It was the Year That Wasn’t. Expectations at the start of 2025 for better times as inflation eased, mortgage rates dropped and Americans felt better about the economy faded away as Trumpian Tariff Turmoil and continued stubbornness in the housing market contributed to a year that could best be described as “lost.”

Not that there weren’t winners out there in the world of home furnishings retailing. Indeed there were, largely falling under the “value” heading. On the other end of the spectrum, luxury held up better than the overall marketplace, though it was selective to be sure—platinum Amex cards did not treat all businesses the same. Hovering over everything was AI entering its practical phase for consumers, who were using it to not only shop but to actually make purchases.

The Winners
The three best retailers of 2025 were general merchandise merchants; they all sold furniture and home furnishings, but for two of them it was not their primary business. All three offered the “deals” consumers wanted but did so in different ways.

We’re going to rank Walmart as the top retailer of the year, not only because they did so many things right, but because previously they did so many things wrong. From their vastly improved in-store merchandising to much more aggressive e-commerce strategy to better treatment (and pay) of its workforce, Walmart has become the best-run retailing company in the country. So, the contrast was particularly striking this past year, and retiring CEO Doug McMillon gets our vote for Retail Executive of the Year. He led a remarkable transformation of a business.

Right behind Walmart was Costco, not just for its $1.50 hot dog special and $4,000 gold bars, but for everything in between. It treated both its customers and employees right and proved there was a lot more to its merchandising story than 55-gallon drums of mayonnaise. We haven’t seen the specific numbers, but we’d be willing to bet Costco sells a surprising amount of furniture.

Wrapping it up is the TJX Company, specifically its HomeGoods brand. No longer a junk store, it’s become the go-to place for so many home furnishings shoppers who miss Bed Bath & Beyond and don’t care much for either Macy’s or Target, though the brand’s lack of e-commerce is appalling and could come back to bite the company eventually. And don’t forget, sister brand Homesense has enormous upside potential and will eventually be as big as its older sibling, with a greater focus on furniture. Won’t that be something?

For home furnishings–specific retailers, we’re going to group together the companies that target the more upscale consumer, including Arhaus, Williams-Sonoma and, yes, RH. The latter is, of course, often the whipping boy for furniture retailing, but their efforts to keep pushing ahead with new stores, both domestically and in Europe, were impressive given the natural tendency to tread water when times are uncertain. Sonoma is the sleeper here: Their combination of furnishings and housewares is a great formula that allows them to weather downturns in a way others can’t.

We can’t pass judgment on some of the privately owned home furnishings stores like Crate & Barrel or NFM (formerly Nebraska Furniture Mart, and technically part of the public giant Berkshire Hathaway, but it’s nearly impossible to figure out how well they’re doing). Crate and NFM are terrific operations, and when the latter opens its latest giant store in Austin in 2027, it will probably be among the best home stores in the country.

The Losers
Loser is such a harsh word. We’re going to cut these companies some slack and say they’ve only lost during the past 12 months and they may indeed turn things around, returning to the land of the winners. But for the meantime ...

Not surprisingly, at the top of the list is Target, which only a few years ago would have led the players on the flip side of these rankings. Talk about a reversal of fortune. As Walmart is doing just about everything right, this retailer seems to be doing just about everything wrong. There was the botched CEO transition, poor supply chain logistics and dismal execution at the store level, to name just a few missteps. But the bones of the company are good, and with a new CEO for 2026, one has to hope the start of a turnaround is on the horizon.

Losing may be too strong a word for what’s going on at Bed Bath & Beyond these days, but the company is certainly a convoluted puzzle. It’s taken over what was Kirkland’s, assuming 300 or so stores when its impresario Marcus Lemonis had previously said that the last thing he wanted to do was own stores. It still owns the BuyBuy Baby brand and its original Overstock business, but here’s the thing: It continues to lose money, it continues to lose top-line revenues, and it continues to lose in the price of its publicly traded shares. Perhaps it’s not such a stretch after all to include them in this grouping.

We’re also going to include all the “what-ifs” here. That’s led by Kohl’s, which just can’t seem to get its act together, churning through multiple CEOs—and their subsequent strategies—over the past few years with little to show for it. Across the highway, we see JCPenney doing some good things, but neither one of them seems to be gaining market share. Just as Kohl’s couldn’t take advantage of Penney’s previous meltdown, JCP is no more fortunate in its gains when Kohl’s is reeling.

Then there are all the retailers that collapsed to varying degrees over the past 12 months or so. That’s The Container Store, Big Lots, Joann and perhaps one or two others I’ve simply forgotten about. Tough times require tough businesses, and most of these retailers, though they may still be around in one form or another, couldn’t figure out how to stay in the game. Retailing isn’t easy, sure, but when you’re selling home products, there’s a built-in demand that should be able to sustain viable companies.

____________

Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.