The home decor industry is getting a whole new look.
As sales at furniture and home furnishings stores outperform the broader retail industry, many of the category's legacy brands have struggled to keep pace. That's created an opportunity for Wayfair and At Home, two up-and-coming retailers that are going after a market they say has been underserved.
Amid a wave of holiday sales reports that mostly disappointed, both Wayfair and At Home were bright spots. At the ICR Conference in Orlando, Florida, Wayfair CEO Niraj Shah reiterated the company's strong results during the five-day stretch that ended Cyber Monday, adding his previous concerns about a softer consumer environment did not materially weigh on the online retailer's holiday sales.
Meanwhile, burgeoning retail chain At Home raised its forecast for fourth-quarter and full-year comparable sales, previewing what it expects will be its 12th straight quarter of same-store sales increases. That's as the retailer is adding more locations to its footprint, having more than doubled its store count over the past four years. Eventually, the chain predicts it can grow to 600 locations by taking over space formerly filled by the likes of Sports Authority and Kmart.
Though they're approaching the market in different ways — most notably, Wayfair operates only online, whereas At Home sells its merchandise only in stores — they're both grabbing share in a category that's both fragmented and behind on innovation.
"With the death of furniture in many of the department store retail environments, you really don't have a good high-middle-end of home decorating," Greg Portell, a partner in A.T. Kearney's consumer and retail products practice, told CNBC.