer engagement.

IADS Notes: The gradual retreat of furniture from department store floors is emblematic of a broader strategic shift in the sector, as highlighted by WWD in March 2025, where Macy’s announced further store closures and a rethinking of its home strategy to prioritize higher-margin, faster-turning categories. This trend is echoed by Inside Retail (February 2025), which notes that American department stores are increasingly focusing on apparel, beauty, and select home goods, while bulky, low-traffic categories like furniture are losing prominence due to lower productivity and space constraints. The Retail Bulletin (April 2025) underscores that the shrinking footprint of furniture is part of a wider move toward more profitable and flexible assortments, with some retailers investing in experiential retail and core strengths to maintain relevance. Retail Dive (June 2025) and Forbes (July 2025) document the rise of shop-in-shop models and specialty brand partnerships, such as Macy’s collaborations with Toys R Us and potential home partners, as a way to maximize floor productivity and enhance customer experience. Finally, Retail TouchPoints (December 2024) highlights the increasing use of seasonal pop-ups and flexible merchandising, allowing department stores to adapt their large-format spaces to evolving consumer trends and drive traffic during key periods.

Why are US department stores still selling furniture on-site?