Home Goods M&A Update – June 2025

Home Goods M&A Backlog Continues to Build, Market Uncertainty Keeps Deal Volume and Consumer Spending at Bay

Home Goods merger and acquisition (M&A) activity has held steady year-over-year (YOY) despite business owners and consumers pausing growth initiatives and spending amid economic and geopolitical uncertainty. However, sector operators have continued to transact, seeing deal volume gains over the past four years. Demand for highly synergistic acquisitions has persisted while recently an influx of divestitures, distressed asset sales, and bankruptcies have further provided expansion opportunities for sector participants with solid balance sheets. A lack of affordability in the Housing market, elevated interest rates, and impacts of prolonged inflation have threatened sales volumes across the sector and contributed to the rise in divestitures, distressed asset sales, and bankruptcies. Purchases of high-frequency use items have provided levity to waning demand in the near-term, but Home Goods retailers have continued to wait for increased housing turnover to spark sales growth for big-ticket purchases.

The core Home Goods M&A market remains active mainly driven by the sale of attractive brands that continue to perform well and a large surge in tuck-in and add-on acquisitions by strategic buyers and portfolio companies of private equity firms.

Ken WasikHead of Consumer Investment Banking, Capstone Partners

Challenging Housing Market Continues to Pressure Home Goods Sector Participants

The Home Goods sector has continued to primarily see needs-based purchasing decisions following 2021, contributing to a tepid consumer demand environment. The resulting drop-off in sales has been most notable in high-ticket categories where many consumers purchased large necessities, such as a new mattress or furniture, during the 2020 to 2021 period when interest rates were low and pandemic-induced demand allowed the Housing market to flourish. Despite this, replacement cycles for high-frequency use items have started to materialize, with small appliances and electronics purchases buoying sales volumes in the short term. Notably, Capstone’s Household Appliances and Housewares & Specialties indices revenue trends have shown moderating YOY declines over the most recent and prior fiscal year earnings cycles while the Home Furnishings index has experienced worsening revenue declines. Consumers have demonstrated hesitancy when considering large purchases amid continued market and economic uncertainty, signaling pent-up demand. A rebound in consumer confidence will likely bring sidelined consumers back to the market and spur increased spending on large-ticket items in the Home Goods sector. This sentiment was expressed by La-Z-Boy (NYSE:LZB) CEO Melinda Whittington at an investors conference in March: “…The industry grows when people are moving. So, housing starts, housing turns are really what drive the industry overall. And between affordability of housing, interest rates, availability of housing, we know [these] are all pent-up [opportunities] for the long term. But for the last three years, they’ve been at some pretty historic lows. So, we’re very optimistic about what comes eventually.”¹

Consumers have been delaying homebuying and home sale decisions due to the higher-for-longer interest rate environment, hamstringing demand for new home furnishings, appliances, and household products. The median sales price of houses in the U.S. has increased 23.8% between Q4 2020 and Q4 2024 to $419,200, according to Federal Reserve Economic Data (FRED).² Moreover, mortgage rates have skyrocketed as the Federal Reserve began quantitative tightening to combat inflation following the global pandemic. The average 30-year fixed rate mortgage has increased 130.2% between Q4 2020 and Q4 2024 to 6.6%, according to FRED.³ This rate increase has kept consumers with more favorable financing terms from selling their properties, placing strain on the number of homes on the market. Meanwhile, new privately-owned housing starts have fallen 11.4% since Q4 2020, according to the U.S. Census Bureau.⁴ Coupled with a lack of existing homes on the market, those that can afford to purchase a home in the current environment have been challenged with a shortening supply of available properties. The Home Goods sector has kept a keen eye on any additional rate cuts and the consumer spending backdrop, as any improvements may spur a resurgence in demand from new homeowners. Moreover, rebounding consumer confidence will likely boost sales for discretionary-leaning home goods and drive sales of big-ticket purchases that have hit their replacement period but have been delayed due to market uncertainty.

Consumer Shift to Services and Volatile Geopolitical Landscape Stagnates Home Goods M&A

Home Goods M&A activity has held stable YOY with 52 transactions announced or completed in YTD 2025 compared to 51 in the prior year period. Stagnation in the Home Goods M&A market reflects a broader appetite for consumer services businesses over product companies in the private equity universe. Services spending growth has outpaced consumer expenditures on products, accounting for expansion in services M&A among strategics and the attractiveness of services businesses in the eyes of private equity fund managers. In April 2025, Lowe’s (NYSE:LOWE) announced its acquisition of Sterling Group-backed Artison Design Group, a home furnishings design, distribution, and installation services company ($1.3 billion, 0.7x EV/Revenue). This large-scale transaction underscores robust M&A appetite in the services side of the Consumer market – which is not captured in the Home Goods sector.

Despite this underlying focus shift to services, the Home Goods space has seen healthy levels of acquisition activity, posting M&A market expansion in 2021, 2022, 2023, and 2024. The evolving sector landscape in the aftermath of COVID-19 has continued to contribute to home goods deal flow as business owners reconfigure operations. Nine divestures, distressed asset sales, or bankruptcies have been announced or completed to date, comprising 17.3% of total deal volume. These transactions comprised 11% (19 deals) of sector M&A activity in full year 2024, including high profile Chapter 11 Bankruptcy filings from Tupperware Brands (OTCPK:TUPB.Q) and Big Lots (OTCPK:BIGG.Q). While deal volume has steadily grown in recent years due to the Home Goods market evolution post-pandemic, Capstone believes an M&A backlog has continued to grow as many quality assets wait for a more stable market to launch a sale process.

Acquisitions in the Furniture & Home Furnishings segment have increased from 28 in year to date (YTD) 2024 to 35 in YTD 2025. To date, transaction activity has been maintained by cash-rich buyers expanding operations to source growth while industry sales lag, strategics looking to shore up supply and remain competitive amid tariff threats to margins and input sourcing, as well as asset sales from companies struggling to stay afloat coming as the Housing market heads into its fourth year of weakness. Meanwhile, the Household Products segment has contributed 12 transactions to the sector total YTD, a 36.8% decline YOY. Privately-owned home goods operators have maintained a healthy appetite for acquisitions. As a result, private strategic deal volume has increased slightly, rising by a deal YOY to 31 transactions in YTD. In contrast, recent turmoil in the macroeconomic and geopolitical landscape has slowed public strategic acquisitions as management teams digest policy changes and realign priorities to account for a shifting tariff environment and impacts to consumer demand. This wait-and-adjust strategy has caused public strategic deals to fall 50% YOY to five transactions in YTD 2025. Despite headwinds, consolidation has remained a core component for many home goods operators’ playbooks. Robert DeMartini, CEO of sleep products brand Purple Innovation (Nasdaq:PRPL), highlighted this persistent industry consolidation during the company’s fiscal Q4 2024 earnings call: “During the year, we took actions to strengthen the durability of the business, so we can confidently navigate the ongoing uncertainty of the market, where we are seeing challenged consumer demand and increased industry consolidation.”⁵

Private equity investment in the sector has increased 45.5% YOY to 16 deals to date. Platform deals have increased from two transactions in YTD 2024 to 12 in YTD 2025 while add-ons have fallen from nine deals to four. Platform deal volume has been supported by a friendlier acquisition financing environment, particularly compared to early 2024 before the Federal Reserve began its quantitative easing cycle. Sponsors have heavily focused on the Furniture & Home Furnishings segment, accounting for 62.5% of private equity transactions to date. High-growth, lifestyle-driven home goods businesses with differentiated offerings and strong customer relationships have continued to attract private equity interest. Sector participants with diverse and resilient supply chains have also garnered robust acquisition interest. Capstone expects private equity activity in the Home Goods space to maintain its momentum through the remainder of 2025, particularly if tariff policies are solidified, the Housing market picks up, and consumer spending on products rebounds.

Home Goods M&A Activity Bifurcates, Buyers Target Highly Attractive Brands and Distressed Situations.

Acquirors in the Home Goods sector have pursued businesses with strong brands, long operating history, supply and customer diversification, and robust synergies. Moreover, buyers have targeted corporate divestments, distressed situations, and bankruptcy sales to bolster operations at a discount. Several notable Home Goods M&A transactions are highlighted below.

• S5 Equity Acquires Howard’s Appliances (April 2025, Undisclosed) – In April 2025, private equity firm S5 Equity acquired home goods retailer Howard’s Appliances for an undisclosed sum. Howard’s Appliances joins S5’s growing portfolio of operators in the Home Goods space, including two catalog retailers dealing in housewares, electronics, hardware, and other home goods, Heartland America (March 2025, undisclosed) and Hammacher Schlemmer & Company (September 2025, undisclosed). Howard’s Appliances provides appliances and mattresses via retail locations and showrooms. The firm serves direct-to-consumer (DTC) and business-to-business (B2B), with its customer base spanning homeowners, interior designers, and industry professionals. The 80-year-old brand aims to expand its product offerings and streamline operations under S5’s management.
• Forward Consumer Partners Acquires SerVaas Laboratories (March 2025, Undisclosed) – Consumer brand-focused investment firm, Forward Consumer Partners, acquired cleaning products brand Bar Keepers Friend’s (BKF) parent company SerVaas Laboratories (March 2025). Terms of the transaction were not disclosed. BKF provides premium, science-backed household and commercial cleaning solutions. BKF’s brand strength and longstanding history were cited as key considerations for the acquisition. “BKF is the archetypal Forward asset – a powerful brand that makes beloved products, with an enduring track record of success and significant untapped potential. It marks an idea opportunity to demonstrate our capabilities in categories beyond Food and Beverage,” noted Matt Leeds, Founder of Forward Consumer Partners, in a press release.⁶
• The RW Collective Acquires Bauhaus USA (March 2025, Undisclosed) – In March 2025, furniture importer The RW Collective acquired assets from Bauhaus Furniture Group, a U.S.-based upholstery manufacturer (undisclosed). The acquisition follows Bauhaus’s announcement that it was closing its doors in early March due to challenges integrating a new software system, uncertainty in the tariff landscape, and the continued softness in the Home Goods sector. The RW Collective pursued the transaction to strengthen its domestic production capabilities and support vertical integration ambitions. “This is an exciting milestone for The RW Collective. Bringing manufacturing back to the U.S. has been a long-term goal, and Bauhaus presented the perfect opportunity. Their skilled craftsmanship, quality production, and logistics expertise will have an immediate positive impact on our ability to serve customers, said Michael Carey, CEO of The RW Collective, in a press release.⁷
• Grove Collaborative Acquires Grab Green (February 2025, Undisclosed) – Grove Collaborative (NYSE:GROV) acquired eco-friendly cleaning products company Grab Green for an undisclosed sum in February 2025. Grove Collaborative operates as a plastic neutral retailer of consumer products. Grab Green’s laundry and specialty cleaning products, including dishwashing pods, detergents, and multipurpose cleaners, have been available on Grove Collaborative’s platform since 2019 and have seen strong sales and share growth over the period. Grove expects the acquisition to be margin accretive via increased owned-brand sales penetration.

“Grab Green has been a trailblazer in creating safe, sustainable, and effective cleaning products that align perfectly with Grove’s mission of reducing the environmental impact of everyday household essentials. This acquisition represents an exciting opportunity to scale our collective impact, bringing even more innovative and eco-friendly solutions to consumers while continuing to raise the bar for sustainability in our industry,” said Jeff Yurcisin, CEO of Grove Collaborative, in a press release.⁸

Interest rate movements coming from the Federal Reserve and consumer confidence will remain closely monitored by participants in the Home Goods market. Capstone expects consumer spending on products to return and the Housing market to rebound when interest rates come down and geopolitical uncertainty resolves and with it, bring elevated M&A pricing in the Home Goods sector. As a result, private business owners previously on the sidelines waiting out market turmoil should prepare to launch a sale process.

To discuss the market dynamics impacting Home Goods sector in 2025, provide an update on your business, or learn about Capstone’s wide range of advisory services and Home Goods M&A knowledge, please contact us.

Andrew Woolston, Associate, was the lead Market Intelligence contributor to this article.

Endnotes

1. La-Z-Boy, “46^th Annual Raymond James Institutional Investor Conference,” https://lazboy.gcs-web.com/events/event-details/46th-annual-raymond-james-institutional-investor-conference, accessed April 17, 2025.

2. FRED, “Median Sales Price of Houses Sold for the United States (MSPUS),” https://fred.stlouisfed.org/series/MSPUS, accessed April 17, 2025.

3. FRED, “30-Year Fixed Rate Mortgage Average in the United States (MORTGAGE30US),” https://fred.stlouisfed.org/series/MORTGAGE30US/#, accessed April 17, 2025.

4. S. Census Bureau, “Housing Units Started Historical Time Series,” https://www.census.gov/construction/nrc/data/series.html, accessed April 17, 2025.

5. Purple Innovation, “Purple Innovation Fourth Quarter 2024 Earnings Webcast,” https://events.q4inc.com/attendee/386833194, accessed April 17, 2025.

6. Reuters, “Bar Keepers Friend, a Popular Cleaning Brand, is Getting Sold to Forward Consumer Partners,” https://www.reuters.com/markets/deals/bar-keepers-friend-popular-cleaning-brand-is-getting-sold-forward-consumer-2025-03-18/, accessed April 17, 2025.

7. Furniture Today, “RW Collective Buys Bauhaus Before it Goes Under, Saving 75 Mississippi Jobs,” https://www.furnituretoday.com/financial/rw-collective-buys-bauhaus-before-it-goes-under-saving-75-mississippi-jobs/, accessed April 17, 2025.

8. Business Wire, “Grove Collaborative Announces Asset Purchase Agreement with Grab Green,” https://www.businesswire.com/news/home/20250210928462/en/Grove-Collaborative-Announces-Asset-Purchase-Agreement-with-Grab-Green, accessed April 17, 2025.